Foreign natural persons holding shares in a commercial company established in Türkiye do not automatically acquire the right to work by virtue of that shareholding alone. Where the shareholding is coupled with managerial authority within the company, the lawful continuation of the activity is made subject to a separate administrative permit. That permit is granted through the electronic application system, provided that the criteria set by the Ministry of Labour and Social Security are met and the required documents are complete.
In practice, the most frequent uncertainty concerns which shareholder capacity triggers the permit requirement. A shareholder who holds no seat in the management body and the shareholder-manager of a limited liability company are not subject to the same regime; the former falls within the scope of the exemption, whereas the latter may not work without a permit. Failing to draw this distinction correctly at the outset leads both to unnecessary applications and to administrative sanctions for working without a permit.
Below we examine, in turn, the assessment criteria of the permit regime applicable to foreign company shareholders, the domestic and overseas application channels, the documents to be included in the file, the objection and litigation routes available after an unfavourable decision, the timing of the extension application and the financial charges involved.
Assessment Criteria Sought by the Ministry
A favourable outcome depends not only on the personal situation of the foreign national but also on the financial and employment structure of the undertaking to which the application relates. The Ministry assesses the application by considering the individual and the company together.
The criteria sought may be summarised as follows:
- Shareholding and managerial capacity. The foreign national must hold one of the following positions in a company established under the Turkish Commercial Code No. 6102: a manager who is also a shareholder in a limited liability company, a member of the board of directors who is a shareholder in a joint stock company, or a general partner acting as manager in a partnership limited by shares.
- Shareholding ratio and amount. The foreign shareholder applying for the permit must hold a capital share of at least 20%, and the monetary value of that share must not fall below TRY 40,000.
- Financial thresholds of the undertaking. It is sufficient for the company’s paid-in capital to be at least TRY 100,000; where that condition is not met, the gross sales figure must be at least TRY 800,000 or the export figure for the preceding year must be at least USD 250,000.
- Employment of Turkish citizens. As a rule, at least 5 Turkish citizens must be employed at the workplace to which the permit relates. Specifically for foreign company shareholders, this condition is sought in respect of the final six months of the one-year permit granted by the Ministry. Where a permit is sought for more than one foreign national at the same workplace, employment of five persons must additionally be provided for each foreign national after the first permit.
Once all these criteria are satisfied and the documents listed below are submitted in full, the Ministry is in a position to grant the permit.
Shareholder Capacities Requiring a Permit
The work permit requirement is determined by the type of company and by the foreign national’s position in its management. Foreign nationals who serve as manager alongside their capacity as shareholder in a limited liability company, those who are both shareholder and member of the board of directors in a joint stock company, and general partners acting as managers in a partnership limited by shares all fall within this scope. A foreign national holding one of these three positions must obtain a permit before commencing activity.
Shareholders Outside the Permit Requirement
By contrast, two groups of shareholders are exempt from the permit requirement. The first comprises foreign nationals who are members of the board of directors of a joint stock company but who do not reside in Türkiye. The second comprises foreign nationals who hold shares in company types other than joint stock companies without holding managerial capacity.
These persons are expected to pursue a work permit exemption instead of a permit. The exemption certificate is issued by the Ministry and, for the period of its validity, allows the foreign shareholder to work and reside in Türkiye without obtaining a separate work permit.
Article 48(ç) of the Implementing Regulation determines the scope and duration of the exemption: an exemption may be obtained for a maximum of 3 months for members of the board of directors of joint stock companies who do not reside in Türkiye, for shareholders of other companies who hold no managerial capacity, and for foreign nationals who, although not shareholders in such companies, hold the highest-level authority to represent and bind the company and will work in Türkiye.
The operation of the exemption application, who may pursue this route and the other points to be observed in the process are addressed in detail in a separate note on the work permit exemption.
The Channel for the Application
The channel through which the application is pursued varies according to where the foreign national is located at the time of the application and the residence document held. Foreign nationals present in Türkiye use the electronic permit system, whereas those abroad first apply for a work visa to a foreign mission of the Republic of Türkiye.
The essential condition for applications made from within the country is that the foreign national holds a residence permit with at least 6 months of validity remaining. Foreign nationals meeting this condition may open a file directly through the e-permit system using their foreign identification number beginning with “99”.
Where the foreign national is abroad or does not hold a valid residence document with more than six months remaining, the process operates in two stages. At the first stage, an application is made to the foreign mission in order to obtain a reference number; at the second stage, the application in the e-permit system is completed using that number.
The stages of the work permit application, how the process advances and the technical points to be observed are examined comprehensively in the note on the foreign work permit.
Documents to Be Included in the Application File
Which documents are to be submitted is determined by the Ministry. The documents required in the file of a foreign company shareholder are as follows:
- The Turkish Trade Registry Gazette showing the company’s current capital structure and shareholding distribution
- The balance sheet and profit and loss statement for the most recent year, approved by the tax office or by a sworn certified public accountant
- A copy of the diploma or provisional graduation certificate; its Turkish translation must be certified by a sworn translator or by the official authorities
- A copy of the passport
These documents are scanned and uploaded to the e-permit automation system. Uploading them with an electronic signature is a procedural condition frequently overlooked in practice, yet decisive as to whether the application is taken into processing.
