In Istanbul, a restaurant for the most disadvantaged

A restaurant opens for the most disadvantaged in Istanbul. In Turkey, where inflation is at historic highs, more and more people are struggling to make ends meet and eat properly. The municipality of Istanbul, led for three years by opponent Ekrem Imamoglu, has just opened its first restaurant in Istanbul for the most disadvantaged. Balanced meals served at unbeatable prices. The project, set to expand rapidly, is already meeting with great success.

“The menu of the day: meat and eggplant in the oven, bulgur, chicken soup, yogurt with garlic and dill. I tasted everything, I love it! “A single menu, four courses, all for 29 Turkish liras, or 1.60 euros, not even the price of a soup in any other restaurant in Istanbul. Here, it is the town hall that manages and serves 500 meals a day in two rooms with 80 seats, filled from noon to 8 p.m.

Promise of Ekrem Imamoglu, the opposition mayor elected in June 2019, this municipal restaurant in Istanbul has taken a long time to see the light of day, but it comes at the right time. With an official inflation rate approaching 80%, it has been nearly 25 years since the purchasing power of Turks has declined so much.

This canteen-like place is aimed at Istanbul residents who need it most: students, unemployed or low-wage workers, and retirees. Like Nevin and Fatma, in their sixties, who come to eat here four times a week. “Only 29 pounds! At home, I couldn’t cook the same meal for that price. “says Nevin. “It’s become so hard to make ends meet. Between the bills, the shopping,” adds Fatma.

“In stores, prices are increasing every day! Labels change daily! “, resumes Nevin. “Before, bulgur was the cheapest product. Today, it’s luxury,” says the other. “And yet, according to those who lead us, everything is fine, life is not so expensive. But let them come and see how we live! Nevin is still indignant. Istanbul is the most populated and expensive city in the country.

The restaurant in Istanbul only employs women, in a country where less than a third of them work. Istanbul City Hall plans to open ten before the end of the year.

“We know very well that real inflation is twice as high as the official figure because we experience it on a daily basis and because it is the conclusion of independent economists, explains Murat Yazici, the deputy secretary general. Our constituents are finding it increasingly difficult to eat healthily, and even to eat at all. We do not claim to solve the problem of poverty with a few restaurants, for that it would be necessary to return to a correct management of the economy. But we are doing what we can to help as many people as possible. »

The town hall fears, however, that the government will try to prevent its project, as it has done in the past with other initiatives in favor of the most deprived. As inflation stokes discontent, President Erdogan takes a dim view of anything that can bolster the popularity of opposition mayors, including that of Ekrem Imamoglu, one of his potential rivals in the 2023 elections.

The role of banks in Turkey

Commercial banks in Turkey, the ones we turn to when we need to open a bank account or take out a loan, borrow money directly from the central bank to meet their most immediate financial needs.

The central bank lends money to commercial banks in Turkey, and commercial banks lend money to households and businesses to support growth.

When a commercial bank repays its debt to the central bank, it has to pay an interest rate. The central bank therefore has the power to set its own interest rates, which in turn determines the price of money.

If the central bank in Turkey imposes higher rates on commercial banks, the latter in turn increase the rates they offer to households and businesses that need to borrow to invest.

As a result, home loans, consumer loans, credit cards are more expensive and households are becoming more reluctant to approach financing organizations. Companies, which need banks in Turkey for their future investments, are beginning to think twice before acting. Hence the slowdown in the economy.

The tightening of financial conditions inevitably leads to a drop in consumption in the majority of economic sectors. When the demand for goods and services decreases, their prices tend to fall.

This is exactly what central banks in Turkey intend to do: cut spending to curb inflation.

But the Turkish central bank, which is also officially independent of the executive power, follows a completely different model to fight against inflation.

Erdogan’s new business model
To stem this decline, the Turkish president embarked in 2018 on what he called a “new economic model”.

It’s about putting aside rising inflation and lowering interest rates to stimulate economic growth.

“We are going to cut interest rates and we are already cutting them. Know that inflation will also go down, it will even go down more”, this sentence pronounced by the Turkish president last January, illustrates well his economic theory that he has been repeating for several years: interest is the cause, and inflation the consequence.

In Turkey, growth was mainly linked to massive investments heavily dependent on major constructions: Istanbul airport, the third Bosphorus bridge, the Canakkale bridge…, all these major projects that cost billions of dollars were financed by banks in Turkey.

