While not impossible, handling one’s own payroll in Turkey does have a few pitfalls of which foreign business owners should be aware. Several conditions must be met, and many elements are required for corporations to be officially allowed to have employees. For instance, joint-stock companies based in Turkey need government approval to create a branch or legal entity that would enable them to hire Turkish workers.

Here are the main factors to consider when organizing payroll in Turkey as a foreign company and how to circumvent potential complications.

The Right Legal Structure

In order to have employees on the payroll in Turkey, it is necessary to operate under the right legal structure. Hiring personnel is, of course, not the first step. To begin, new companies must submit their notarized memorandum and articles of association to obtain their tax identification number. 25% of the business’ capital should be deposited into a Turkish bank, and another portion into the bank of Halk Bankasi, which is state-owned.

For those business owners who prefer to focus on their core activities and would rather not burden themselves with additional administrative responsibilities, it is possible to outsource payroll in Turkey. An umbrella company, such as Azkan Group, can also hire employees in your name so you do not need to spend time and resources in an effort to comply with Turkish regulations.

How do Umbrella Companies Handle Payroll in Turkey?

One of the main reasons entrusting a PEO with your payroll in Turkey can be so beneficial is that the country’s laws are continually evolving, both due to EU Integration obligations and to internal political developments. Similarly, new incentives are constantly being implemented as part of the government’s initiatives to attract foreign investors. However, these can be complex and highly specific.

This is where umbrella agencies come in. Perfectly acquainted with the various requirements and benefits available based on their particular situation, they are in the ideal position to make informed decisions for foreign investors. They can either act as an external HR department or as a PEO.

In the first case, outsourcing payroll in Turkey ensures that your employees receive their wages in the way they are used to. These experts also see to it that you do not need to dedicate an entire branch of your company to the task. Your on-site team focuses on what it does best, your accounting is simplified and compliant, and you get to save time, thus protecting your investments.

In the case of a PEO, an external agency, such as Azkan Group, hires your workers for you and charges your firm for their services in the form of an invoice. This allows you to do business in Turkey without even having to open a subsidiary.

From employee pay to tax report filing and everything in between, instead of handling legal, administrative and social tasks internally at the risk of complicating your own processes, outsourcing can have a positive impact on your business. An umbrella company could even rent an office space for your Turkish employees, so you will not need to find your own premises.