5 Turkish Employee Rule and Exemptions in Foreign-Owned Companies in Turkey

5 Turkish Employee Rule and Exemptions in Foreign-Owned Companies in Turkey (Ministry of Labor Criteria)

For foreign-owned companies operating in Turkey, obtaining work permits for their foreign managers (shareholders) or foreign employees from the Ministry of Labor and Social Security (MoLSS) is subject to strict employment and financial criteria. The most critical and commonly encountered of these requirements is the "5 Turkish Employee Rule".

What is the 5 Turkish Employee Rule?

According to the work permit evaluation criteria, for every foreign national (including shareholder-managers) applying for a work permit, the employing workplace must actively employ at least 5 (five) Turkish citizens registered with the Social Security Institution (SGK).

If the foreign national applying for the work permit is also a shareholder of the company, this requirement to employ 5 Turkish citizens is evaluated for the last six months of the one-year work permit granted by the Ministry. This means newly established companies are granted a 6-month grace period for their foreign shareholder-managers. However, the quota must be met starting from the 6th month and maintained until the permit renewal period. For foreign nationals who are regular employees (non-shareholders), the company must have 5 active Turkish employees registered with SGK at the exact time of the application.

Minimum Capital and Financial Criteria

In addition to the employment rule, the financial structure of the workplace must also meet certain thresholds:

• The paid-in capital of the workplace must be at least 100,000 TRY, OR
• Gross sales must be at least 800,000 TRY, OR
• The export amount from the previous year must be at least 250,000 USD.

Exceptions to the Rule and Foreign Direct Investment (FDI) Exemptions

In certain special cases and for qualified investments, the 5 Turkish employee rule may be relaxed or completely waived:

1. Special Foreign Direct Investments (FDI):
   If the company's previous year turnover, exports, or employment size meets the statutory criteria for a "Special Foreign Direct Investment", this rule can be relaxed for foreign employees holding "Key Personnel" status.
2. Advanced Technology and Qualified Personnel:
   For roles requiring advanced technology expertise or highly specific qualifications where a Turkish specialist cannot be found, the rule may be waived provided the situation is proven with justified grounds.
3. Tourism, Aviation, and Education Sectors:
   Different quota calculations apply to certified tourism establishments of a certain size and entities operating in the aviation sector.
4. Foreigners under Temporary Protection:
   The employment quotas for foreigners under temporary protection (e.g., Syrian nationals) are regulated by different directives, usually requiring sectoral assessments.

Why is Legal Consultation Crucial?

Especially for international foreign trade companies operating in the Mersin Free Zone, the port vicinity, and the Mediterranean region, having work permit applications for foreign managers rejected after company establishment can lead to risks of deportation or severe administrative fines.

Our expert Mersin Foreigners Law Attorney department pre-audits your company's financial and employment infrastructure for compliance with MoLSS criteria, legally securing your work permit processes.

This article is provided for general informational purposes only. As specific legal circumstances and statutory regulations may vary, readers are advised to seek professional legal counsel from Gönen Law Office before undertaking any legally binding actions. You can contact our law office for company incorporation, SGK processes, and work permit applications.