At the same time, like many countries, Turkish growth is also supported by household consumption.

This monetary policy, defended by Mr. Erdogan, aims to stimulate growth, increase the competitiveness of export products and facilitate household access to credit.

Since 2018, the Turkish Central Bank has increased its key rates to curb the depreciation of the Turkish lira. But each decision in favor of a raise ended in the dismissal of the president of the bank.

Three central bank bosses have been fired by President Erdogan since 2018.

Turkey is “a safe country for Israeli”

The Turkish Foreign Ministry said on Tuesday that Turkey was “a safe country”, thus responding indirectly to the Israeli authorities who called on their nationals to leave the country for fear of Iranian attacks.

“Some countries have issued warnings to their nationals in Turkey (…) Turkey is a safe country and continues to fight terrorism inside and outside its borders,” the ministry said in a statement, without ever quote Israel. According to Ankara, the calls to leave Turkey are linked to “international developments”. “The relevant authorities are taking all kinds of necessary security measures within the framework of counter-terrorism cooperation mechanisms,” the ministry added.

Tehran announced on Tuesday that Iranian Foreign Minister Hossein Amir-Abdollahian discussed “the need to continue the existing consultations between the two countries” during a phone call on Tuesday with his Turkish counterpart Mevlut Cavusoglu. Israeli Foreign Minister Yair Lapid on Monday called on Israeli nationals in Turkey to leave the country “as soon as possible” for fear of Iranian attacks. The Israeli press has reported on attempted attacks against Israelis in Turkey, citing sources who requested anonymity.

These attacks would have been thwarted thanks to a collaboration between Israeli and Turkish security services, the two countries having strengthened their relations in recent months. “I would like to thank the Turkish government for its efforts to protect the lives of Israeli citizens,” Lapid said.

As a reminder, the Israeli Foreign Minister, Yaïr Lapid, called on Monday, June 13, his nationals who are in Turkey to leave this country “as soon as possible” for fear of Iranian attacks. “Following a series of attempted Iranian terrorist attacks in recent weeks against Israelis vacationing in Istanbul, we call on Israelis not to fly to Istanbul and, (…) if you are already in Istanbul , return to Israel as soon as possible,” Lapid said on Twitter.

In recent weeks, the Israeli press has reported on attempted attacks against Israelis in Turkey, citing sources who requested anonymity. These attacks would have been thwarted thanks to a collaboration between Israeli and Turkish security services, the two countries having strengthened their relations in recent months.

Turkey: an increasingly unsustainable economic policy

The economic situation in Turkey is becoming increasingly tense. By dint of wanting to grow GDP at all costs, the country led by Recep Tayyip Erdogan has entered an inflationary spiral from which it will find it difficult to emerge. Prices have soared by more than 60% in one year. The accumulation of deficits makes foreign investors very nervous.

Turkey has changed a lot in the minds of international investors. The country led by Recep Tayyip Erdogan has accumulated economic shocks in recent years. First there was, in the summer of 2018, the tensions between the autocrat and his American alter ego, Donald Trump, which had prompted investors to sell their Turkish liras, then the Covid, which caused receipts to plunge. tourism in the country.

But that’s not all. If the country has resisted the effects of the pandemic rather well, political choices have greatly reinforced the difficulties of the post-Covid period. As inflation picked up a year ago, central banks in most emerging countries began raising interest rates to stem rising prices.

President Erdogan did not see things that way. He sacked the governor of the central bank and told his successor to cut rates to revive growth. They have fallen 500 basis points in three months and have not budged since December. Turkey being a production base for many European industrialists and exporting a lot to the Old Continent, lowering the rates should facilitate the financing of exporters and major works.

Economic situation in Turkey : An overheated economy

This policy allowed GDP to grow by 11% last year, after avoiding recession in 2020. But the economy is overheating. Capital outflows accelerated last autumn, the pound lost almost half of its value against the euro and the dollar, and inflation has now reached 61% over one year! In response, the government raised the minimum wage by 50% at the start of the year. Necessary but insufficient to sustain consumption.

Especially since Turkey is now facing another difficulty: the war in Ukraine is clearly weakening its economy. The conflict has pushed up the price of raw materials, especially wheat and oil, of which the country is a major importer. This will mechanically increase the current account deficit, even though investors are reluctant to finance the economy.

