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Turkey is a transcontinental nation situated mostly in Anatolia in Western Asia, with a section on the Balkans in Southeast Europe. It is bounded to the north by the Black Sea, to the northeast by Georgia, to the east by Armenia, Azerbaijan, and Iran, to the southeast by Iraq, to the south by Syria and the Mediterranean Sea, to the west by Greece and Bulgaria, and to the northwest by Greece and Bulgaria. Cyprus is situated off the coast of Greece. Turks constitute the great bulk of the population, with Kurds being the biggest minority. Turkey's capital is Ankara, while its main city and financial center is Istanbul.
Present-day Turkey was one of the world's first permanently established places, and was home to notable Neolithic ruins such as Göbekli Tepe, as well as ancient civilizations such as the Hattians, Anatolian peoples, Mycenaean Greeks, and others. Following Alexander the Great's conquests, which began the Hellenistic period, most of current Turkey's ancient territories were culturally Hellenised, which lasted until the Byzantine era. The Sultanate of Rum controlled Anatolia until the Mongol invasion in 1243, when it collapsed into minor Turkish states. The Ottomans consolidated the princes and conquered the Balkans beginning in the late 13th century, while Turkification of Anatolia expanded throughout the Ottoman era. Ottoman expansion resumed under Selim I after Mehmed II seized Constantinople (Istanbul) in 1453. During Suleiman the Magnificent's reign, the Ottoman Empire rose to worldwide prominence. The empire's strength began to dwindle in the late 18th century, with a steady loss of lands. In the early nineteenth century, Mahmud II initiated an era of modernization. The Young Turk Revolution of 1908 limited the Sultan's power and, after a 30-year hiatus, established the Ottoman Parliament, bringing the empire into a multi-party era. The Three Pashas took control of the nation after the 1913 coup, which permitted the Empire's entrance into World War I as part of the Central Powers in 1914. The Ottoman government perpetrated genocide against its Armenian, Greek, and Assyrian citizens throughout the conflict. The Ottoman Empire was partitioned after its loss in the war.
The destruction of the Sultanate on 1 November 1922, the signing of the Treaty of Lausanne (which succeeded the Treaty of Sèvres) on 24 July 1923, and the declaration of the Republic on 29 October 1923 resulted from the Turkish War of Independence against the occupying Allied Powers. Turkey became a secular, unitary, and parliamentary republic as a result of reforms launched by the country's first president, Mustafa Kemal Atatürk. Turkey was a crucial player in the Korean War and joined NATO in 1952. Several military coups occurred in the nation in the later part of the twentieth century. In the 1980s, the economy was liberalized, resulting in higher economic development and political stability. In 2017, a vote replaced the parliamentary republic with a presidential system.
Turkey is a regional power and a newly industrialized nation with a geopolitical advantage. Its economy, which is classed as emergent and growth-leading, is the world's twentieth-largest by nominal GDP and the eleventh-largest by PPP. It is a founder member of the OECD, OSCE, BSEC, OIC, and G20, as well as a charter member of the United Nations, NATO, the IMF, and the World Bank. After joining the Council of Europe in 1950, Turkey became an associate member of the EEC in 1963, joined the EU Customs Union in 1995, and began accession talks with the European Union in 2005. Turkey has a rich cultural heritage created by centuries of history and the impact of the numerous peoples that have occupied its area through millennia; it boasts 19 UNESCO World Heritage Sites and is one of the world's most visited nations.
Employees in Turkey are entitled to vacation time depending on the duration of their employment. Employees with one to five years of employment are entitled to 14 days of annual leave every year. The number rises to 20 days for workers with five to fifteen years of service and to 26 days for those with sixteen years or more of service. Young employees, workers over the age of 50, miners, and those who operate underground are subject to special regulations.
Turkey recognizes 16 national public holidays.
The company is not required to pay the employee's wage while he or she is on sick leave. The employee will be paid by Social Security after three days of sick absence. In actuality, many firms provide ordinary wages for the first two days of sick leave (which are not covered by the Social Security system) or even the full time of sick leave (and get partial refund when paid by SS). The employer has the right to terminate the employee's employment after 6 weeks of sick leave.
