The rule most feared by foreign employers

The regulation that foreign investors in Turkey most frequently shy away from when establishing a company is contained in a single sentence: “You must employ 5 Turkish citizens for every foreign employee.” This rule, at first glance, appears as a difficult threshold to reach for a newly established or small company, and it causes many investment decisions to pause before they even begin.

However, in the implementation of the rule — especially for foreign company partners — there is a significant nuance and multiple exemptions. When structured correctly, this rule can be overcome for most investors, and in some cases, it is not applied at all. In this guide, we explain how the rule actually works and the paths to exemption.

What does the rule actually say?

According to the general assessment criterion, it is essential that at least 5 Turkish citizens are employed with SGK (Social Security Institution) for each foreign individual requested to be employed at the workplace where the work permit application is made. If a permit is requested for more than one foreigner at the same workplace, the condition of 5 Turkish employees is sought for each one separately (e.g., 2 foreigners = 10 Turkish employees).

This is a directly applied threshold for foreigners actually working (employees) at the workplace. However, the scenario that primarily concerns the investor — working as a partner in their own company — operates somewhat differently.

Nuance: For company partners, the rule applies from the 7th month onwards

This is the most important point that reassures investors: For a foreign company partner, the condition of employing 5 Turkish citizens is sought not for the entire duration of the work permit, but only for the last 6 months.

In practice, this means: The employment of 5 Turkish citizens is not required during the first 6 months of a one-year work permit; this condition comes into effect around the 7th month of the permit period. Thus, the foreign company owner can start operations in the initial months of establishment without having to meet this threshold; they can build their team until the second half of the permit period.

This “7th month” rule significantly eases the cash flow and employment pressure during the establishment phase.

Ways to Exemption: Not Applying the Rule at All

Beyond knowing how the rule works, the real value lies in the doors to exemption. When the correct structure is chosen, the employment (and often financial solvency) criterion is not applied at all.

1) Share Capital of 100,000 USD and Above — The Clearest Way Out

This is the cleanest exemption for investors: If the foreign partner’s capital share is 100,000 US Dollars or more, the employment criterion, financial solvency criterion, and partnership share condition are not applied in the evaluation of the work permit application.

In other words, neither the 5 Turkish citizen requirement nor the minimum share/capital thresholds come into effect. For an investor planning to make a significant investment in Turkey, this is the structure that most facilitates the process and is usually the first option to be considered.

2) High-Turnover Workplace — First 5 Foreigners Exempt

In workplaces where the net sales amount in the last year was 50,000,000 TL or more, the employment criterion is not applied for up to the first 5 foreign employees. This is a practical exemption for investors joining an established, high-turnover company.

3) IT Sector — Maximum 2 Foreigners Exempt

In jobs requiring expertise such as software development, database specialization, and mobile software, employment and financial adequacy criteria are not applied for a maximum of 2 foreign nationals. This is an important convenience for technology startups and software companies.

4) R&D / Technopark — Full exemption with Ministry’s opinion

For foreign nationals who will work as R&D/innovation/design personnel in companies with an R&D center or design center certificate, and for foreign nationals who will work within the scope of Technology Development Zones (Law No. 4691); employment and financial adequacy criteria are not applied, provided that a positive opinion from the Ministry of Industry and Technology is obtained. This is the strongest exemption opportunity for qualified technology startups operating within a technopark.

5) Advanced technology and qualified investments

In cases of qualified investments that are committed to making a high contribution to the national economy or creating a large number of jobs, or in jobs requiring advanced technology, or when there is no Turkish expert of the same qualification, general evaluation criteria may be applied partially or entirely.

6) Foreign nationals who have resided legally in Turkey for a long time — maximum 3 people

For foreign nationals who have resided legally in Turkey with a residence/work permit or under international protection for at least 3 years out of the last 5 years preceding the application date (excluding student residence permits), employment and financial adequacy criteria are not applied, limited to a maximum of 3 foreign nationals. In this case, the number of foreign nationals cannot exceed the number of Turkish employees.

Exemptions — Quick Comparison

Since thresholds and implementation principles may change periodically, current criteria must be confirmed before application.

Frequently Asked Questions (FAQ)

Does the “5 Turkish employees” rule also apply to foreign company owners? Yes, but not throughout the entire period: For a company partner, this condition is sought for the last 6 months of the work permit; meaning that starting from approximately the 7th month, at least 5 Turkish insured personnel are expected.

Do I need to employ 5 Turkish citizens in the first month of establishment? No, not for a company partner. This condition is not sought in the first 6 months; you can form your team until the second half of the permit period.

How can I completely get rid of the 5 Turkish employees condition? The clearest way is for your capital share to be 100,000 USD or more; in this case, employment, financial adequacy, and partnership share conditions do not apply. Informatics, R&D/technopark, and qualified investment paths also provide exemptions.

How many people is the informatics exemption limited to? In specialized informatics jobs, employment and financial adequacy criteria do not apply for a maximum of 2 foreign individuals.

If I have a company in a technopark, does the rule not apply? In companies within Technology Development Zones or those with R&D/design center certificates, with the positive opinion of the Ministry of Industry and Technology, employment and financial adequacy criteria do not apply.

If I’m going to employ two foreign nationals, how many Turkish nationals are required? Since the general rule requires 5 Turkish nationals for each foreign national separately, 10 Turkish nationals are required for 2 foreign nationals — unless you are covered by an exemption.

Is there a limit to the number of foreign nationals covered by an exemption? Yes, in some exemptions: there are limits such as 2 in informatics, 3 for “3 years of legal stay in 5 years”, and the first 5 foreign nationals for high turnover. However, the 100,000 USD and R&D/technopark paths disable the criterion without imposing a person limit.

Why is expert legal support necessary? — 2M Hukuk Law Firm

The “5 Turkish” rule is not an obstacle, but a criterion that can be managed with the right structuring. The main issue is to choose the most suitable exemption gateway for your investment and to design the company structure accordingly: Is it planning the capital share according to the 100,000 USD threshold, establishing a technopark/R&D structure, or joining a high-turnover structure? Incorrect structuring means both unnecessarily undertaking the 5 Turkish obligation and a rejected application.

Tuzla-based 2M Hukuk Law Firm (Founder: Atty. Meryem Günay) provides legal consultancy to investors and businesses in Istanbul’s Anatolian Side (Tuzla, Pendik, Kartal, Maltepe) and Kocaeli region. This region, concentrated in industry, logistics, and maritime, regularly attracts foreign capital, and the firm’s expertise in commercial, maritime, and corporate law directly reflects on the investor’s employment and work permit strategy.

2M Hukuk’s support in this regard:

Exemption strategy: Determining the most suitable exemption path for your investment (100,000 USD threshold, informatics, R&D/technopark, high turnover).

Company and capital structuring: Planning share ratios and capital in a way that bypasses the criteria.

Employment planning: Designing the recruitment timing according to the “7th month” rule.

Application and file management: Complete file, justification, and process tracking; Ministry’s positive opinion processes when necessary.

Appeal in case of refusal: Administrative appeal and annulment lawsuit processes in the administrative court.