Establishing a Hotel Business in Turkey
Both real persons and legal entities are allowed to start an hotell in Turkey. Once the place and sufficient capital are ready, an hotel can be easily opened.
In order to start an hotel, the investor shall obtain a business license from the related Municipality. The application for the business license shall be made to the related municipality with a fixed form which can be found on the website of Municipalities. Application process may last 1-3 workdays. Application fee can be changed according to the Municipality in which the hotel is considered to be started. However, we would like to state that, the business license application fee will be approximately 5000 TL+ 2 TL per m2.
Once the business license is obtained, the investor can start running the hotel. In order to record the hostel under the Ministry of Culture and Tourism, a tourism operation license can be obtained. Please note that this license is not obligatory to take. Necessary documents to apply are a basic petition, facility advertising report, signature declaration and business license. The cost of this license is around 2500 TL.
Company Establishment
Within the framework of the current Turkish Commercial Code (TCC) joint stock company and limited company are the most frequently used company types in Turkey.
1. Joint Stock Company: The company’s stock capital is divided into shares and the liability of the shareholders is limited with the capital subscribed by the shareholders. At least one (1) shareholder (real person or legal entity) and minimum capital of 50.000 TL (25.000 Euro apprx.) are needed to establish a Joint Stock Company. ¼ of the share capital is paid before the registration and the remaining shall be paid within 24 months following the registration. Joint Stock Companies can engage in any type of commercial and industrial activity allowed by Turkish law, however, depending on their activity some Joint Stock Companies may require permission from the Ministry of Industry and Commerce. The Board of Directors of the company is responsible from the public debts and tax claims with their own personal assets.
2. Limited Liability Company: At least one shareholder (real person or legal entity) and minimum capital of 10,000 TL (5.000 Euro apprx.) are needed to establish a Limited Liability Company. The company may not display activities in banking and insurance fields. It has two organs namely, Directors and Shareholders Assembly respectively for representation and administration. It may not be offered to public and its shares may not be traded in the stock. The company’s shareholders are responsible from the public debt and tax claims of the company. Their responsibility is limited to their share ratio of the capital of the company.
Documents required for the Establishment of a Company
In case the foreign national shareholder is a real person the required documents are:
• Documents of Constitution
• Two copies of the passport (will be translated and certified by notary public) and two passport size photos.
• Potential Tax ID Number
In case the shareholder is a legal entity required documents are as follows:
• The foreign investor should have an Activity Certificate of his or her company prepared by the relevant authority in the investor’s country. This certificate should contain the information about the current active status of the company and its signature executives.
• Power of Attorney should show the real person who will run the establishment procedure in Turkey on behalf of the company in origin.
• We need a Signature Declaration signed by the Directors on behalf of the company. In order to draft the Signature Declaration we need a full name of the company to be established.
• We need an apostilled Board Decision of the shareholder company indicating the details of the company such as the shareholding structure and the title of the company to be established.
According to the current legislation, all the documents and statements described above should be submitted to the Trade Registry Offices located at the province where the company will be established. The documents delivered to Trade Registry Offices should get the official approval after their examination of whether all given and described conditions on the documents and statements are in compliance with the current legislation. The company can start to operate its business activity after the approval and registration of Trade Registry. Company registrations are announced to third parties through Turkish Trade Registration Newspaper by Trade Registry Offices in Ankara.
Work Permit Requirements for Foreign Employees
1) In order for a Workplace to request a work permit for a foreign employee, at least five employees who are citizens of the Republic of Turkey must be employed. If the foreign employee who requests a work permit is a co-partner of the company, than five Turkish
citizen employees must be employed for the previous six months for to be able to request a work permit from the Ministry of Labor.
If a Workplace request a work permit for more than one foreign employee than the Workplace has to employ five Turkish citizens for each foreign employee. For example, if a Workplace has 15 Turkish citizen employees than the Workplace can only apply for work permit for three foreign employees.
2) Paid-in capital of the workplace must be at least TRY 100,000 or the lowest figure for its gross sales amount must be equal to TRY 800,000 or its export amount in the last year must be at least USD 250,000.
Application Procedures for Work Permit
Applications for work permits can be made inside or outside of Turkey;
1. Foreigners residing outside Turkey shall apply to the relevant Turkish Consulate of either his/her country of residence or his/her country of citizenship.
2. Foreigners with a valid residence permit in Turkey (valid for a minimum of 6 months, except for residence permits for educational purposes) can apply directly to the Ministry of Labor and Social Security Administration.
1. FOREIGNERS RESIDING OUTSIDE of TURKEY:
a. Individual Applicant; should apply to the relevant Turkish Consulate for work visa with
• Passport
• Work visa application
• 1 Photo
• 1 copy of the work contract
b. Applicant company or attorney (In Turkey); following the individuals application, should apply to the Turkish Ministry of Labor and Social Security Administration for work permit.