Working women have the right to up to 16 weeks of paid maternity leave. Prior to the birth of their kid, they may take up to 8 weeks of this leave. At least three weeks must pass before the deadline. The total maternity leave will be 18 weeks if the baby is born prematurely or in multiples. Payment for maternity leave is provided by social security, based on the employee's regular payments.
Paternity leave is granted to the father for five days. The employee is paid a regular pay while on paternity leave, which is funded by the business.
Marriage leave. 3 days, subject to presenting an official approval of marriage date.
Bereavement leave. 3 days, with respect to losing a close relative such as parent/ child.
Employers with more than 30 employees in Turkey have the legal right to fire employees who have worked for them for more than six months for a legally valid reason. Employees must receive a written termination notice that details the basis for the termination. The notice period is two to eight weeks, depending on the duration of employment of the employee.
For collective redundancies and disciplinary dismissals, special rules apply. Employees with at least one year of service are often entitled to severance pay. Severance pay is equivalent to one month's salary for each year of service. Employees also receive money for unused leave and other benefits, allowances, and premiums received throughout their employment.
Seniority dictates the notice period. The notice period is two weeks for employees with up to six months of seniority. If the seniority is between six and eighteen months, a four-week notice period is required. If the employee has between eighteen and thirty-six months of seniority, the employee will be notified six weeks in advance. Finally, if an employee has worked for the company for more than thirty-six months, they are entitled to a notice period of eight weeks.
Probation is limited to two months.
Employees who have worked for more than one year and have been unfairly dismissed (or have resigned for just cause) are generally entitled to severance pay. The maximum amount of such payment varies according to the specific salary and may not exceed 6,730.15 Turkish lira per year (in 2020), multiplied by the number of years worked for the employer.
Five days per week is the standard workweek, with employees working a maximum of 45 hours per week. Although there is no set schedule for working hours throughout the week, employees are limited to 11 hours in a single day. Underground employment, such as mining, is restricted to six hours per day and 36 hours per week.
Overtime is defined as time worked in excess of these limits and is limited to 270 hours per year with the employee's consent. Overtime is compensated at a rate of 150 percent of the regular salary. Weekend hours are paid at a rate of 200 percent.
Turkey sets a national minimum wage of 440.29 EUR per month.
Turkey's healthcare system is a hybrid of mandatory health insurance and private medical insurance. The Ministry of Health is in charge of managing all health and social welfare operations, and all people are entitled to social security under the Turkish Constitution. The public healthcare system is funded through public health insurance, which is taken automatically from workers' paychecks.
Some companies provide food vouchers or cash allowances, as well as corporate vehicles and/or private healthcare.
Corporations must pay CIT at a rate of 22 percent on net profits earned in 2018, 2019, and 2020, after deducting exemptions and deductions and incorporating prior-year losses carried over to a certain degree.
Income taxes in Turkey varies considerably depending on the taxpayer's place of residence, according to Turkish tax law. Resident entities are taxed on their global revenue, while non-resident companies are only taxed on income generated in Turkey.
Residents in Turkey are taxed on their global income, while non-residents are solely taxed on their earnings in Turkey. Income tax is paid at progressive rates on taxable income after various deductions and allowances. Expats are not subject to a specific tax system.
For a taxable income of up to TRY 24,000, the tax rate is 15 percent.
For a taxable income between TRY 24,000 to TRY 53,000, the tax rate is 20 percent.
For a taxable income between TRY 53,000 to TRY 190,000, the tax rate is 27 percent.
For a taxable income between try 190,000 and TRY 650,000, the tax rate is 35 percent.
For a taxable income over TRY 650,000, the tax rate is 40 percent.
Deliveries of goods and services are subject to VAT at rates ranging from 1% to 18%. The national average is 18%.
VAT paid on local purchases and imports is referred to as 'input VAT,' while VAT computed and collected on sales is referred to as 'output VAT.' In the VAT return submitted with the relevant tax agency, input VAT is offset against output VAT. If output VAT exceeds input VAT, the difference is remitted to the appropriate tax agency. If input VAT exceeds output VAT, the difference is carried over to the next month and adjusted against future output VAT. Except in a few cases, such as exportation and sales to an investment incentive holder, there is no cash return available to recoup excess input VAT.
