For foreigners seeking to establish a company in Turkey, one of the most critical considerations is the requirement of a work permit in order to actively take part in company operations as a founder or shareholder. Under Turkish law, company shareholding grants the right to invest; however, this status alone does not confer the authority to physically work in Turkey or to manage the company. Accordingly, if a foreign national intends to assume representation authority, serve on the management body, or otherwise engage in an employment relationship within the company, obtaining a work permit from the Ministry of Labor and Social Security is mandatory. Therefore, investors planning a company establishment in Turkey should not focus solely on the commercial registry stage. The work permit application process must be handled simultaneously. Otherwise, mere shareholding does not create an effective right, and any actions taken in the capacity of founder or manager may become legally invalid. This creates significant risks both for the sustainability of the investment and for compliance with Turkish law.
This article will address the question of what a foreign shareholder's work permit is, outline the legal framework governing applications, explain the conditions commonly encountered in practice, set forth the required documents and procedural steps, and highlight frequent mistakes with proposed solutions. The article concludes with answers to frequently asked questions.
What Is a Foreign Shareholder Work Permit?
A foreign shareholder work permit is an official authorization issued by the Ministry of Labor and Social Security, required only when a foreign founder or shareholder of a company in Turkey wishes to reside in Turkey and take an active managerial role. Merely holding shares in a Turkish company grants foreigners the right to invest and receive dividends without any permit obligation. However, if the foreign individual intends to use signing authority as a company director, make decisions as a board member, or participate in the daily operations of the business, a work permit must be obtained.
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The work permit not only regulates the foreign individual's personal legal status but also plays a decisive role in ensuring the validity and legal security of the company's commercial activities. Actions and signatures of foreigners who take part in management or operations without a valid work permit may be subject to administrative sanctions and disputes over validity in commercial litigation. For this reason, it is critical at the establishment stage to clearly determine whether foreign shareholders will remain as passive investors or take on active managerial roles. This distinction is essential for the smooth progress of the process.
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In practice, foreigners acting merely as passive investors are not required to obtain a work permit solely by virtue of their shareholding. However, foreigners who take an active role in management, exercise representation authority, or directly participate in the company's operations must apply to the Ministry for a work permit in order to carry out such activities lawfully. This distinction directly affects both the foreign investor's personal residence and work rights, and the legal validity of the company's commercial transactions.
Obligation of Company Founders and Shareholders to Obtain a Work Permit
Under Turkish law, the employment of foreigners is regulated by the International Workforce Law No. 6735 and related secondary legislation. Simply holding shares in a company or even establishing a company does not, by itself, create a right or an obligation to obtain a work permit. A permit from the Ministry of Labor and Social Security becomes mandatory only if a foreign individual wishes to reside in Turkey and personally manage, represent, or take part in the company's daily operations.
The general principles of the foreign employment regime in Turkey have been examined in detail in our article "Work Permit For Turkey: Requirements and Ways to Get Work Visa". Beyond these general principles, however, specific provisions apply to company founders and shareholders. In evaluating an application, the Ministry considers the company's capital structure, the employment of Turkish nationals, and the role to be assumed by the foreign shareholder. Therefore, holding the title of founder or shareholder does not eliminate the work permit procedure; on the contrary, in most cases it requires a carefully structured application.
This requirement is not about restricting investment rights; rather, it ensures legal certainty when a foreigner takes an active managerial role in Turkey. If a foreign shareholder uses signing authority or directly manages company operations without a permit, such actions may later face legal challenges. By completing the work permit procedure in advance, foreign founders and shareholders secure both the sustainability of their investment and full compliance with Turkish law. Passive investors, however, are not subject to this obligation.
Even minor errors during the application process can lead to serious consequences that disrupt the company's operations, making professional legal support almost indispensable. With the assistance of an experienced attorney, the process can be managed effectively before the Ministry, ensuring both accurate evaluation and the long-term security of the company's operations.
