Turkey is rapidly becoming a hub for international business expansion. With its strategic location, skilled workforce, and competitive labor costs, the country attracts global companies seeking growth. However, hiring foreign talent in Turkey can be complex. Strict labor laws, tax regulations, and work permit requirements create significant barriers for both employers and professionals.
This is where EOR and umbrella company Turkey solutions come into play. Both models simplify the hiring process, ensure compliance, and provide businesses with a faster way to access international talent. In this article, we’ll explore how Employer of Record (EOR) and umbrella companies work, their benefits, and why they are essential tools for foreign hiring in Turkey.
The Challenges of Hiring Foreign Talent in Turkey
Employers looking to hire foreign professionals in Turkey face several challenges:
- Work permits: Foreign nationals cannot work without a valid permit, usually tied to an employer.
- Salary thresholds: Turkish law requires minimum salaries for foreign employees, often higher than for locals.
- Complex compliance: Employers must follow strict labor laws covering contracts, working hours, and benefits.
- Taxation and SGK: Companies must deduct income tax and contribute to Turkey’s social security system (SGK).
- Legal entity requirements: Foreign companies must establish a subsidiary or branch to hire employees directly.
For businesses testing the Turkish market, these requirements can be costly and time-consuming.
What Is an Umbrella Company in Turkey?
An umbrella company is a third-party employer that hires workers on behalf of a client. For foreign professionals, it acts as the legal employer in Turkey, while the worker delivers services to the end client.
The umbrella company:
- Signs an employment contract with the worker.
- Invoices the client company.
- Deducts taxes and SGK contributions.
- Issues payslips and provides healthcare and pension coverage.
- Assists with work permit applications for foreigners.
Umbrella companies are particularly useful for freelancers, consultants, and project-based professionals working in Turkey.
What Is an Employer of Record (EOR) in Turkey?
An Employer of Record Turkey is a service provider that legally employs workers on behalf of a client company. Unlike umbrella companies, EOR services are tailored for businesses rather than individuals.
An EOR in Turkey typically manages:
- Drafting compliant employment contracts.
- Payroll, tax withholding, and SGK contributions.
- Benefits administration.
- Onboarding and HR compliance.
- Work permit and visa sponsorship.
This allows a foreign company to hire staff in Turkey without opening a local subsidiary.
How EOR and Umbrella Companies Simplify Hiring
1. Work Permit Sponsorship
Both umbrella companies and EOR providers can act as the legal employer, sponsoring the work permits required for foreign talent. This eliminates the need for the foreign worker to register as self-employed or for the company to create a subsidiary.
2. Tax and Payroll Compliance
Foreign professionals and companies often struggle with taxation in Turkey. EOR and umbrella providers manage:
- Income tax deductions at the correct progressive rate.
- Employer and employee SGK contributions.
- Payslips and official documentation.
This ensures compliance and prevents costly penalties.
3. Legal Employment Contracts
Employment in Turkey is heavily regulated. Both EOR and umbrella companies draft contracts in line with labor laws, covering:
- Working hours (maximum 45 hours per week).
- Overtime pay.
- Paid leave and public holidays.
- Termination and severance rights.
This protects both the employee and the employer.
4. Faster Market Entry
Instead of waiting months to establish a subsidiary, companies can begin hiring talent in Turkey within weeks using an umbrella company or EOR provider.
5. Reduced Administrative Burden
From payroll processing to HR support, outsourcing these functions allows businesses to focus on operations while experts manage compliance.
Benefits of Using an Umbrella Company for Foreign Talent
Umbrella companies in Turkey are particularly beneficial for:
- Freelancers and contractors: Legal employment status without setting up a business.
- Short-term projects: IT consultants, engineers, and creatives working with international clients.
- Foreign professionals: Easy access to healthcare and pension contributions through SGK.
- Multiple client relationships: Freelancers can work with several clients under one umbrella contract.
Benefits of Using an EOR for Foreign Talent
Employer of Record (EOR) services in Turkey are more suited for companies seeking to hire larger teams or permanent staff. Benefits include:
- No entity required: Companies avoid the cost and complexity of creating a subsidiary.
- Scalability: Hire one employee or build a team quickly.
- Full HR outsourcing: From recruitment to benefits management, the EOR handles it all.
- Risk reduction: The EOR assumes legal employer responsibilities.
- Long-term hiring: Ideal for businesses planning stable operations in Turkey.
Key Differences Between EOR and Umbrella Companies in Turkey
| Aspect | Umbrella Company | EOR (Employer of Record) Turkey |
|---|---|---|
| Target Users | Freelancers, independent contractors | Businesses hiring employees |
| Best For | Short-term, project-based work | Long-term, team-based hiring |
| Legal Employer | Umbrella company | EOR provider |
| Scope of Services | Payroll, tax, SGK, invoicing | Full HR services, onboarding, compliance |
| Work Permit Support | Yes | Yes |
| Flexibility | High for freelancers | High for companies |
Example Scenarios
- Umbrella Company Example: A French marketing consultant wants to work with a Turkish e-commerce business for 12 months. Instead of registering as self-employed, she signs with an umbrella company. The umbrella company invoices the client, deducts taxes, and pays her salary with full benefits.
- EOR Example: A U.S. tech startup wants to hire five Turkish developers but has no entity in Turkey. The company partners with an EOR in Turkey, which employs the developers on its behalf. The U.S. startup directs their daily work, while the EOR manages payroll, contracts, and compliance.
Cost Considerations
- Umbrella Companies: Usually charge 5–10% of freelancer income or a fixed monthly fee.
- EOR Providers: Typically charge 10–15% of payroll, depending on services.
While umbrella companies are cost-effective for individuals, EOR services are better for businesses managing teams.
The Future of Hiring Foreign Talent in Turkey
As Turkey continues to integrate into the global economy, demand for flexible employment solutions will grow.
- Umbrella companies will expand in industries like IT, consulting, and engineering where project-based work is common.
- Employer of Record Turkey services will rise as more multinationals look to hire Turkish talent without heavy investment.
Together, they will shape the future of international employment in Turkey.
Conclusion
Hiring foreign talent in Turkey can be challenging, but EOR and umbrella company Turkey solutions provide efficient, compliant, and cost-effective alternatives.
- If you are a freelancer or consultant, an umbrella company provides flexibility, legal status, and access to benefits.
- If you are a business expanding into Turkey, an Employer of Record Turkey allows you to hire staff without setting up a subsidiary.
By leveraging these solutions, companies can access skilled talent in Turkey quickly and legally, while professionals enjoy the protections and benefits of formal employment. Looking for an Umbrella Company in Turkey ? Don’t hesitate to contact our team for more information.
