10/10/2023

Is a company in Turkey obligatory when you have employees?

company turkey

In Turkey, it is generally not obligatory to establish a separate legal entity, such as a company, when you have employees. However, you must comply with Turkish labor and tax laws when hiring employees, whether you are a foreign company or an individual. Here’s what you need to know:

  1. Employment Contracts: You must have legally compliant employment contracts with your employees. These contracts outline the terms and conditions of employment, including salary, working hours, benefits, and other employment-related matters.
  2. Tax and Social Security: You are responsible for withholding and remitting income tax and social security contributions from your employees’ salaries to the relevant Turkish authorities. Employers also contribute to social security on behalf of their employees.
  3. Work Permits: If you are a foreign company employing foreign workers in Turkey, you may need to obtain work permits for your employees, depending on their nationality and the nature of their work.
  4. Local Compliance: Ensure compliance with Turkish labor laws and regulations, which can include minimum wage requirements, working hours, overtime pay, and workplace safety standards.
  5. Bank Account: It is advisable to have a local Turkish bank account to facilitate salary payments and compliance with financial regulations.
  6. Record Keeping: Maintain accurate records of employee information, contracts, payroll, and tax documentation in accordance with Turkish laws.

While you can employ individuals in Turkey without establishing a separate company, there may be advantages to setting up a subsidiary or branch office, such as greater control over your operations and the ability to establish a more significant presence in the Turkish market. Additionally, the choice between hiring employees directly or using an umbrella company or payroll service provider may depend on your specific business goals and needs.

It’s crucial to seek legal and tax advice to ensure full compliance with Turkish regulations when employing workers in Turkey, as labor laws and requirements can be complex and subject to change.

Keep in mind that for a workforce of up to 3/4 employees, outsourcing is the most suitable solution.

If you are interested, Azkan can customize a bundled package offer that includes both recruitment and PEO (Professional Employer Organization) services.

We hope this approach aligns well with your needs.

Azkan Group can support you in your Employer of Record (EOR) and payroll requests (also called Umbrella Company) in Turkey. We can manage your HR requests even if you don’t have a legal entity in Turkey.