international employment law firm alliance L&E Global

Starting a business in Türkiye

1. Introduction

Founded in 2000, Moroğlu Arseven is an independent, full-service law firm with broadly demonstrated expertise and experience in all aspects of business law. Moroğlu Arseven provides specialized support and representation to employers of all sizes, ranging from small local businesses through to major Fortune 500 companies. The employment law practice extends to many industries, including sectors where employee and labour issues are particularly sensitive, or subject to extra regulatory protections.

Turkish employment law has a very wide framework. Below you will find a brief overview of the Turkish legal framework, which will allow organizations to evaluate the implications and requirements of conducting business in Turkey.

2. Labour and Employment Law Requirements

a) Employer Policy Requirements

As mentioned above, Turkish Employment Law legislation has a very wide framework, and consists of a specific hierarchy among its resources. Social and economic rights related to working life and labour law are primarily regulated by the Constitution of the Turkish Republic (the “Constitution”); which is then followed by laws and regulations. Employer policies and workplace practices come after the laws and regulations within this hierarchy.

1. Main Sources of Employment Law

1.1 The Constitution of the Turkish Republic

Laws and regulations cannot contradict the Constitution and all employers must abide the rules set forth within the Constitution. Provisions of the Constitution, which regulates employment relationships are as follows:

  • Article 18 – Prohibition of forced labour,
  • Article 48 – Freedom of work and contract,
  • Article 49 – Right and duty to work,
  • Article 50 – Working conditions and right to rest and leisure,
  • Article 51 – Right to organize unions,
  • Article 53 – Rights of collective labour agreement and collective agreement,
  • Article 54 – Right to strike, and lockout,
  • Article 55 – Provision of fair wage.

Moreover, the rules of the Constitution concerning Employment Law do not only consist of social and economic rights. Provisions regarding individual rights and freedoms (such as principle of equality, personal immunity, prohibition of drudgery, protection of private life, freedom of communication, freedom of thought and opinion) also have an effect on employment relationships.

1.2 The Laws and Regulations

Following the Constitution within the hierarchy, the rules regarding employment relationships are mainly regulated under the Employment Law numbered 4857 (“Employment Law”) and Turkish Code of Obligations numbered 6098 (“Turkish Code of Obligations”).

Apart from these, other employment relationships are also regulated by other laws such as Trade Unions and Collective Labour Agreements Act numbered 6356, Occupational Health and Safety Law Act numbered 6331, and the Labour Courts Law Act numbered 7036. Practical measures for implementation are possessed through regulations, legislations, notices, and Presidential Decrees.

2. Private Sources of Employment Law

Employment agreements, internal regulations and policies, and workplace practices are among private sources of employment law.

2.1) Internal Regulations and Policies of the Company

Internal regulations are issued solely by the employer, without consulting or negotiating with the employee. Therefore, for internal regulations to be valid, the employee must clearly be informed about these rules while the agreement is being drafted, as well as accepting and approving them. Additionally, internal regulations cannot be immoral, or be against good faith or aggravate the position and/or obligations of the employee. Similarly, such internal regulations and policies cannot contradict the Constitution, as well as laws and regulations.

2.2) Workplace Practices

Certain repeated actions by employers may constitute a workplace practice. To give an example, if the employer provides travel expenses or bonuses or other additional social benefits, even though they are not specified in the employment agreement or internal regulations, these actions will constitute a workplace practice. However, the employer should provide such benefits to all employees or a part of them, for an action to become a workplace practice. If these benefits are provided to a certain employee, then it cannot be regarded as a workplace practice and the employer would not be obliged to provide these to other employees.

2.3) Instructions of the Employer

Provided that they are not against the employment law or the employment agreement, the employer has the right to give instructions in order to carry out the work and to regulate employees’ behaviours. In parallel, the employee is under the obligation to comply with valid instructions of the employer.