By dint of wanting to grow the GDP at all costs, the deficits have widened and have once again become a source of concern. Goldman Sachs economists expect the current account deficit to reach 4% of GDP this year. An “optimistic” estimate by their own admission, especially if commodity prices do not fall, the country being dependent on Russian and Ukrainian wheat.

Scope Ratings is much more pessimistic and anticipates a current account deficit of 8% of GDP. The rating agency is counting on a slowdown in growth to 2.3% this year and considers that “Turkey’s current trajectory is untenable”. For her, “Turkey’s unsustainable economic policies, spiraling inflation and currency depreciation increase the risk of deeper balance of payments, financial and political crises. »

The government could decide to require Turkish exporters to exchange 40% of their foreign currency in pounds, against 25% currently, according to the Bloomberg agency. A kind of capital control that does not say its name.

How long can this economic crisis in Turkey last?

Turkey wants to conquer space… with a kebab

A Kebab in space ! A small step for a restaurateur, but a giant leap for Turkish gastronomy?

In recent years, we have been witnessing a new space race, more than half a century after the Cold War. But behind the United States which dominates their subject and China which is progressing at a dizzying speed, some have to be content with more modest projects. This is the case of Turkey, where a restaurateur has set himself a rather comical objective: to send the most famous of local specialties, the kebab, as high as possible in the atmosphere… and possibly in space!

The country only entered the space race very recently. The Turkish Space Agency is still very young since it was founded in 2018. But that does not prevent it from being ambitious; last year, the Daily Sabah newspaper relayed the words of President Erdogan who announced a real space program in good and due form. The objective: to allow Turkey to join the very closed circle of nations that have left our earthly cradle.

The program is advancing at high speed and is among the most promising at present. But the first concrete results are not expected before 2023 at the earliest; it is on this date that the country plans to send a first mission to the Moon. And by 2030, it is the first Turkish rover in history that could leave to explore our satellite.

Instead of patiently waiting for this very exciting deadline, it was an individual with an unexpected profile who took over on a very different scale, and with a particularly unusual project. Interesting Engineering has indeed spotted a funny story told by the local newspaper Daily Sabah. Yaşar Aydın, a local restaurateur, wants to take the gems of Turkish gastronomy to new heights — literally.

A stratospheric kebab as a gastronomic ambassador

To do this, he teamed up with entrepreneur and aerospace student İdris Albayrak. The latter founded Alba Loon Space, a startup that intends to produce balloons in the service of atmospheric and space science.

Together, they designed an airtight box that they attached to a helium balloon equipped with cameras and a GPS tracker. Their goal: to send it as high as possible with a kebab on board. They waited for a symbolic date to launch, and the opportunity arose on April 12.

This is an important date in the history of aerospace. Indeed, this marks the anniversary of the very first space flight in history, carried out by the legendary Russian cosmonaut Yuri Gagarin aboard the famous Vostok. Aydın wished to honor him in his own way; and he was not disappointed since the most “flying” kebab in history reached 38 kilometers in altitude! Not sure if it stayed hot for very long.

Inevitably, the balloon ended up bursting; the box therefore plunged straight into the sea below. But he was not lost for all that; after recovering it thanks to the GPS tracker, Aydın and his team realized that the fish had taken advantage of it. And this teaser took the opportunity to joke about the outcome of the “mission”. “I believe the aliens sent him back because he was too peppery. I will send a less spicy kebab next time,” he joked.

And the formula is not chosen at random. Indeed, this “launch” was the first of what promises to be a funny soap opera. Because if the Aydın flat was still far from reaching the Kármán Line, the “official” limit of space located arbitrarily at 100km, it does not intend to stop there. Interesting Engineering spotted and translated another interview, this time in the daily Cumhuriyet, where Aydın clearly announces his intention to do even better.

“We managed to send this kebab to a certain level of the atmosphere, but we may manage to go even higher in the future,” he enthuses. Will he achieve his goals one day? Nothing is impossible in an age where entrepreneurs can send cars into space on a whim (see our article). And if we rely on the automatic translation of the dialogues (to be taken with a grain of salt, of course), this indeed seems to be its final objective. With any luck, the rise of the Turkish space program may allow Aydın to achieve his oh so unusual goal of officially claiming the first extraterrestrial kebab.