Work Permit Application Process for Foreign Shareholders
Work permit applications for foreigners who are company founders or shareholders are filed through the Ministry of Labor and Social Security's electronic application system (e-Permit). The application method depends on whether the foreigner holds a valid residence permit in Turkey. If the foreigner has a residence permit of at least six months, the application may be filed domestically. Otherwise, the process must begin at the Turkish consulate in the foreigner's home country, with the employer simultaneously filing an application in Turkey via the e-Permit system.
The most critical aspect of the process is the complete preparation of documents to be submitted by both the company and the foreign shareholder. The company must provide documents such as the trade registry gazette, certificate of activity, tax certificate, signature circulars, and recent balance sheet. The foreign shareholder must submit a passport, biometric photograph, diploma or professional qualification certificate, and documents evidencing the employment relationship with the company, such as an employment contract or board resolution. Failure to upload these documents properly into the system is one of the most common reasons for application rejections.
Once the application is submitted, the Ministry evaluates several criteria, including the company's capital structure, the number of Turkish employees, the salary level to be paid to the foreigner, and the role the foreigner will assume within the company. While some flexibility is granted for newly established companies, the general rule is that at least five Turkish citizens must be employed for each foreign employee. In addition, the foreign shareholder's salary must exceed certain multiples of the statutory minimum wage, depending on the position. Failure to meet these criteria may result in rejection of the application.
When the application is approved, the work permit issued by the Ministry also serves as a residence permit for the foreigner. Thus, obtaining the permit secures the foreign shareholder's legal status in Turkey. For the company, securing the work permit eliminates the risk of administrative fines and ensures that the foreigner's management and representation activities are conducted on a lawful basis.
The technical process involves more than simply uploading documents to an electronic platform. The decisive factor is the extent to which the company and the foreign shareholder meet the statutory requirements. Therefore, strategic planning of the application, the preparation of legally sound documentation, and alignment with the Ministry's evaluation criteria are all critical to obtaining the permit.
Required Documents and Conditions for a Work Permit
In a work permit application filed by a foreign company founder or shareholder, both the company and the foreign applicant must prepare and submit documentation. The core of the application consists of evidence demonstrating that the company is actively engaged in business, financially sufficient, and capable of employing the foreign individual. For this purpose, the Ministry typically requires the trade registry gazette, a current certificate of activity, the company's tax certificate, signature circulars, and recent financial statements such as a balance sheet and profit–loss statement. The Ministry pays particular attention to the amount of paid-in capital in newly established companies, often exercising greater caution in granting permits to companies that appear passive or undercapitalized.
The documents to be provided by the foreign shareholder primarily concern identity and professional qualifications. These include a valid passport, biometric photographs, diploma or professional equivalency certificates (if applicable), and documents establishing the employment relationship with the company, such as an employment contract or a resolution of the management body. In sectors such as engineering, healthcare, and education, diploma equivalency procedures are mandatory; failure to provide these documents is a common ground for rejection. In addition, the role and authority the foreigner will assume within the company are decisive in the evaluation. If management or representation authority will be exercised, this must be expressly documented.
Beyond documentation, certain objective criteria set by the Ministry must also be met for an application to succeed. Chief among these is the requirement that at least five Turkish citizens be employed for each foreign worker. While this rule is applied flexibly during the first six months of a newly established company, it becomes mandatory thereafter. Furthermore, the salary to be paid to the foreign shareholder must exceed certain multiples of the statutory minimum wage, depending on the position. The threshold is higher for executives, while different multipliers apply to specialist roles.
Financial sufficiency is another essential element. The Ministry evaluates not only whether the company is registered with the trade registry but also whether it demonstrates sustainable economic activity. This includes sufficient paid-in capital, adequate balance sheet figures, and evidence of active commercial operations. Insufficient financial capacity is one of the most significant reasons for application rejections.
In conclusion, a work permit application is not merely a matter of uploading documents to an electronic system. Success depends on both the employer and the foreign shareholder meeting the statutory requirements. Proper preparation of complete documentation, compliance with employment and financial criteria, and strategic structuring of the application are all indispensable for enabling foreign company founders and shareholders to work lawfully in Turkey.