• Online application should be filed within 6 days following the individual’s application. The application can be made on “e-devlet” website and an “e-devlet password” is needed for the application. The reference number that has given to the individual from the consulate (it can only be provided from official website of consulates) should be provided in order to make the application.
• The issuing process will take around 30 days.
• Foreign nationals need an authorized Turkish citizen with a power of attorney to handle their electronic application as the process requires a Turkish national identification number.
c. Once the work permit has been issued and the work visa application has been approved by the Ministry of Labor and Social Security Administration;
• Applicant individual should pay the non-refundable work visa processing fee and non-refundable work permit processing fee that has been determined from the Ministry of Labor and Social Security Administration to the Turkish Consulate;
• To obtain a residence permit, work visa and work permit holders must apply to the Foreigners Branch of the Local Police Department (Emniyet Mudurlugu Yabancilar Subesi)and have to obtain an online appointment from http://yabancilar.iem.gov.tr/ within 30 days following their arrival in Turkey.(The date of appointment arranged through the E-Appointment system is considered as the application date; and the person will be considered to have applied even when visa period or residence permit period expired before the appointment date.) The applicant individual should bring 4 passport size photo, his/her passport, a full Xerox copy of the passport, the work permit documents that has obtained from Turkish Ministry of Labor and Social Security Administration and a copy of work permit document.
THE APPLICANT COMPANY SHOULD OBTAIN INSURANCE OF THE INDIVIDUAL APPLICANT WITHIN 7 DAYS (The obtained insurance should be in accordance with Social Security Administration Provincial Directorate)
APPLICATION PROCEDURES FOR EXTENDING RESIDENCE PERMIT
The foreigners have the right to extend their permits within 15 days starting from the expiration date. In this regard no charges and book fee will be collected from the foreigners who has residence permit in Turkey and leave the country within 15 days from the date of the expiration of permit. Therefore, applications should be submitted on time in order not to pay any late fees.
1. Renewing or Extending Residence Permits:
a- Foreigners who are willing to renew or extend their residence permits in Turkey have to apply to the security authorities within 15 days starting from the expiration date. Online appointment should be taken. (The date of appointment arranged through the E-Appointment system is considered as the application date; and the person will be considered to have applied even when visa period or residence permit period is experied before the appointment date.)
b- Expired residence permits can be extended maximum for 4 times.
c- Even if the status of the foreigner has changed (changes such as address, job, status, marital status and moving from another city different from where he/she obtained the residence permit) extension should be performed on the same permit given before.
Duration of the residence permit is 5 years. In accordance with the article of reciprocity this term can be determined as longer or shorter by the Ministry of Interior upon obtaining the opinion of the Ministry of Foreign Affairs. Maximum 4 extensions can be conducted on the expired residence permit. Extending residence permits up to 4 times is a requirement of amended 9th Article of 4360 law and 5683 numbered law. Therefore extension will be done on the same permit up to four times no matter for whatever reason it is issued. Duration of the residence permit changes according to the reason of presence in Turkey, nationality, documents to be submitted by the applicant, special cases and status. In accordance with 5683 numbered law, duration of the residence permit is 5 years. Countries are divided into two categories in order to determine the term of the residence permits:
A Group: OECD and EU member countries (long term residence permits) and
B Group: Countries other than OECD and EU members (short term residence permit).
Issued Residence Permit is valid for 3 years for the first time and 5 years for citizens of OECD and EU member countries coming to Turkey upon their request at the end of their duration regardless their visa types and terms.
For the first residence permit and extension procedures of the foreigners who come to Turkey are granted 5 year residency permits upon their request without referring to their visa types foreigners who are: those usually buy real estate and settle in vacation regions; those with the intention of staying in the country and actually settled in the country, those assume that they have developed bond with Turkey for their personal life through their own will or as a result of their family, those made Turkey the center of their social lives as well as made Turkey the place to live.
d-The documents for long term residence permit application are:
• 4 passport size photo
• Passport and a full Xerox copy of passport
• A statement of the bank in Turkey states that the applicant have 300 USD or equivalent amount income per month (e.g. For the request of 6 months residence permit you need to show a statement of 1.800 USD or equivalent) or exchange purchase document for that amount.
