Turkish Citizenship by Investment program, allows a foreign investor to provide employment in Turkey for 50 Turkish citizens. Which means that, applying for a Turkish passport by hiring 50 employees is possible.
In this article, we will cover all the details about employment in Turkey, with the below listed titles:
- Legal definition of employment in Turkey
- Minimum wage and cost of an employee
- How long does it take to acquire citizenship by providing employment in Turkey?
- Is it possible to take over a company that already has 50 employees?
Legal definition of employment in Turkey
Terms of employment, are governed by the Labor Law, Trade Union Law and Social Security and General Health Insurance Law.
According to related regulations, employee is “a real person who is working with a valid employment contract”. Hence, the relationship established between the employee and employer is employment.
That is to say, legal definition does not contain any limitations regarding the payment method. In fact it does not states if it is time-based salary or service-based fee. Which means that the only important point is having a valid employment contract.
However, there is also the minimum wage enforcement in Turkey. Which means that the definition of employment contains two main elements. First one is a valid employment contract. And the second one is having a salary not less than the minimum wage.
Minimum Wage and Cost of an Employee in Turkey
How much is the minimum wage for 2022?
Now we know that there is minimum wage enforcement in Turkey. Consequently, you cannot hire an employee for a salary less than minimum wage.
Government declares the minimum wage and it’s increase rate annually. For 2022, monthly legal minimum wage is net 4.253,40-Turkish Liras. Which means that it is legally not possible for an employee to work for a salary less than such amount.
To clarify, the gross minimum wage for 2022 is 5.004,00 Turkish Liras. We would like to underline that it is legally not possible for an employee to work for less than 4.253,40-TRY.
How much is the cost of an employee for 2022?
Gross minimum wage is not the cost of an employee to the employer. The amount an employer would have to pay in order to provide employment in Turkey is different. In fact, cost of hiring one employee is the wage cost. Wage cost, is basically the total amount of the
- gross minimum wage,
- Social Security Institution employer premium and
- unemployment premium.
Therefore, the wage cost of an employee for 2022 is 5.879,70-Turkish Liras. To clarify, this is the cost of an employee but not the monthly salary. Minimum monthly salary is net 4.253,40-Turkish Liras per month.
Notes to a Foreign Investor Who Wants to Provide Employment in Turkey
Aside from the minimum wage enforcement, an employer should also be careful about notifying the Social Security Institution on time. Because when you hire someone for your business, you need to notify the Social Security Institution within the legal period. However, please keep in mind that this notification period changes according to the field of business and social security type.
For more details about being a business owner in Turkey as a foreigner, you can just click here. Or you can simply watch our video about starting a business in Turkey.
How long does it take to acquire citizenship by providing employment in Turkey?
Another important point about providing employment option is the duration requirement. How long do you have to keep employing 50 people, before applying for Turkish citizenship?
We can separate the “duration requirement” into two parts. First part would be the period before applying for citizenship. Second part would be the duration after your citizenship acquisition.
1- Providing employment in Turkey before applying for citizenship:
During the evaluation process of citizenship application, continuity of Turkish citizens’ fulltime employment in the last six months is important. In other words, you must hire 50 employees at least 6 months before your application.
Moreover, the applicant in person has to be the employer for at least six months before the application date.
2- Providing employment in Turkey after getting the Turkish citizenship:
Currently, there is no law regulating that 50 employees must be maintained after the acquisition of Turkish Citizenship. Which means, there is no commitment on maintaining the mentioned number of the hired employees after getting citizenship. So technically, you are free to dismiss the employees after you become a fellow citizen. Nevertheless, it would be a risky move, since government can think of it as the misuse of rights. Furthermore, it might lead to the loss of citizenship or annulment.
In addition, there is the rumors of a new proposed law. Which will probably introduce a commitment obligation on keeping the mentioned number of citizens employed for a given period.
Can a foreign investor buy an existing company that already has 50 employees?
Foreign Direct Investment Law and related regulations in Turkey have the equal treatment principle. Which means that international investors have the same rights and obligations as local investors. Therefore, conditions for setting up business, asset/share transfer, merger and acquisition are same as those applied to local investors. Thus, international investors may establish as well as take over any form of company set out in the Turkish Commercial Code.
On the other hand, let’s not forget about the six months of employment requirement. Because according to the related directives, the applicant in person has to be the employer of those 50 Turkish Citizens for at least 6 months before applying for citizenship.
However, since the reduction of investment limits (19.09.2018), there are not many applications regarding the providing employment option. Therefore, even the officers at the application authority is yet not sure about the applicability of such condition. As far as we know, there was the requirement of being the employer for at least 6 months. Furthermore, this requirement is not yet annulled even after the reduction of investment limits. Nevertheless, with the proposed law it is expected to be annulled for the employer only.
In short, even if you buy an existing business/company with 50 employees there is a 6 months condition. You have to be the employer of those employees at least for 6 months before applying for Turkish citizenship.
Hiring 50 employees may sound too much. On the bright side, you are not obliged to hire 50 employees for one certain business. For example, you can hire 35 employees for restaurant, 10 employees for café and 5 employees for another business. It is acceptable, as long as the total number of the employees is at least 50.
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