Turkey: EOR or a Turkish entity

Should you use an EOR or incorporate in Turkey?

The two routes answer different questions. An Employer of Record answers how to employ someone in Turkey now, without a local presence. A Turkish company answers how to trade, contract and hire in Turkey in your own name.

Turkey is a market where the incorporation itself is comparatively easy and the machinery behind it is not. A limited şirket is registered at a Trade Registry Directorate operating as a one-stop shop, on TRY 50,000 of share capital and the Presidency's own investment guidance describes the registry step as completed within the same day. What follows is the work: an SGK workplace registration, compliant monthly payroll, correct cumulative income tax withholding, stamp tax, statutory leave tracking, severance accrual and annual accounting and filing obligations that continue whether or not anyone is employed that month.

When is each route the right one?

The deciding factor is rarely cost alone, and in Turkey it is rarely speed either, because incorporating is not the slow part.

Choose an Employer of Record when:

• The requirement is people rather than presence: a first hire, a small team or a market test
• The work is project-length or tied to a defined scope, so a permanent legal presence is hard to justify
• Reversibility matters, because the arrangement ends with the agreement rather than through liquidation
• Nobody in the business wants to own Turkish payroll compliance, which is administratively heavier than most European equivalents and changes more often

Choose your own Turkish entity when:

• The business needs to contract and invoice in Turkey in its own name and carry delivery risk locally
• Headcount makes per-employee fees exceed the fixed cost of running a company
• The plan is a durable Turkish operation rather than a test and the fixed costs are being bought deliberately
• You qualify as a manufacturing employer under NACE Rev. 2.1 Section C, where the retained five-point social security discount is worth having directly

The onshore contracting point is a commercial question rather than an employment one. If the plan is to hold Turkish contracts, invoice locally and carry the delivery risk in your own name, you need the company and the employment decision follows from it rather than driving it.

Why does incorporating not solve foreign-national hiring?

Whether it does depends on how the work is funded, not on how good the hire is.

A limited şirket can be formed on TRY 50,000 of share capital. Sponsoring a foreign worker is a separate test and for a newly formed company it is a harder one. It must hold TRY 500,000 in paid-in capital and already employ five Turkish citizens registered with SGK for each foreign hire requested, counted separately for every one. A company with a trading year behind it can offer TRY 8,000,000 in net sales or USD 150,000 in exports instead of the capital; a new one has neither, so it faces the TRY 500,000 outright. On top of both sits a minimum salary of one to five times the minimum wage, set by occupation category.

The exemptions are real and they are not where most guides look. The Ministry sets them out across its evaluation criteria: some on a sector, occupation or work basis, others by employer or by the individual's own status. They include these.

• The occupation. Roles such as software development, database, mobile software, systems network and security and enterprise architecture are, as a rule, not tested on the employment and financial criteria. Inside an IT-sector business there is no cap on how many; outside one, two hires.
• The contract. Work covered by a provision in a bilateral or multilateral agreement Turkey is party to, and work under a public institution's contract or tender including every subcontractor in that chain, is exempt from those two criteria whatever the occupation.
• The employer. Net sales of TRY 50,000,000 or more releases the headcount ratio for up to five hires. Manufacturing employers may take one extra foreign worker for every five Turkish citizens at a branch. Poultry and recycling employers have the same allowance for animal-care and collection roles. Both reliefs lift the headcount ratio only and run to 31 December 2027. Certificated tourism businesses employing ten Turkish citizens are released from the ratio. Companies holding an R&D or design centre certificate under Law No. 5746 are exempt from those two criteria for their research, development and design staff and anyone working inside a technology development zone under Law No. 4691 is exempt whatever their role, in both cases where the Ministry of Industry and Technology gives a favourable opinion.
• The individual. Eight years' lawful residence in Turkey, three years married to a Turkish citizen, a Turkish parent or child, or long-term residence. These reach the salary criterion alongside the employment and financial ones.
• Discretion. The Directorate General may waive the general criteria in whole or in part for qualified investments, advanced-technology work, or where no Turkish specialist of equivalent qualification exists.

Engineering and architecture are named once in the criteria, in the wage table that sets them at four times the minimum wage and no sector or occupation heading is written around them or around site management. Relief there has to come from something other than the job title, usually from the contract the work sits under or the sector of the workplace. A Turkish public tender or a treaty project carries the exemption with it, down through the subcontractors, so an EPC contractor on public infrastructure is in a very different position from the same firm doing privately commissioned work. A privately funded engineering, energy or staffing deployment should plan against the full criteria and it is the case an EOR most clearly answers.

The practical consequence. For Turkish nationals, incorporating and using an EOR are comparable routes and the choice turns on cost, control and whether onshore contracting is needed. For a foreign national in a technology role, or on public or treaty work, incorporating is a more realistic route than most guides suggest. For a privately funded deployment in any other field the two are not comparable in the first year or two and a plan that assumes a new Turkish entity can sponsor that permit shortly after registration will not survive contact with the criteria.

What does an EOR not solve?

An Employer of Record does not give a company the right to trade in Turkey, does not create a contracting or invoicing presence and does not transfer responsibility for how the employee is directed day to day.

It also does not make the work permit criteria disappear, it moves where they are tested. A permit is still assessed against the sponsoring employer's capital position and Turkish headcount, so a provider's actual standing in Turkey is a question worth asking directly rather than assuming, particularly for a foreign-national deployment.

Engaging someone as a contractor while directing their hours, tools and reporting line as an employer would is a mischaracterisation regardless of the structure behind it. These arrangements surface through SGK inspection and through the employee's own claim for recognition of service and the exposure is retrospective premiums with late-payment interest, administrative fines under Article 102 of Law No. 5510 and the severance and notice entitlements that would have accrued had the relationship been declared correctly.

How do companies usually sequence this?

The common sequence is to deploy the first people through an EOR, establish whether the work is durable and incorporate once contract flow or headcount justifies the fixed cost.

That works because the routes are compatible. Employment can move from an EOR to a company's own registration once the trade registry and SGK registrations exist and it means the incorporation decision is taken with real operating experience in Turkey rather than ahead of it.

Continuity of service is the detail to get right at that point. Move the contract across as a documented transfer with the employee's written consent and the original start date carries over for every service-linked right, including severance and notice. Ending the employment and re-hiring the same person into the new entity instead restarts seniority and the accrued severance crystallises and falls due on the way out rather than travelling with them.

The step most often skipped is the fourth. Companies that plan to hire Turkish nationals can move from step three straight to step five. Companies that intend to bring in foreign specialists cannot, and discovering that after incorporating is considerably more expensive than planning for it beforehand.

The alternative sequence, incorporating first, is right where the Turkish contract is the reason for being in the market at all. In that case the company is not overhead, it is the thing being bought.

One further point of timing applies to anyone considering buying or inheriting an existing Turkish company rather than forming one. Companies whose share capital still sits below the current statutory floors must increase it to TRY 50,000 for a limited şirket or TRY 250,000 for a joint stock company by 31 December 2026, or be deemed dissolved with no registry transactions permitted other than liquidation. That is worth checking before any acquisition of a dormant Turkish entity completes.

For the full statutory detail behind these routes, including contracts, working time, leave, termination and the 2026 cost reference table, see the complete guide to hiring employees in Turkey. For the 2026 employer cost position and what changed under Law No. 7566, see the Turkey EOR hub.