Turkey

Expand Business in Turkey

Global Upside helps businesses expand into Turkey by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Turkish laws and regulations.

The hiring and incorporation processes in Turkey are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Turkey. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Ankara

Currency

Turkish Lira (₺)

Language

Turkish

Government

Presidential Republic

Country Overview

Turkey, located at the junction of southeastern Europe and western Asia, has a population of 80 million. The country is well-suited for foreign businesses with numerous measures having been introduced by the government to promote investment in Turkey.

Over the last two decades, there has been significant social and economic growth in Turkey. The country has also seen greater political stability, reducing the economic and social volatility that affected the country in the past.

  • Turkey has a free-market economy that is driven by its industry and increasing service sector.
  • Turkey’s major export sectors are the automotive industry, followed by chemical products and ready-made garments and apparel.
  • Turkey’s main imports are machinery, transport equipment, apparatus, appliances, manufactured goods, mineral fuels, lubricants, and related materials.

Options for setting up a legal entity in Turkey include:

Joint Stock Company (JSC)

A joint-stock company (JSC) has a minimum capital requirement of ₺50,000. The shares are divided amongst the stockholders. A JSC is a good option for large-scale foreign investors interested in incorporating in Turkey.

Limited Liability Company

To establish a limited liability company (LLC), there is a minimum capital requirement of ₺10,000 and a shareholder requirement of between 1 and 50 shareholders. This type of entity may be a good option for small and mid-sized businesses.

General Partnership / Commandite Company

A general partnership/commandite company is a type of entity in which partners/commanditers are registered and the liabilities shared are limited. There is no minimum capital required.

Limited Partnership/ Collective Company

A limited partnership/collective company is a type of establishment that has no minimum capital requirement. The capital contribution by the partners determines how the liabilities are shared. This type of entity can be associated with profit-oriented activities.

Cooperative Company

A cooperative company in a type of entity that permits individuals and organizations to form commercial enterprises. There is no constraint to the number of shareholders and no capital requirement.

Branch Office

A branch office is an establishment that remains under the parent company but operates as a dependent commercial enterprise. Different financial systems and banks work with branch offices.

It takes at least three weeks to incorporate a legal establishment in Turkey.

In Turkey, the employer must determine the specific type of employment contract the employee will be hired under. The types of employment contracts are:

  • Permanent or temporary
  • Definite or indefinite
  • Full-time or part-time
  • Option to work-upon-call
  • Probationary term
  • Team contract

With reference to Turkish employment law, the following information must be included on all employment contracts:

  • Employer and employee details
  • Work clauses
  • Duty hours
  • Salary and benefits details­

The Law on National Holidays and General Holidays establish six public holidays:

  • Jan. 1: New Year’s Day
  • April 23: National Sovereignty and Children’s Day
  • May 1: Labor Day
  • May 19: Commemoration of Ataturk, and Youth and Sports Day
  • Aug. 30: Victory Day
  • Oct. 28-29: Republic Day, 1½ days starting at 1 p.m. on Oct. 28

Additionally, two religious holidays must be observed:

  • Feast of Ramadan, 3½ days starting at 1 p.m. on the day before the holiday
  • Feast of Sacrifice, 4½ days starting at 1 p.m. on the day before the holiday

The actual dates of the religious holidays are determined by the Lunar Calendar and vary year to year.

Turkish employers must pay employee wages once a month. Employers must also provide the employee with a payslip that includes payment details.

Accounting standards in Turkey, known as the Turkish Financial Reporting Standards (TFRS), are in conformity with the International Financial Reporting Standards (IFRS).

Corporate Tax

The corporate tax rate in Turkey is 22%.

Value Added Tax (VAT)

VAT, in Turkey, is called ‘Katma Deger Vergisi’ (KDV), which is 18% and there are reduced rates of 8% on food items, and medical devices and a super-reduced rate of 1%.

The data protection act in Turkey is known as the Law of Protection of Personal Data No. 6698 (LPPD). It states that every individual has the right to request protection of their personal details and data.

Anti-Bribery & Anti-Corruption Law

There is no specific anti-bribery or anti-corruption law in Turkey. However, the Turkish Criminal Code (TCC) does provide legal guidelines for these issues. Other laws include the Law on the Ethics Board for Public Officials, the Civil Servants Ethical Principles and Application Procedures and Principles (also called the Ethics Regulation), and the Law on Combating Bribery and Corruption and Declaration of Property.

Article 252 of the TCC No. 5237 regulates the bribery of public officials.

Bribery of Public Officials

For Individuals:

  • Imprisonment for 4 to 12 years
  • Termination from employment

For Businesses:

  • Cancellation of license
  • Confiscation of bribed goods
  • Administrative penalties

Similar to the bribery of public officials, private individuals also face penalties for getting involved in bribery.

Bribery of Private Officials

Heavy administrative penalties for both individuals and legal enterprises.