Foreign nationals wishing to establish or become partners in a company in Türkiye frequently ask whether being a company partner is sufficient to work here.
Questions such as “Do I need a separate work permit if I am a partner?”, “Must I employ five Turkish citizens?” and “Does the company need a minimum amount of capital?” often arise, particularly in foreign-owned companies.
Being a company partner and actually working in Türkiye are legally different matters.
Can a foreign national become a company partner in Türkiye?
Foreign individuals may establish a company or become partners in an existing company subject to the conditions in the legislation. Becoming a partner does not, by itself, grant a right to work in Türkiye. Court decisions also emphasise the need for a work permit for foreign nationals working in an employed or self-employed capacity. For example, the Court of Cassation’s 10th Civil Chamber stated in its decision of 27 May 2021 that a foreign national must obtain a permit from the competent authorities to work for an employer.
Ownership of shares must therefore be assessed separately from actually working in or managing the company.
Can a foreign partner also be a manager?
This question arises particularly in limited liability companies.
The Ankara 14th Commercial Court of First Instance addressed it in a decision dated 6 June 2024. The court stated that a foreign partner in a limited liability company may be a manager, but must obtain a work permit to work in Türkiye.
Accordingly:
being a company partner being a company manager actually working in Türkiye
may each have different legal consequences.
Does the “five Turkish employees” condition always apply?
One of the best-known work permit criteria concerns employing a certain number of Turkish citizens at the workplace.
An important distinction is nevertheless necessary.
The judicial decisions examined do not establish a general and absolute judicial rule that “every foreign company partner must employ five Turkish citizens to obtain a work permit”. Although one Council of State decision examined in the report discussed the employment of only one Turkish citizen in the dissenting opinion, the chamber majority did not adopt this as a general “five-person condition”.
Statutory provisions must therefore be distinguished from the administration’s current assessment criteria.
Must the company have at least TRY 500,000 in capital?
A similar issue arises concerning company capital.
The decisions examined do not confirm TRY 500,000 in paid-up capital as a general and unchanging statutory condition for granting a work permit. Although this amount appears in some commercial law decisions, those figures concern the particular companies’ capital structures.
The Constitutional Court’s assessment of foreign investments also includes findings that no special minimum capital is prescribed for foreign investors and that general company capital rules apply.
Monetary thresholds found online should therefore be examined to establish their legislative or administrative basis and whether they remain applicable on the application date.
Must the foreign partner own at least 20%?
Another commonly encountered statement is that a foreign partner must hold at least 20% of the company and a specified minimum share value.
No decision establishing a 20% share and TRY 100,000 share value as general work permit conditions was identified among the decisions examined. The report states that these percentages and amounts appear in certain decisions concerning the companies’ own partnership and share disputes.
Foreign partners should therefore not base an application solely on figures found online.
What do courts consider?
In some administrative disputes, the company’s contribution to the national economy and local employment has arisen in the work permit assessment.
For example, in the case considered by the Council of State’s 10th Chamber on 17 March 2021, a foreign company manager’s application had been refused on the ground that the company’s contribution to the national economy and local employment was insufficient. The Council of State upheld the judgment annulling the refusal.
Similarly, in another dispute, a judgment annulling a work permit decision was found lawful despite assertions that the company was making a loss and did not contribute to the national economy.
These decisions are significant because they demonstrate that work permit assessments cannot be reduced to a single figure or company capital alone.
Conclusion: what should foreign partners consider?
A foreign national’s ability to establish or join a company in Türkiye does not automatically grant a right to work here. If the partner or manager will actually work in Türkiye, the work permit obligation must be assessed separately.
It is also incorrect to treat criteria such as five Turkish employees, TRY 500,000 capital, 20% ownership and a minimum share value as direct and unchanging judicial rules in every case. The case-law research did not verify the legal binding effect of these specific thresholds through the decisions examined.
Before applying, the foreign national’s role and ownership percentage, the company’s activities and employment position, and the Ministry’s criteria in force on the application date should be assessed together.
In brief, concluding that a permit “can” or “cannot” be obtained by looking at a few figures online may be misleading. Assessing each application in its own circumstances under current legislation and administrative practice is important to avoid possible refusals and wasted time.