War in Ukraine : While waiting to sell Chelsea, Abramovich would negotiate to buy a club in Turkey

Roman Abramovich, owner of Chelsea riddled with sanctions for his closeness to Vladimir Putin, is negotiating to offer himself a new club in Turkey: Göztepe, according to the Fanatik newspaper.

A new club for Roman Abramovich? According to these news (Turkish newspaper Fanatik), the Russian businessman and his representatives have started negotiations to buy the Turkish club Göztepe, currently 18th in the Süper Lig (Turkish D1). Mehmet Sepil, the president and majority shareholder of the club recently announced his resignation while retaining his functions until the end of the season. Time to find a buyer. And this one could therefore be Abramovich, billionaire and owner of Chelsea since 2003.

According to Fanatik, Abramovich and Sepil were put in touch by a Turkish businessman. The two men should soon meet physically to discuss this takeover of the club based in Izmir where the former Toulousain, François Moubandje, plays in particular.

Roman Abramovich is one of many Russian oligarchs targeted by sanctions from the European Union and the British government for his closeness to Vladimir Putin, Russian President who started the war in Ukraine on February 24.

Abramovich and Turkey : Sale of Chelsea not yet finalized

He had put Chelsea up for sale before the announcement of these very strict measures, such as the freezing of his assets. This heavily impacts the Blues, who now have a special license prohibiting them from selling tickets, merchandise, signing new contracts and exceeding a limited travel budget. According to the English press, the race to buy the club is intensifying and a shortlist of contenders should soon be released.

In mid-March, Abramovich was spotted in Tel Aviv on a stopover in Turkey, where the British press suspects he had gone to hide his very expensive yachts, where they would be protected from seizure by Europe. . His bond with Turkey could now grow stronger with this investment in football.

Blacklisted by the British government and the European Union because of his links with Vladimir Putin, will Roman Abramovich buy the Turkish club Göztepe? While his yacht “Eclipse” has just moored in Turkey, the Turkish daily Fanatik reveals that official talks have started between Mehmet Sepil, the current owner of the 18th in the Süper Lig, and representatives of the Russian billionaire, who has put in Chelsea sale a few days ago.

According to this source, a Turkish businessman is the link between the two parties and should meet Mehmet Sepil soon. The latter, who owns the majority of the shares of the Göztepe club, recently announced his departure from the Turkish club at the end of the season. A windfall for Abramovich, whose assets are frozen in Britain and the European Union, but not in Turkey?

Turkey in Africa: an all-round presence

What is the goal of Turkey in Africa ?

Analysis – Turkish President Recep Tayyip Erdogan is making another visit to the African continent this week. Angola, Nigeria and Togo: three stages for what constitutes his fifteenth tour of Africa, as Prime Minister then Head of State? Africa, a priority stake for the Turkish authorities? Interview with Jean Marcou, professor at Sciences-Po Grenoble and associate researcher at the French Institute of Anatolian Studies.

PAYROLL TURKEY JOURNALIST : Not a year goes by without Recep Tayyip Erdogan touring Africa. He has already visited around thirty countries. In two months, moreover, his country will host the 3rd Turkey-Africa summit. The African continent seems to be a priority today in the Turkish influence strategy.

Jean Montagné: For twenty years now, Turkey’s foreign policy has turned towards Africa. This was already the case even before the AKP took power in 2002. But since this party has been in power, there have been tours every year, or at least high-level visits by Turkish leaders to the countries. African countries. This first materialized in a considerable growth in economic exchanges, then in ties forged with a very large number of countries where Turkey previously did not even have diplomatic representation. Turkey opened its 43rd African Embassy in April 2021 in Togo. Conversely, we have also observed the development of the establishment of diplomatic representations in Ankara of African countries. One of the concrete illustrations of this development of economic and diplomatic relations is notably the omnipresence of Turkish Airlines, which has become one of the largest companies in the world. What we have also observed is a development of cultural and religious relations, even humanitarian ones. Initially, via the Gülen movement, then subsequently, for six years now, with a takeover of these schools. We also observe the establishment of mosques, the development of charitable works, humanitarian organizations which are often religious organizations. This very dense African policy initially concerned rather the eastern part of the continent, the Horn of Africa, with Somalia, but also now West Africa, as we can see with this visit today to Angola. , Nigeria and Togo. This presence, finally, is also of a military nature. On the African continent, as it was able to do also in Syria obviously, but also in the Caucasus to support Azerbaijan, Turkey intervened in Libya. Turkey has deployed drones which are now a military production which interests many countries, I am thinking of Tunisia or Morocco. Finally, beyond the supply of military equipment, there are also bases. This is already the case in Somalia, but there is talk of a military establishment of Turkey in Chad, even in other countries. It is a policy that can be described as bottom-up.