Common Challenges in Practice and Proposed Solutions
Although the application process for foreign shareholders may appear to be a straightforward online submission of standard documents, in practice unexpected challenges frequently arise. One of the most common issues is the Ministry's finding that the company lacks sufficient financial capacity or that the employment requirements have not been met. For newly established companies in particular, failure to align the paid-in capital or the number of Turkish employees with the statutory thresholds often results in rejection.
Another frequent problem is improper preparation or submission of documents. Missing diploma equivalency certificates, employment contracts drafted in violation of regulations, or incomplete financial records undermine the credibility of the application and frequently lead to refusals. Similarly, failing to clearly document the role and authority of the foreign shareholder within the company creates uncertainty in the Ministry's evaluation and may cause unfavorable outcomes.
The common thread in such errors is treating the process as a mere technical formality, while overlooking the legal standards applied in practice. In reality, work permit applications require not only meeting the statutory minimums but also a solid understanding of how the Ministry applies its evaluation criteria. Foreign investors who attempt to handle the process independently often encounter costly mistakes, losing both time and financial resources.
The solution is to proceed under the guidance of an experienced attorney from the outset. A skilledlawyer in Turkey ensures that documents are properly prepared, that the company's financial structure and staffing plans are aligned with the requirements, and that the foreign shareholder's legal status is framed in the most favorable manner. This approach minimizes the risk of rejection and secures the company's legal compliance after the permit is granted. Professional support also safeguards the success of future renewal applications.
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In summary, for foreign founders and shareholders, the work permit process is not a mere formality—it is a critical legal stage that directly impacts the security and sustainability of the investment. Successfully completing this stage requires mastery of the regulations, practical experience, and a strategic approach. Attempting to navigate the process without professional support carries significant risks, while engaging an experienced attorney provides the most reliable way to protect both time and capital.
Frequently Asked Questions
Is it mandatory for foreign shareholders to obtain a work permit?
No. If a foreign shareholder remains a passive investor—that is, they only hold shares and do not live or work in Turkey—no work permit is required. A work permit is only necessary if the shareholder wishes to reside in Turkey and take an active role in management, representation, or day-to-day company operations.
Can a company founder manage the company without a work permit?
If the founder is outside Turkey and appoints local representatives or managers, no permit is required. However, if the founder wishes to personally manage and represent the company in Turkey, then a work permit from the Ministry of Labor and Social Security becomes mandatory.
How is a foreign work permit application filed?
Applications are submitted electronically through the Ministry of Labor and Social Security's e-Permit system. If the foreigner holds a residence permit valid for at least six months, the application can be filed domestically in Turkey. Otherwise, the application must begin at the Turkish consulate in the foreigner's country of residence, while the employer simultaneously files through the e-Permit system in Turkey. To succeed, both company and foreign shareholder documents must be complete and the statutory criteria satisfied.
How long does the work permit application process take?
If the application is complete, the Ministry generally issues a decision within 30 days. However, missing documents or situations requiring further review may extend this period.
How is the Turkish employee requirement applied in newly established companies?
The general rule is that at least five Turkish citizens must be employed for each foreign worker. For newly established companies, this requirement is applied flexibly in the first six months, but must be met afterwards.
If an application is rejected, can another application be filed?
Yes. A new application may be filed once the deficiencies that caused the rejection are remedied. However, to succeed, the previous mistakes must be carefully analyzed and corrected. Engaging professional legal counsel at this stage significantly increases the likelihood of success.
Conclusion
For foreigners who are founders or shareholders of Turkish companies, the work permit requirement applies only if they intend to reside in Turkey and take an active role in the management or daily operations of the company. Shareholding alone grants the right to invest and receive dividends, without any obligation to obtain a permit. However, authority to personally manage, represent, or engage in company operations requires approval from the Ministry of Labor and Social Security. Without such approval, administrative sanctions may arise, and transactions carried out in a managerial capacity could face challenges to their validity.
Accordingly, the process is not a mere formality of submitting documents, but rather a strategic stage that demands professional legal guidance. Working with an experienced attorney in Turkey not only increases the chances of approval but also provides long-term legal security for your investment. If you are planning to establish a company in Turkey or take an active role in your existing company, you are welcome to contact us to manage the process with confidence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