Turkish VAT principles include a'reverse-charge VAT system,' which compels resident companies to calculate VAT on payments made to individuals in other countries. The resident entity calculates and pays VAT to the relevant tax agency under this method. This VAT is treated as input VAT by the resident entity and is offset in the same month. Except for the cash flow impact on the former if there is insufficient production VAT to balance the input VAT, this VAT imposes no tax burden on the resident or non-resident business.
VAT is collected at the point of importation as well. The VAT rate is the same as the rate applied to transactions in the country of origin. The worth of the items for customs tax purposes, plus any kind of tax payed at the time of import, plus any expenditures spent until the single administrative document is registered, is the VAT base.
The reduced rate is 1% for deliveries and services specified in List No. I (e.g., agricultural items such as raw cotton, dried hazelnuts, supply and leasing of commodities within the scope of the Finance Leasing Law).
The reduced cost is 8% for deliveries and services specified in List No. II (e.g., essential food stuffs, textiles, books and similar publications).
A Turkish Work Visa allows foreigners to go to Turkey for the purpose of finding work. Foreigners are not permitted to work in Turkey unless they have a work visa and a work permit. Aside from Turkish Republic of Northern Cyprus nationals, all citizens must have a work visa and a work permit to work in Turkey.
In Turkey, applications cannot be accepted unless there is a firm employment offer.
The application must be submitted to the Turkish embassy or consulate in the foreigner's home country. The new employer must provide supplementary paperwork to the Turkish Ministry of Labour and Social Security within ten days after filing the application (MLSS).
In Turkey, an employment contract may be created orally, however it is highly advised that it be in writing. If the contract is for longer than one year, it must be in writing. If a business company headquartered in Turkey is a party to the contract and the contract will be executed in Turkey, written contracts must be in Turkish. A written contract does not have to take any particular form, but the following clauses must either be included in the written contract or revealed to the employee in writing within two months of the commencement of employment:
Working conditions for employees
Working hours might be daily or weekly.
Pay and any additional remuneration received by the employee, as well as the intervals at which they will be received
Contract duration
Contract termination terms and conditions
There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.
Turkish Lira
Before beginning the process of establishing a Turkey subsidiary, many significant decisions must be made. To begin, we suggest looking at numerous locations in Turkey for your physical office. Distinct locations or localities may have different Turkey subsidiary laws, which influence how simple or difficult it is to incorporate. Choosing the proper city can help you get off to a good start and may provide better prices and availability.
The next step is to investigate the various entities that may be used in the Turkey subsidiary formation procedure. The commercial law of the nation provides for five alternative structures, including a joint stock company, a limited liability company (LLC), a collective business, a partnership by shares, and a corporate association. Many businesses adopt the LLC form; doing so will shield your parent and subsidiary from each other's acts.
The following are the processes to establishing your Turkey subsidiary as an LLC:
1. Articles of association must be submitted for both the parent firm and the new organization.
2. Making copies of passports for all of the subsidiary's management
3. Signing a statement from the managers indicating their acceptance of their new roles
4. Purchasing commercial books via the agent of the subsidiary
5. Opening a local bank account and making a minimum share capital deposit
6. All papers must be notarized and submitted to the Turkish Trade Register.
Turkey's subsidiary laws may vary depending on the entity you choose. For example, in order to be formed, an LLC must have a minimum share capital of 10,000 Turkish Lira. To register the corporation, you'll also need at least one founder or shareholder, who might be a natural person or a legal entity. Shareholders' liability is restricted dependent on how much they contribute.
There are no constraints on the number of stockholders, but there are no restrictions on their nationality. LLCs will also need the appointment of one or more managers by the chairman of the board. Board members are not required to attend meetings in person and may do so remotely if they do not reside in Turkey. Because LLCs enjoy many of the same liberties as sole proprietorships, you'll need to follow the country's accounting rules, including yearly financial disclosures.