PAYROLL TURKEY JOURNALIST : We understand that this is an all-out presence of Turkey on the African continent. But what is the goal?

Jean Montagné: I think that on the one hand, there is an economic dimension because Turkey needs to find new markets. The development of its influence in Africa at the beginning, was strongly guided by economic and commercial objectives. But beyond that, I think there is also a policy like the strategy of Recep Tayyip Erdogan, that is to say a policy of new regional powers. These regional powers are now trying to have an influence that goes beyond even their immediate environment, ie Europe and the Middle East. They want to gain a foothold on other continents. Africa is the first among them but we have seen Turkey also very present in Latin America, or in Asian countries such as Malaysia, India, Indonesia or Pakistan. Turkey is a country that is trying to globalize its foreign policy.

PAYROLL TURKEY JOURNALIST : How does this Turkish strategy in Africa differ from the much talked about Chinese and Russian strategies?

Jean Montagné: I think that the African continent has become a field of expansion for all these powers which are in search of a renewal or a development of their power. It is obviously on the economic level. For years, China has become Africa’s first trading partner, competing with countries that were very established such as, for example, France. Russia is on the rise again, especially in North Africa, but now also in sub-Saharan Africa. But with Turkey, we can see, in a way, an export of Middle Eastern antagonisms to Africa since we have seen, especially in East Africa and in the Horn, Turkey, often financially supported by Qatar, challenge presences from Egypt, Saudi Arabia and the United Arab Emirates. We have seen it in Syria, but we have also seen it in Sudan. We see it in Somalia, we see it in Ethiopia. So there is a kind of continuation of Middle Eastern geopolitics in Africa.

Turkey in Africa : The question of the Gülen schools

Founded by Fethullah Gülen, a preacher once close to Turkish power, the Gülen school network has grown in Africa. But in July 2016, the man was accused of being behind the attempted coup in Turkey. It is disgrace and Erdogan is working to close the Gülen schools one by one. “They have played a very important role with the development of English-speaking Turkish schools in the East of the African continent and French-speaking Turkish schools in the West,” recalls Jean Marcou. But since 2016, Turkey has sought to regain control of this presence via a religious foundation, the Maarif Foundation. Added to this is a fairly strong pressure, because despite everything, some Gülen schools have managed to survive “.

This question of the Gülen schools could have been a subject of tension between Turkey and Nigeria which is reluctant to close them. “It all depends on the influence, the strength of the country, underlines Jean Marcou. A country like Nigeria, which is one of the leading African economic powers, precisely has the means to negotiate on an equal footing with Turkey. This has not been the case in other countries where Gülen schools have not withstood the pressure from Ankara “.

What is an Umbrella Company in Turkey ?

Most people don’t know exactly what is an umbrella company in Turkey and why they are needed, and what they are exactly. The aim of this article to clear up the misunderstandings about these companies.

How an Umbrella Company based in Turkey works

Contractors and freelancers are employed by an umbrella Company. The contractor is then considered an employee of the Umbrella Company based in Turkey. The client will not need to manage the payroll, because this is the job of the Umbrella company in Turkey. Contractors will submit the timesheet and expenses every month, and then the umbrella company will invoice the final client directly. The contractor is considered an employee by the umbrella company, and will gain many benefits of permanent employment, like holiday/sick/maternity pay). In this way, the contractor will gain professional independence.

As a foreign company doing business in Turkey, by using an umbrella company you don’t have to pay taxes and other expenses like insurance contributions. The umbrella company based in Turkey pays these for you. PAYE (Pay as you earn) is done by the Payroll company in Turkey. It is paid with the funds received by the umbrella company. Payroll company in Turkey will obtain fees paid by the client. The same day the invoices are paid, the employee will get his/her salary and the payslip which details their income. By working under an umbrella company, employees have many advantages. Work related expenses are paid, and so the take-home pay is automatically increased. Holiday income is paid. The only things employees have to do is to submit expenses and timesheets, then just wait to be paid. All the paper work is done by Payroll company in Turkey. The best method of contracting in Turkey is choosing an umbrella company.

