Do I Need a Local Entity to Hire in Turkey?

In Turkey, a "local entity" refers to a recognized business presence, such as a subsidiary or branch office, that can act as the employer. This setup allows your company to comply with local payroll and employment obligations, ensuring you meet the legal requirements for hiring in Turkey.

Without a local entity, you typically can't register as an employer, manage payroll, or comply with mandatory employment protections. However, using an Employer of Record (EOR) can provide a compliant solution without the need for establishing a local entity.

What is Required to Employ Someone in Turkey?

• Local employing entity required to directly employ? Yes (a local entity is needed for direct employment)
• Payroll registration required? Yes (you must register with the Turkish Social Security Institution)
• Withholding/tax remittance required? Yes (employers must withhold income tax and remit it to the tax office)
• Social contributions required? Yes (mandatory contributions to the Social Security Institution are required)
• Local employment agreement required? Yes (written contracts are mandatory under Turkish labor law)
• Mandatory benefits to budget? Yes (statutory leave, health insurance, and severance pay must be considered)
• Works council/collective agreements considerations? Often (certain sectors may have collective agreements affecting employment terms)

Best Options If You're Hiring in Turkey

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should proceed with caution. Hiring contractors in Turkey is possible without establishing a local entity, but it carries risks of misclassification.

While contractors can provide flexibility, Turkish labor laws are protective of workers, and misclassifying an employee as a contractor can lead to legal issues. To mitigate risks, ensure that contractors operate independently and are not integrated into your core business operations.

• Be cautious of exclusive work arrangements.
• Avoid controlling the contractor's hours or methods.
• Ensure the contractor is not embedded in your organization.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Turkey, depending on the type of business and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 5,000–15,000 TRY per month ($200–$600)
• Payroll provider: Estimated 500–1,500 TRY per employee per month ($20–$60)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated 20,000–60,000 TRY per year ($800–$2,400)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions, mandatory benefits administration)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Turkey

Hiring in Turkey can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Turkey quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.