In summary, the Constitution, Presidential Decrees, laws and regulations, judicial opinions, international agreements, employment agreements, internal regulations, and workplace practices are among the sources of employment law. Parties of an employment relationship must comply with the rules and procedures set forth within the resources.

b) Employee Training Requirements

Employers are required to keep their employees safe from occupational diseases and injuries. In this regard, employers must take all precautions to provide safety for their employees, which includes providing trainings to their employees. Furthermore, employees may also be asked to participate in vocational trainings with regards to their fields.

1. Occupational Health and Safety Law Act No 6331 and the Occupational Health and Safety Services Regulation

Occupational health and safety obligations of employers are regulated under Occupational Health and Safety Law Act No 6331 (“OHSL”), and the Occupational Health and Safety Services Regulation, and include rules with regards to following matters:

  • Managing occupational hazards,
  • Informing and training employees about occupational health and safety risks peculiar to their workplace,
  • Providing employees with necessary tools and equipment,
  • Adopting health and safety measures to address changing workplace conditions,
  • Monitoring employee compliance with implemented occupational health and safety measures,
  • Ensuring that a worker’s health and ability to understand safety procedures are suited to assigned tasks,
  • Employing an on-site doctor and occupational safety specialist (will also be applicable to businesses with fewer than 50 employees as of 31 December 2023).

Additional measures may be required under the OSHL depending on workplace hazard classification. The OHSL requires occupational health and safety services to be provided by qualified individuals.

In order not to face the administrative, legal, and penal responsibilities described below, the rules set out in OHSL and the Occupational Health and Safety Services Regulation must be followed. OHSL imposes responsibilities on employers, employees, unions and the state in order to ensure occupational health and safety at workplaces, to comply with and supervise these rules.

In case of breach of obligations, it is possible to face substantial administrative fines.  Administrative fines vary according to the nature of the violation and the hazard class of the workplace. Additionally, if the violation continues, these administrative fines continue to be applied every month. Administrative fines applied as of 2023 are as follows:

  • Not taking precautions regarding occupational health and safety, not organizing, not providing the necessary tools and equipment, not providing health and safety measures to changing conditions and not employing employees to improve the current situation: Between TRY 15.529 – 46.587
  • Not assigning an occupational safety specialist: Between TRY 38.876 – 116.628
  • Not assigning a workplace doctor: Between TRY 38.876 – 116.628

2. Vocational Training

The employer may request the employee to attend vocational trainings in accordance with his/her education and general experience. It can also be stipulated by the employment agreement that this is accepted by the employee in advance. Furthermore, employers and employees may also agree on the terms of vocational trainings and its costs.

c) Employment Agreements

1. Minimum Requirements

Principally, in accordance with Article 8 of the Employment Law, there is no special requirement for an employment agreement unless otherwise specified. The employee and the employer may agree upon terms and conditions of the work either verbally or in written form.

On the other hand, if the duration of the employment agreement has been determined as one year or longer, the contract will then have to be in written form. Additionally, Article 11 of the Employment Law states that all “definite term employment agreements” must be in written form, regardless of their duration.

Furthermore, the Law on Compulsory Use of Turkish, states that all employment agreements must be made in Turkish language if they are executed by and between Turkish citizens and companies incorporated under Turkish law. Therefore, written employment agreements should be drafted either solely in Turkish or as dual column. For dual column agreements, the Turkish version must prevail in case of any inconsistencies with translated versions.

In addition to the above, as per Article 5 of the Employment Law, employers are obligated to treat their employees equally, regardless of the agreement type or the duration of employment agreements. However, an employer may treat employees differently if there is a valid reason, such as seniority, qualification or the nature of the job. If the employer violates this obligation and treats employees unequally without a valid reason, employees may terminate their employment agreements and claim compensation.

2. Fixed-term / Indefinite Term Employment Agreements

Indefinite-term employment agreement can be regarded as the most commonly used, while the fixed-term employment agreement as an exception, since the former provides better protection for employees.