The advantages of Payroll services at MPS Ltd Consulting.

A team at your service.

Your legal and administrative advantages

  • With Umbrella Company in Turkey, you start your professional activity without the need to set up a legal structure. There is no need to register and know about all the formalities of setting up a business.
  • You can offer training services by benefiting from our activity declaration number (MPS Ltd Payroll Company in Turkey training organisation) and opt for the tax regime (subject or not subject to VAT) adapted to your customers.
  • You benefit from a strong administrative and legal framework: reduced formalities, online and secure dashboards and professional liability insurance.
  • Our administrative services relieves you of the management of invoicing and collection, leaving you to focus on your core business.

Your benefits with Umbrella Company in Turkey

  • With our services for Payroll Company in Turkey, you benefit from employee status: social protection (health, retirement and provident insurance) and maintenance of employment centre rights.
  • You decide how to manage your time, based on your professional and personal goals.

Your relationship advantages

  • With Turkey Payroll MPS Ltd you are supported by truly personalised, individual and collective support, tailored to your needs.
  • You are part of a network, an essential asset for the development of your activity and the main source of business. You no longer experience the isolation of a freelancer.

You can try out your business activity without risk or commitment

  • Free membership
  • Quick and easy to set up: You can start a job within 48 hours.
  • No fees or contributions in the event of a period without billing.
  • No turnover limit.
  • No surprise: You know from the start of your job, the amount of expenses and the expected income.
  • No minimum engagement period with our Payroll Company in Turkey

You benefit from a secure status, as do your customers

You are able to reassure your customers that you are a professional and you strengthen your image as an expert. That is an advantage of our Umbrella Company based in Turkey.

  • You provide them with a flexible and secure environment.
  • You give them the assurance of working within a recognised structure, respectful of the legislation in force, both social and legal.
  • You provide them with all the insurance necessary for the performance of your mission.

Myths around Umbrella Companies in Turkey and how they work

Before writing about the myths around umbrella companies in Turkey, it is important to define clearly what an umbrella company is.

As does a recruitment agency, the umbrella company employs agents as contractors or freelancers. A recruitment agency is in touch directly with the umbrella company. Then, a contractor becomes the employee of the umbrella company. The umbrella company will pay salary and taxes, and the contractor will send it information including timesheet and monthly expenses. An umbrella company will invoice its final client directly. The contractor will have the same benefits of an employee working in an normal company.

Unfortunately, many people don’t know how payroll service providers operate. Professional Employer Organisation (PEO) based in Turkey is the best option for companies and contractors wanting to manage their profits successfully.

It is a myth that an umbrella company takes 90% of the salary. This is false information. Umbrella Companies in Turkey are aligned with Turkish laws (employment taxes etc…).

The only way it can affect net salary is the fees taken by the Payroll Company.

Employees working under Umbrella Company will have the same benefits as others in terms of holiday, sick pay, maternity pay etc.

Your MPS Ltd Payroll Turkey Solution

Payroll company is an innovative form of employment. The umbrella company in Turkey links the employee to the client.

Payroll is a halfway between employment and self-employment. The payroll employee can act freely in his/her actions and the completion of his/her jobs. The payroll employee is responsible for negotiating prices and the terms of interventions with the client regarding objectives, fees etc.

He/she has to provide adequate services and report to the payroll company.

Create, test or exercise your activity freely: this is what the umbrella company offers.

Simple and efficient

This solution provides many advantages. It allows you to keep the social protection enjoyed by employees (sickness, maternity, unemployment, retirement, etc.) and to avoid the social, tax and accounting formalities to which entrepreneurs are bound.

You retain complete control over your work. Once the job has been negotiated and granted, you delegate the management of all the administrative tasks to the payroll company. The umbrella company in Turkey collects your fees and pays you a salary based on your net turnover, after the deduction of social charges and a commission for management costs.

Unlike the status of self-employment, payroll does not impose a turnover limit on you.

Tax Guide in Turkey

It is true that out of the OECD member countries, Turkey is very competitive regarding tax rates. Comparing it to international standards, Turkish corporate tax legislation is objective.

Personal income tax : This is subjected to an individual’s net amount of earnings corresponding to this tax.

Corporate income tax : This applies only to corporations. In Turkey, the application of this tax on business profits is 20%. In the past two years, the rate has increased to 22%.