OBTAINING WORK PERMIT FOR “EXUCUTIVE PERSONNEL”
In accordance with Turkish Laws; a position in the company such as “COO, CEO and managing director” will be evaluated as “executive personnel”. Executive personnel’s work permit is regulated under law of Special Direct Foreign Investment. Despite long procedure to obtain work permit, it is really easy to have a work permit for executive personnel in a short time (about fifteen days). The documents to be submitted to Ministry of Labor and Social Security Administration to have a working permit for key personnel are listed below in two main topics:
A) DOCUMENTS TO BE SUBMITTED BY EMPLOYEE
1. A work permit application petition addressed to Ministry of Labor and Social Security Administration
2. Application Form for Foreigner (4 copies/3 pages, with photograph which should be taken in last six months, signed originally with both employer and the foreign personnel)
3. Passport Copy (Translated to Turkish and notarized /consulate approved),
4. Diploma Copy (Translated to Turkish and notarized /consulate approved)
5. For interior applications residence permit (notarized copy) (Except residence permit for education, the residence permit has to be at least for six months and the application has to be done in this period. Otherwise, the foreigner has to apply from the Foreign Representative of Turkey in his/her country)
6. CV (1 copy / 2 pages, prepared in Turkish)
7. A document proofing the status, if the foreigner is a partner representative, nominated by principal company abroad or holding the status of executive personnel (given by the employer, approved by competent authority)
B) DOCUMENTS TO BE SUBMITTED BY EMPLOYER
1. A work permit application petition addressing Ministry of Labor and Social Security Administration,
2. Documents provided to company that is related to Article 4 of Regulations On The Employment Of Personnel Of Foreign Nationality In Direct Foreign Investment (mentioned above),
3. Balance sheet and statement of profit and loss related to last year of the company (approved by tax administration or chartered accountant),
4. If the company is a foreign capital company, Turkish Trade Registry Gazette showing the last capital and partnership structure (or a copy approved by company)
5. If the foreigner is under a social security system in his/her own country, a document given by public authorities of his/her homeland. (translated to Turkish and notarized),
6. List of Insured employees which indicates all Turkish and foreign staff is required. (Concerning last month).
Conditions regarding to the company that employs a executive personnel under law of Special Direct Foreign Investment;
A company must provide one of the following circumstances to be recornized as “special direct foreign investments” :
a) The fact that the company’s or branch’s last annual turnover amounts to be at least 79,8 million Turkish Lira, under the condition that the total capital share of the foreign shareholders amounts to be at least 1.062.691 million Turkish Lira,
b) The fact that the company’s or branch’s last annual exports amount to be at least 1 million US Dollars, under the condition that the total capital share of the foreign shareholders amounts to be at least 1.062.691 million Turkish Lira,
c) The fact that at least 250 personnel are employed with the company or branch within the last year, and personnel is registered with the Social Security Administration, under the condition that the total capital share of the foreign shareholders amount to be at least 1.062.691 million Turkish Lira,
d) In case the company or branch shall realize an investment, the minimum fixed investment amount foreseen shall be at least 26.6 million Turkish Lira,
e) The fact that the principal company has direct foreign investment at least in one more country apart from the country where its head offices are situated,
OBTAINING WORK PERMİT FOR “EXCEPTIONAL EMPLOYEES”
In accordance with regulations of Ministry of Labor and Social Security Administration exceptional employees are described mentioned below:
1) Employees to be employed in work areas who have advanced technology skills,
or
2) In the absence of advanced skilled Turkish citizen employee who is not as skilled as foreign employee,
any company intended to hire employees do not have to meet requirements mentioned below;
a) At the workplace for which work permit is requested, at least five persons who are citizens of the Republic of Turkey must be employed. In case the foreigner requesting work permit is a co-partner of the company, aforementioned condition related to the employment of five persons who are Turkish citizens will be required for the last six months of one-year, in order for permit to be granted by the Ministry. In case of requesting work permit for more than one foreigner at the same workplace, for each foreigner following the first foreigner who is granted a work permit, the condition regarding the employment of five persons who are Turkish citizens will be required individually.
b) Paid-in capital of the workplace must be at least TRY 100,000 or the lowest figure for its gross sales amount must be equal to TRY 800,000 or its export amount in the last year must be at least USD 250,000.
Therefore, it would be easy to have work permit for employees in this way compared to general way mentioned top of the first page. However it should be better to note that; obtaining work permit for exceptional employees depends on approval of Ministry of Labor and Social Security Administration.
VISA INFORMATION FOR FOREIGNERS
As of April 17, 2013, electronic visa (e-Visa) replaces “sticker visa” which was issued at the border crossings. Applicants just need to log on to www.evisa.gov.tr , provide the requested information, (after the application is approved) make online payment and download their e-Visa.
E-visa is only valid when the purpose of travel is tourism or commerce. Other purposes, such as work and study, require regular visa given by Embassies or Consulates.
Passports should be valid at least six months from the expiration date of the requested visa.
If foreigners have valid visa, it is not necessary to have residence permit up to 90 days. On the other hand, foreigners who shall reside, work or study in Turkey, should register themselves at the nearest local police department upon their arrival in Turkey, regardless of the validity of their visa.