Fixed-term agreement is an agreement between an employee and an employer, where parties mutually agree upon a certain expiration time. To enter into a fixed-term employment agreement, the practical conditions of the work must be suitable as per Article 11 of the Employment Law and the agreement must be in written form. Otherwise, the agreement will be considered as an indefinite-term employment agreement, even if parties decide upon a certain period of time. To specify, fixed-term employment agreements can be executed (i) if the work subject to the agreement has a definite term (ii) if the work requires the completion of a definite task (such as a project) or (iii) if the work is in connection with the emergence of a cause.

Furthermore, fixed-term employment agreements cannot be renewed without a valid reason. If parties renew it without objective reasons justifying the renewal; the agreement will be deemed as an indefinite-term employment agreement from the very beginning.

3. Part-Time / Full-Time Agreements

It is possible for the parties to enter into an employment agreement for part-time jobs. Article 13 of the Employment Law states that if the employee’s weekly working hours are significantly lower than the exemplary full-time employee, the employment agreement will be regarded as a part-time employment agreement. It has been determined within Article 6 of the Working Hours By-Law that working up to 2/3 of an exemplary full-time job will be deemed as part-time. In other words, employment relationships with weekly working hours up to 30 hours per week shall be considered as part-time.

4. Trial Period

Parties of an employment agreement may agree upon a trial period in order to evaluate each other. The employer may want to inspect the employee’s manner of work, while the employee may want to evaluate the workplace and conditions. A great majority of employment agreements in Turkey include such provisions even though it is not mandatory.

Concerning individual employment agreements, trial periods cannot be longer than 2 months as per Article 15 of the Employment Law. In case parties decide upon a longer trial period, such provision shall be deemed partially invalid, and the period will be executed as 2 months for individual employment agreements. However, for collective employment agreements, this period can be extended up to 4 months.

Within such trial period, parties may terminate the employment agreement without any severance or notice. However, employers will still be obliged to pay employees’ wages for the days they worked and overtimes, if any.

5. Notice Period

In accordance with Article 17 of the Employment Law, both the employer and the employee can terminate the employment agreement, which has been signed for indefinite period through a notice. The terminating party must comply with the termination procedure explained in Article 17 of the Employment Law.

Firstly, the terminating party must send the termination notice to the other party. The notice must be definite and clear. In addition, conditional notice of termination is deemed as invalid by the Supreme Court.

While terminating the employment agreement by notice, the employer and the employee should comply with the statutory termination periods which have been stated in Article 17 of the Employment Law. The statutory notice periods are as follows:

  • With regard to an employee whose employment period is less than 6 months – 2 weeks
  • With regard to an employee whose employment period is between 6 months and 1,5 years – 4 weeks
  • With regard to an employee whose employment period is between 1,5 and 3 years – 6 weeks
  • With regard to an employee whose employment period is more than 3 years – 8 weeks.

These periods might be decided longer in individual employment agreements or collective labour agreements.

The process of the termination notice period starts from the moment that the declaration of will regarding the termination reaches the other party. The employment period starts from the first day of the work and ends when the declaration of will regarding the termination reaches the other party.

3. Corporate Law Requirements

A) Compliance for Incorporation Compliance

1. Determination of the corporate structure:

The corporate structures available in Turkey are anonim şirket, limited şirket, collective companies, partnerships limited by shares and cooperative associations. The company structures most preferred by the foreign investors in Turkey may be examined under two types: Limited Şirket (“LS”) and Anonim Şirket (“AS”) which in fact both are companies with limited liability, where the liability of the shareholders is limited to their contributions in share capital.

In addition, the shareholding structure (sole shareholder/multiple shareholders) and the composition of the board of directors (“BoD”) (the number of BoD members) should be decided upon by the incorporating shareholder/s.