VAT : Three different rates are applied, 1%, 8% and 18%. Goods and services are subject to VAT.

SCT : This means special consumption tax. Four product groups are subject to it: energy, automotive industry and the tobacco/alcohol industries.

Insurance and Banking Tax : All the transactions on these two sectors are subject to tax at 5%.

Stamp duty : This concerns lot of documents such as notes, capital contributions, contracts, banking letters and statements.

Wealth : These taxes concern automotive vehicle, property and gifts.

Real estate tax : Between 0.1% and 0.6%.  Apartments, land and buildings are subject to this tax.

Last but not least, choosing an Umbrella Company in Turkey is the best solution for foreign companies which don’t yet have  any legal structure in this country. Do not hesitate to contact our team if you are looking for further information.

Turkey Payroll and Guideline

You need to know the information below before seeking Payroll in Turkey.

Set up a company in Turkey

A foreign company can have an entity with a payroll service provider in Turkey, without establishing a company. But if you want to set-up an entity, please note that the current exchange rate, the need for investors and existing incentives, makes Turkey one of the best places for investment because of its geographical location.

Turkey’s investor-friendly laws are here to increase foreign investments. More and more, Turkish local law is close to Western countries’ practices.

Foreign Direct Investment Law in Turkey, is based on the principle of equal treatment towards international investors, and this makes it possible to have the same rights and obligations as domestic investors.

The conditions for the process of setting up a company and share transfers in a company are the same for foreign investors as for domestic investors. Foreign investors can set up all types of companies listed under the law. The Turkish Commercial Code, together with the new arrangements to meet international standards, to encourage private capital and IPO activities, corporate governance transparency, providing commercial activities and the investment environment in Turkey, all help to bring it in line with European Union legislation.

Bureaucratic procedures to setting up a company have been removed in Turkey, and the cost of setting up a company has been reduced to a minimum. For company organizations, setup is completed in the same day at the Trade Registry Offices.

Payroll Turkey : Most Common Company Types

Limited company

Incorporated company

Guide

Determination of Company Title

Firstly, the company title to be used for the establishment of the company is determined. The company title must indicate at least one of the fields of activity and include the type of company. For example, a limited company that will work in the fields of tourism and construction should have the title of Xyz Tourism Limited Company, Xyz Construction Limited Company, Xyz Tourism and Construction Limited Company etc.

The company title must receive a distinctive supplement from another previously registered company name. If the fields of activity are different, it does not need to receive an annex. To explain with examples:

If the title of Xyz Turizm İnşaat Limited Şirketi has already been registered by another company, Xyz Otomotiv Turizm Limited Company cannot be registered without a distinguished annex.

If the title of Xyz Tourism Construction Limited Company is registered by another company, Xyz Food Textile Limited Company can be registered without a separate supplement.

If the title of Xyz Turizm İnşaat Limited Şirketi is registered by another company, Xyz Turizm İnşaat Anonim Şirketi cannot be registered without a distinctive supplement.

You should inquire whether the name of the company you intend to use, is already used by another company. If you choose a company title that you cannot use as stated above, your registration application will be rejected. By contacting us, we can investigate on your behalf whether the company title you intend to use is appropriate.

It is possible to use foreign words in the company title, provided that the terms indicating the subject of the business and the type of the company are in Turkish. However, a foreigner must be among the shareholders of the company, and the title must be in accordance with the law, general morality, national and cultural interests. For example: Example Tourism Trade Limited Company may be used as a title.

The use of country names in the title will require the permission of the competent authority of that country.

Likewise, Turkey, Turkish, if passed word tradename companies like National, must be approved by the Board of Ministers.

For example; Xyz Turkey Tourism Limited permission is required for the Council of Ministers of the Company.

If you are looking for information regarding Payroll in Turkey, please check our company payroll services.

Determination of Company Type

The type of company you will set up should be one of the companies included in the Commercial Code. In this article, since we include Limited Company and Joint Stock Companies, we will give an explanation for these two types of companies. If you choose a different type of company, you can contact us to get up-to-date information.

Limited company: Company shareholders and their shares are determined. There may be a minimum of 1 and a maximum of 50 partners. The minimum capital amount is TL 10,000. (The requirement to block at least ¼ of the capital before the establishment of the company has been removed.)

