Freelancers and expats working in Turkey often face the question: should I set up my own company or use an umbrella company? This comparison helps you decide which option fits your goals, budget, and lifestyle in 2025.
What are the best choices for Freelancers and Expats in Turkey ?
Setup Time and Complexity
- Umbrella Company: Immediate onboarding with no paperwork on your side. Typically, it takes 1–2 days to become fully employed by the umbrella firm.
- Own Company: Requires registration with the Trade Registry, tax office, and social security — often takes several weeks. Legal translation, notary fees, and Turkish address requirements apply.
Legal and Tax Compliance
- Umbrella Company: Takes full responsibility for income tax, VAT, and SGK contributions. Contractors receive payslips, tax statements, and SGK confirmation.
- Own Company: You or your accountant must manage all filings and payments. Non-compliance risks fines or license suspension.
Work Permits and Residency
- Umbrella Company: Can sponsor and manage the application for you, including residence permits for family members.
- Own Company: You must prove economic activity and employment justification to obtain a work permit. This can be time-consuming and is subject to strict approval criteria.
Cost
- Umbrella Company: Charges a fee, often a percentage of your gross income (5–10%). Includes tax filings, HR, and legal support.
- Own Company: Incur setup fees (approx. €1,000–€2,000), monthly accounting costs (€100–€300), and tax liabilities. Also requires capital deposit and annual audit fees.
Flexibility and Control
- Umbrella Company: Less administrative control but more convenience. Ideal for short-term contracts or project-based work.
- Own Company: Full control over business operations, invoicing, and client engagement. Suitable for scaling or offering broader services.
Banking and Invoicing
- Umbrella Company: You receive monthly salary payments and don’t need a business bank account.
- Own Company: You need a Turkish business bank account, which requires documentation and in-person verification.
Liability and Risk
- Umbrella Company: The legal and financial risk lies with the umbrella provider.
- Own Company: You assume full responsibility for legal compliance, audits, and tax reporting.
In 2025, umbrella companies remain the ideal solution for those seeking simplicity, compliance, and quick market entry in Turkey. However, if you’re planning to build a brand, scale operations, or stay long-term, forming your own company might be worth the effort. Carefully evaluate your budget, legal risk tolerance, and business goals before choosing the right path.
By understanding the pros and cons of both models, freelancers in Turkey and expats can make informed decisions that align with their professional aspirations and lifestyle in Turkey.