2. Incorporation procedures:

For the incorporation of a company in Turkey (“NewCo”), the following main steps shall be followed:

  1. the certification of Articles of Incorporation (the “AoA”), of New Company (“NewCo”)
  2. opening a bank account for the NewCo;
  3. registration of the AoA with the relevant Commercial Registry Office and announcement with the Commercial Registry Gazette,
  4. completing the tax registration procedures for the NewCo.

The estimated time for the completion of registration of the NewCo is normally up to two weeks upon receipt of all duly and completely prepared incorporation documents, including the time that may be needed for document translations and final documentation preparations.

In accordance with Article 339/2 of the Turkish Commercial Code, the AoA of the NewCo shall contain and define the following:

  1. NewCo’s commercial title and registered address
  2. The NewCo’s field of activity
  3. The number shares and their nominal value, their payment method and conditions
  4. Privileges and transfer restrictions regarding shares
  5. Rights and in-kind assets registered as capital other than cash; their values; the amount of shares to be subscribed in return for such capital, the price of such capital, the cost of the assets and rights purchased by the incorporating shareholders on behalf of the NewCo for the incorporation of the company, and the amount of the fee, allowance or awards that shall be given to those whose services were provided in the incorporation of the company.
  6. Benefits to be provided to the shareholders, members of the BoD and other persons from the profits of the NewCo
  7. Number of board members and authorized signatories
  8. The method of convening shareholders’ meetings and voting rights
  9. The time limit of the NewCo if any
  10. The form of the announcements to be made by the NewCo
  11. Types and amount of share capital committed by shareholders
  12. NewCo’s accounting period

Incorporation transactions are initiated through online system of Ministry of Commerce namely “MERSİS” and the registration of each company is performed before the relevant commercial registry where the NewCo will be located.

A potential tax number is automatically generated for NewCo by the system and the tax office to which NewCo will be affiliated is also determined depending on address of headquarters of NewCo. The potential tax number obtained during incorporation process turns automatically into the tax identification number following the completion of the registration of incorporation.


1. Tax Office Inspection

After incorporation of the company, notification of the start of work is automatically made by the relevant commercial registry to the tax office to which the NewCo’s headquarters is affiliated. Subsequently, an official from the relevant tax office visits headquarters of the NewCo to inspect as to whether the company is actually exists. During this inspection, an authorized signatory of NewCo or another authorized person having required authorities through power of attorney must be present.

2. Beneficiary owner declaration

Corporate taxpayers must declare beneficiary owner information to the tax office to which they are affiliated within a month as of registration of their incorporation. This declaration must be electronically submitted by filling out the “declaration form regarding beneficiary owner” via internet tax office.

3. Foreign Capital Notifications

The foreign investors within the scope of the Foreign Direct Investment Law (“FDIL”), are required to apply to the General Directorate of Incentive Practices and Foreign Capital, (“Directive”), to appoint their authorized users (“Representative”) who will use the Electronic Incentive Application and Foreign Capital Information System (E-TUYS) on behalf of the Company.

Pursuant to Article 5 of the Regulation on Implementation of FDIL, entities with foreign capital and their branches shall submit the following information to the Directorate through E-TUYS:

  • Information on the (i) “foreign investor”, (ii) “list of shareholders” and (iii) “subsidiaries” (if applicable) shall be submitted within one month as of registration of the Representative to the Directorate.
  • Information on activities of the NewCo shall be submitted on annual basis until the end of May at the latest.
  • Information on the share capital increase or decrease processes shall be submitted within one month as of the realization of the share capital increase/decrease.
  • Information on payments made due to share capital increase or share transfer transactions (if any) shall be submitted within one month as of realization of the share capital increase or share transfer.
  • Information on the share transfer transactions shall be submitted within 1 one month from the realization of the share transfer.

4. Application to the E-Notice System

Corporate entities must use e-notice system. In this context, signatory authority or authorized person having required authorities through a power of attorney must apply to the tax office to which company’s headquarters is affiliated within 15 days from incorporation of the company.