Where the passport is not issued in Latin characters, a translation certified by a sworn translator or an official authority must also be placed in the file. Furthermore, applications made with passports, or documents in lieu of a passport, having less than 60 days of validity remaining as at the date of application are not taken into processing.
Refusal Decision, Objection and Action for Annulment
Where one or more of the grounds for refusal listed in the International Labour Force Act materialise in the particular case, the application is refused. In addition, failure to carry out procedural steps properly, or failure to meet the criteria set by the Ministry, is in itself sufficient to result in refusal.
Two legal routes are available following an unfavourable decision: administrative objection and an action for annulment. The order in which these two routes are taken matters. If the objection route is taken first, the period for bringing an action for annulment is suspended and, should the objection also be refused, the litigation route remains open. If, by contrast, an action for annulment is brought directly, it is no longer possible to revert to the administrative objection route.
The objection must be directed to the Ministry through the e-permit system within 30 days of the date on which the refusal decision was notified to the foreign national. At the objection stage, a petition setting out the contested points with legal reasoning must be prepared, the information and documents supporting those grounds must be annexed to the petition, and the file must be uploaded to the system bearing an electronic signature.
The action for annulment, in turn, is brought before the administrative court within 60 days beginning on the day following notification of the decision. Where an objection has previously been lodged, this period is suspended. By way of example, in a file where an objection was lodged on the 25th day following notification, 35 days remain in which to bring the action, running from the day following notification of the decision given on the objection.
All the grounds for refusal and the legal routes available against an unfavourable decision are assessed more extensively in the note on the refusal of a work permit application.
Reapplying After a Refusal
The fact that an application has been refused does not preclude a fresh request. However, the success of the new application depends on the deficiency or error that caused the refusal of the earlier file having been remedied. So long as the same defect persists, the new application will also be refused.
Extension of the Permit and Refusal of the Extension Request
An extension request may be made once 60 days remain until the expiry of the existing permit and must in any event be entered into the system before the permit expires. Extension requests submitted after this window has been missed are not taken into processing. The application is directed to the Ministry through the e-work system, as with the initial permit.
An extension request may likewise be refused; failure to comply with procedural rules or failure to meet the Ministry’s assessment criteria are the typical grounds. In the event of refusal, the parties concerned again have the options of administrative objection and an action for annulment. The periods and operation of these two routes are the same as the scheme explained above in respect of the refusal decision.
Where an extension application has been made within the prescribed period, the foreign shareholder may continue the activity at the same workplace for no more than 90 days from the date on which the permit expired, provided that there is no change in the nature of the work.
The general framework of extension is set out here; all the details of the procedure are addressed in the note on the extension of a work permit.
Fees and Other Financial Charges
The fee payable is not fixed; it varies according to the type of permit and the period for which it is granted. In this respect, whether the permit is a fixed-term permit, an indefinite permit or an independent work permit is decisive. In addition to the fee items, a valuable paper charge of TRY 356 for 2023 must also be paid.
Please note: the fee and the valuable paper charge must be paid within 30 days of the date of notification. If payment is not completed within that period, the application is removed from processing.
Time Limit for Concluding the Application
The Ministry decides applications that have been made in due form and whose documents are complete within 30 days at the latest.
Conclusion
Success in the work permit process for foreign company shareholders is largely determined at the preparation stage. Complete documentation, satisfaction of the Ministry’s employment and capital criteria and compliance with procedural rules are the preconditions of a favourable outcome; a shortcoming in any one of these elements results in refusal of the application. In order to avoid prolonging the process, or failing to obtain the permit at all, it is advisable to plan the application with a lawyer experienced in this field.
Independent Legal Assessment
A significant proportion of disputes in this field arise well before the permit application, at the stage where the company’s incorporation and shareholding structure is designed. Where the capital share has been set so as to fall below the 20% threshold, or where the foreign national has not been given managerial authority, there is a problem that a subsequent permit application cannot cure. Similarly, where it is overlooked that the employment condition is sought for the final six months of the permit, an unexpected risk of refusal arises at the extension stage.
At Independent Legal, when assessing files we do not regard the permit process as a documentary formality separate from the company’s commercial structure. When a specific application is being planned, we recommend that the following points in particular be clarified in advance:
- Determining whether the foreign national’s position in the company requires a permit, on the basis of managerial capacity and company type
- Checking the shareholding ratio and the share amount together, against the articles of association and the registry records
- Establishing at the outset which of the paid-in capital, gross sales and export thresholds can be met in the particular case
- Calculating the five-person employment condition with its multiplier effect at workplaces where permits are sought for more than one foreign national
- Verifying the remaining validity of the passport and of the residence permit as at the date of application
- Diarising the objection and litigation periods from the notification date, against the possibility of refusal
Independent Legal provides legal support throughout the entire process for work permit applications by foreign investors and company shareholders, from the exemption assessment to the conduct of administrative and judicial remedies against a refusal decision.