Incorporated company: Company shareholders and their shares are determined. It can be established with minimum 5 and maximum 500 partners. The minimum capital amount is 50.000 TL. Before the establishment of the company, at least ¼ of the capital must be blocked. The remaining capital of the company must be completed within at least 24 months following the registration of the company.

Payroll Turkey and Company Formation

Subsequent transactions are similar for both types of companies.

Company’s address of activity is determined. Company manager and representatives are determined. The company’s articles of association are prepared together with this information. The Articles of Association of the Company are notarised. Trade registered transactions and the main contract are sent over the “Mersis” system. Mersis is a system that enables the transactions to be carried out instantly.

After application through Mersis

  • Company main agreement
  • Notarised signature declaration
  • Photocopy of identity card
  • Photocopy of passport if the partner is a foreign natural person
  • Photocopy of the notarised identity card of company managers

In case the foreign partner is a legal person, the certificate of activity taken from the trade registry of the country in which it is registered (the activity certificate must include the company signature authorities and the current status of the company) the decision of the competent body concerning the name and surname of the natural person representative will take the decision and the letter of assignment.

0.04% of the company’s capital must be paid to the Competition Authority.

Apostille and notarised documents to be signed will be held outside of Turkey, and the parties to the apostille agreement must be approved by the Turkish Consulate. In addition, these documents notarised translation must be done in Turkey.

After the documents are completed, registration application is made to the Trade Registry Office where the company address is located.

As of the date of registration of the Company, the signature circular shall be arranged in the presence of the personnel in the Trade Registry Directorate on behalf of the signature authorities of the company.

After the registration process is completed, the tax registration is opened by applying to the Tax Office where the address is attached, and the tax plate is taken. If the company is to be employed again, registration must be completed at the relevant Social Security Institution.

The books that the company must keep:

The Turkish Commercial Code obliges companies to keep books. During the establishment of the company: Journal, General Ledger, Inventory, Share Book, Board of Directors Decision Book, General Assembly Decision Book are approved by the Trade Registry Directorate.

Further information on the tax and social system in Turkey can be found on the following governmental websites:

https://www.csgb.gov.tr/

http://www.sgk.gov.tr/

Additional information

Liability for company debts

Almost everyone raises the question of whether they will be responsible for the company’s debts. For both companies, the Turkish Commercial Code has adopted the limited liability principle. So; the company is not responsible for the debts of the company, nor is the company responsible for the debts of the partners. However, in limited liability companies, shareholders are responsible for public receivables in proportion to their shares. In the joint stock company, non-members of the board of directors have no responsibility for public debts.

Obligation to work with a lawyer

You must work with a lawyer in joint stock companies whose capital is over 250,000 TL. There is no such obligation for limited companies.

Company establishment costs

The average is between 3,000-4,000 TL and is stated to give you ideas. You can contact us for current costs.

The information mentioned above is specialised. There are no legal obstacles to making your company establishment transactions by yourself. However, while you are focusing on what you will do, we recommend that you work with a lawyer who will represent and guide you through the establishment procedure. 

Finally, what is Payroll ?

Payroll in Turkey services offered by our company is a solution that allows you to reconcile independence and benefits of employee status.

You develop your consultancy, expert and trainer activity (in the field of intellectual services) in complete autonomy and you entrust your PEO company with the management of your assignments and their invoicing.

You benefit from the advantages of the general scheme for employees (health cover, retirement, welfare and unemployment).

Information about Payroll taxes in Turkey

It is from 1st January to 31st December that the tax year runs in Turkey. We do not need necessary a third party if we want to make any tax behalf of a client.

On the 23rd of the month, the monthly income tax contributions are paid in Turkey.

The Withholding Tax and Monthly Premium Service Document is known as the reporting process for employee income tax. Before the 23rd of the month, this paper has to be submitted.

Regarding social security in Turkey, the contributions have to be declared the 23th of the month. These contributions have to be paid before the next month.

Reporting tax in Turkey needs to be done every month.

The registration of new employees is done the day before starting date. Then, it can be filled online on the SSI registration website.

Documentation required for expat:

Passport

Resident Permit

Photo ID

Diploma

Work contract

Application form

Leavers employee

The termination pay date is not specific. Usually it is detailed on the employment contract. A declaration of departure written by an employee is forwarded by the employer to the authorities. It is better if this is done about 10 days after termination.