5. Social Security Institution Registration

NewCo should make a registration as an employer when employing a worker for the first time, before the worker’s employment starts. Registration as an employer must generally be done online via the Online Data Submission System (RED) or the social security online portal (SEDESS).

4. Payroll and Benefits Providers

Principally, employees must be registered under the payroll of the employer which they are providing their services, with the exception of employees of sub-contractors. As per Article 3/a of the Sub-Contracting Regulation, auxiliary tasks which are not included in the main activity of the employer, such as cleaning, security, catering; and a certain section of the employer’s main activity which requires technological expertise can be appointed to sub-contractors.

The main employer will be jointly and severally liable, together with the sub-contractor, for the sub-contractor’s employees regarding the obligations arising from the employment agreements (or the collective employment agreements) to which the sub-contractor is a party. To give an example, sub-contractor’s employees can request their unpaid salaries from the main employer, as well as the sub-contractor. However, the main employer will be jointly and severally liable for only for the duration of the sub-contracting relation in which the sub-contractor’s employees have worked at the workplace of the main employer.

The main employer and the sub-contractor cannot determine to eliminate the afore-mentioned joint liability clause. Provisions within the sub-contracting agreement which eliminate the joint liability will be deemed as invalid against the claims of employees. However, the Court of Appeal states that the main employer and the sub-contractor may claim payments which have been made to employees from each other by way of recourse if this has been determined within the sub-contracting agreement.

Furthermore, in order to protect the employees and to prevent the evasion of law, it has been prohibited by law to enter into colourable sub-contracting agreements. Article 2/7 of the Employment Law states that;

  • The rights of main employer’s employees cannot be limited through employment by the sub-contractor.
    The sub-contractor is allowed to hire the main employer’s employees. However, rights of such employees cannot be restricted by the sub-contractor through the new employment agreement. In other words, the employee’s working conditions, and employment rights cannot be reduced if they start to work for the sub-contractor.
  • A sub-contracting relation cannot be established with any person who has been previously employed in the workplace of the main employer.
    The main employer cannot enter into a sub-contracting agreement if the sub-contractor was previously an employee of the main employer.
  • The main activity cannot be divided and assigned to sub-contractors except for the works which are required by the business or the work itself, and for the works requiring expertise due to technologic reasons.
    Principally, the main activity cannot be divided and assigned to sub-contractors. However, if the business contains multiple complementary activities and some activities require technological expertise, a sub-contractor can be assigned. On the other hand, it must be stated that the employer cannot assign all its activities to the sub-contractor even if they meet with the above-mentioned conditions.

In addition to the above terms, Article 11/4 of the Sub-Contracting Regulation states that the sub-contractor cannot assign the work to another sub-contractor. To add more, Article 12/2-e of the Sub-Contracting Regulation states that, except to supervise and ensure the coordination, the main employer cannot instruct its own employees to work on the job which has been assigned to the sub-contractor.

If the parties have entered into a sub-contracting agreement and the sub-contracting relation does not meet the requirements state above, such relation will be deemed as colourable. As per Article 98 of the Employment Law, in the event of a colourable sub-contracting relation, the main employer and the sub-contractor will separately be under the obligation to pay administrative fines for each employee. They will also be under the obligation to pay administrative fines for each month following the finalisation of the penalty until the breach has been resolved.

Furthermore, in accordance with Article 2/7 of the Employment Law, the sub-contractor’s employees will be deemed as the employees of the main employer since the beginning of the sub-contracting relationship, in the event of colourable circumstances. In such a scenario, the employees will be able to claim their rights from the main employer.

Following the determination of a colourable relation, sub-contractor’s employees will also be able to retrospectively claim salary differences and other benefits from the main employer, if an employee of the main employer who carries out the same job earns a higher amount of salary or receives additional benefits. Additionally, if the main employer is a party to a collective employment agreement, sub-contractor’s employees will also be subject to the same agreement provided that such employees are members of the same labour union.

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