Can Foreigners Who Establish a Company in Turkey Obtain Residence and Work Permits?

General Overview

Turkey is among the countries where foreign investors can establish companies and carry out commercial activities.

Citizens of foreign countries, provided that they fulfil the conditions set out in the relevant legislation, can establish limited liability or joint stock companies in Turkey or become shareholders in existing companies. However, the completion of company formation does not automatically grant the foreign person the right to reside or work in Turkey.

For this reason, the legal distinction between a foreigner being a shareholder in a company and actually working in Turkey must be drawn correctly.

Can Foreign Nationals Establish a Company in Turkey?

Under the Foreign Direct Investment Law No. 4875 and the Turkish Commercial Code No. 6102, it is possible for foreigners to establish companies in Turkey. As a general rule, foreign investors may benefit from the same company formation opportunities granted to Turkish citizens. A foreign person may establish a single-shareholder limited liability company or become a shareholder in a joint stock company. However, the management duties the foreigner will assume after the formation of the company and their actual activities in Turkey are assessed separately in terms of the work permit.

Does Establishing a Company Provide a Residence Permit?

Establishing a company in Turkey does not automatically result in the foreigner being granted a residence permit. The types of residence permits and the conditions relating to them are regulated separately under the Law on Foreigners and International Protection No. 6458. Foreigners who are in Turkey for the purpose of establishing commercial connections or setting up a business may, under certain conditions, apply for a short-term residence permit. However, the mere existence of a shareholding in a company may not be sufficient for the application to be accepted. The foreigner's purpose of being in Turkey, the length of stay, the documents, and the relevant administrative requirements are examined together. The establishment of the company and the granting of a residence permit are separate legal procedures.

Does a Foreign Shareholder Need to Obtain a Work Permit?

Pursuant to the International Labour Force Law No. 6735, foreigners who will work in Turkey must, as a rule, hold a work permit or fall within the scope of a work permit exemption. However, the situation of every foreign shareholder is not the same. For example, a foreign shareholder holding the title of manager in a limited liability company and a foreign shareholder who only contributes capital and has no management duties may be in different legal positions. Similarly, the situation of a foreigner who assumes membership of the board of directors in a joint stock company must be distinguished from that of a foreigner who is merely a shareholder.

For this reason, the work permit requirement must be determined according to the type of company and the foreigner's duties within the company.

Capital and Employment Criteria for Foreign Shareholders

The work permit assessment criteria determined by the Ministry of Labour and Social Security set out financial adequacy and employment requirements for foreign shareholders.

As of October 2026, within the framework of the general criteria applied to foreign shareholders in workplaces subject to balance sheet accounting, the following requirements are of importance:

• The paid-in capital of the company must be at least TRY 500,000,
• The capital amount of the foreign shareholder must be at least TRY 500,000,
• The foreigner's share in the company must be at least 20%,
• At least five Turkish citizens must be employed at the workplace.

With respect to the employment of five Turkish citizens, the first work permit may be issued with an annotation subject to certain conditions, and the employment obligation may be applied from the seventh month of the first permit period.

In addition, it is provided that certain capital and employment criteria do not apply to foreign shareholders holding a capital share of USD 100,000 or more.

These criteria are general rules, and different assessments may be made depending on the foreigner's status, the field of activity of the workplace, and the exceptions provided for in the legislation.

Is It Mandatory to Be in Turkey to Establish a Company?

It is not mandatory in every case for foreigners to be physically present in Turkey in order to establish a company there.

The necessary legal and commercial transactions may be carried out through a duly executed power of attorney. However, the possibility of establishing a company through a representative and the foreigner's ability to actually work in Turkey are different matters. The registration of the company in the trade registry does not mean that the foreigner has been granted a work permit.

What Happens If the Work Permit Application Is Rejected After the Company Is Established?

The fact that the company has been established does not mean that the work permit application will necessarily result in a positive outcome. When assessing a work permit application, the financial adequacy of the company, its employment situation, its field of activity, and the legal status of the foreigner may be examined. If the application is rejected, administrative objection and judicial remedies may be considered depending on the reasoning of the decision.

Nevertheless, the refusal to grant a work permit does not automatically terminate the legal personality of the established company.

Conclusion

Foreigners wishing to establish a company in Turkey must assess company law, the law on foreigners, and work permit legislation together. Although company formation and residence and work permit procedures are independent legal procedures, in practice they can directly affect one another.

In particular, assessing the capital structure of the company, the duties of the foreign shareholder, and the employment obligations at the formation stage will help prevent legal problems that may be encountered in subsequent processes.