Questions & Answers
We know that there are many questions that every investor would like to know the answer to when it comes to certain issues. We hope that you will find some of your answers here.
- Temporary/Permanent Work
- Definite/Indefinite Period
- Part-time/Work upon Call
Employment contracts concluded for a definite period of time terminate on the date determined in the contract. The employer also has the right to terminate definite period employment contracts under specific conditions indicated under relevant provisions of Labor Law (referred to as “Termination based on Justifiable Grounds”). Such specific conditions are classified under reasons of health, immoral, dishonorable or malicious conduct or other similar behavior actions of employee (e.g. theft, excessive damage to company property, persistence in disobedience, sexual harassment, use of drugs, assault, absence, etc.), force majeure and compelling circumstances (e.g. the employee is sentenced to imprisonment).
The employer, who terminates the contract of an employee engaged for an indefinite period, who is employed in an establishment with thirty or more workers and who meets a minimum seniority of six months, must depend on a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the establishment or service. Before terminating a continual employment contract made for an indefinite period with a valid reason, a notice to the other party must be served by the terminating party.
- 2 weeks of notification period for employment of 0-6 months
- 4 weeks of notification period for employment of 6-18 months
- 6 weeks of notification period for employment of 18-36 months
- 8 weeks of notification period for employment of more than 36 months
Also, it is possible not to respect these periods by paying an amount equal to the pay that the employee would receive during the notification period. Please also be informed the above mentioned notification periods could be extended in favour of the employee by the employment contract.
Real estate purchases
With its young population and investment friendly environment, the real estate prices in Turkey and specifically within Istanbul, are expected to increase significantly in the near future. Istanbul has been touted by PWC and Deloitte Consulting to be the most attractive city for real estate investment in Europe while Turkey overall is ranked 3rd most lucrative country for investment in real estate globally.
Foreign country citizens can buy any kind of property (house, business place, land, field) within the legal restrictions.
It is possible to sign a “promise to sell agreement” before a notary. Such an agreement entitles the buyer to force the owner to transfer of title of deed when the conditions in the agreement are met.
- Foreign country citizens can buy maximum 30 hectares of property in Turkey in total and can acquire limited in rem right.
- Foreign country citizens cannot acquire or rent property within military forbidden zones and security zones.
- Foreign country citizens can acquire property or limited in rem right in a district/town up to 10 % of the total area of the said district/town.
- Legal restrictions do not apply in setting mortgage for real persons and commercial companies having legal personality which are established in foreign countries.
Buyer should be from the country whose citizens can acquire property or limited in rem right in Turkey and meet the necessary conditions.
- Both seller and buyer have to pay the title deed fee, calculated according to the selling price which cannot be less than the “Property Statement Value” to be issued by the relevant municipality. (According to the Charges Law No:492, the title deed fee percentage for each side of the transaction until September 30th, 2017 is 1,5% [3 % in total]. Following such date, the title deed fee percentage for each side of the transaction will be 2% [4 % in total].
- Circulating capital fee which is determined locally has to be paid.
- At the stage when the Land Registry Directorate inquires with the relevant military authorities whether the property is located within a military or special zone, circulating capital fee for the map prepared by the Cadastre Directorate has to be paid.
We strongly recommend that a basic due diligence of the property be performed before the transfer of title of deed where such due diligence shall cover the crosscheck of the following:
- Ownership of the property,
- Limitations on property (attachments, mortgages and etc.)
- In conformity with zoning laws,
- Property taxes,
Establishing a company
According to current Turkish Trade Law, banks, private finance institutions, insurance companies, financial leasing companies, factoring companies, holding companies, companies operating as foreign currency exchange offices, companies dealing with public warehousing, publicly held companies subject to the Capital Markets Law, companies that are founders and operators of free zones should be established as JSCs and these companies are still subject to permit from Ministry of Industry and Trade for their foundations.
Notarization of the articles of association, payment of the 1/4th of the capital, registry to the Trade Registry, and application to the Tax Office is requisite for establishing a JSC or Limited Company. 1/4th of the capital in cash has to be transferred prior to registration.
The company should have a valid address where it is going to be mentioned in the articles of association. This address can be through a lease agreement or purchase of a property.
Manager(s) or director(s) could be foreigners since there is no obligation that managers or directors should be Turkish citizens however please note that if the managers/directors shall be foreigners not residing in Turkey, it is highly recommended that management team should consist of Turkish residents for the management of daily business of the company.
General Directorate of Foreign Investment Undersecreteriat of Treasury is authorized to grant permit to foreign companies to establish liaison offices for the period of 3 years. Note that an extension is also possible. In order for the liaison offices to operate in Turkey, the expenditures of the liaison office shall entirely be met by the legal person resident abroad and the foreign currency shall be brought from abroad. The liaison office is not allowed to engage in any commercial activity or in any field out of the permission subject. Moreover, these offices should not apply for transfer of profits and alike, except for the liquidation procedures.
Ministry of Industry and Commerce is authorized to grant permit to foreign companies to establish branch offices in Turkey. Assignment of a fully authorized representative residing in Turkey and registration to the Trade Registry are required for successfully establishing a branch office of a foreign company in Turkey.