LAW ON THE WORK PERMITS FOR FOREIGNERS No.4817 EVALUATION CRITERIA FOR WORK PERMITS (SPECIAL FOREIGN DIRECT INVESTMENTS)

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2 ADMINISTRATIVE STRUCTURE LAW ON THE WORK PERMITS FOR FOREIGNERS No.4817 TYPES OF WORK PERMITS PROCESS OF APPLICATION TO WORK PERMITS EVALUATION CRITERIA FOR WORK PERMITS EVALUATION CRITERIA FOR WORK PERMITS (SPECIAL FOREIGN DIRECT INVESTMENTS) THE COORDINATION COUNCIL FOR THE IMPROVEMENT OF INVESTMENT ENVIRONMENT IN TURKEY (YOİKK) 2

3 ADMINISTRATIVE STRUCTURE GENERAL DIRECTOR DEPUTY OF GENERAL DIRECTOR DEPUTY OF GENERAL DIRECTOR DEPUTY OF GENERAL DIRECTOR DEPARTMENT OF HUMAN RESOURCES AND FISCAL SERVICES DEPARTMENT OF LEGISLATION AND INDIVIDUAL LABOUR RELATIONS. DEPARTMENT OF WORK PERMIT FOR FOREIGNERS DEPARTMENT OF STATISTICS DEPARTMENT OF UNIONS DEPARTMENT OF MIGRATION AND FOREIGN EMPLOYMENT DEPARTMENT OF COLLECTIVE LABOUR AGREEMENT AND OFFICIAL MEDIATION DEPARTMENT OF EMPLOYMENT POLICIES 3

4 DEPARTMENT OF WORK PERMIT FOR FOREIGNERS To implement Act 4817 and relevant regulations To assess and conclude the applications of work permit of foreigners in Turkey. 4

5 DEPARTMENT OF MIGRATION AND FOREIGN EMPLOYMENT To implement Act 4817 and Act 4875 (about Foreign Direct Investment) and relevant regulations. To analyze sectoral and regional impact of labour migration inflows. To make contribution to national policies on migration and employment of foreign workers. 5

6 LAW ON THE WORK PERMITS FOR FOREIGNERS No.4817 The work permits of foreigners with a few exceptions are granted by the Department of Work Permits for Foreigners and The Department Of Migration and Foreign Employment under the General Directorate of Labour since

7 PURPOSE OF LAW Granting work permissions to foreigners in Turkey, Centralizing grant of work permits, Creating a reliable database, Preventing illegal foreigner employment with effective monitoring Providing employers the oppurtunity to employ qualified foreigners considering the needs of labour market Preventing insurance premium losses by including foreigners within the social security system

8 SCOPE OF LAW Act 4817 The Law on The Work Permits of Foreigners covers; Dependent and independent workers, Foreign vocational trainees in a firm, and Natural persons and legal entities who employ foreign worker

9 RELATED REGULATIONS THE APPLICATION REGULATIONS OF WORK PERMIT FOR FOREIGNER Official Gazette date/no : 29/08/ DIRECT FOREIGN INVESTMENT REGULATION ON EMPLOYMENT OF FOREIGN STAFF Official Gazette date/no : 29/08/

10 Work permits for a definite period of time Work permits for a definite period of time may be granted for maximum of one year. After legal working period of one year, the work permit may be extended up to three years on condition that working at the same workplace or enterprise. At the end of three years period of legal working, the work permit may be extended for a maximum of further three years to work at the same profession with any employer of his/her own discretion.

11 Work permits for an indefinite period of time Foreigners have been residing in Turkey legally and uninterruptedly for at least eight years or working for a total period of six years, may be granted a work permit without any condition.

12 Independent Work Permit Independent work permit may be granted to the foreigners, who will work independently, under the condition that they have resided in Turkey legally and uninterruptedly for at least five years and their work shall have a positive effect on employment and economic development.

13 Work Permit Application From Abroad-1 1. Foreigners residing out of Turkey make their work permit applications to the Republic of Turkey representation offices in the country where they reside in the meanwhile by submitting employment contract signed by both employers and employee and it is given a reference number by Republic of Turkey representation offices. 2. The applications are directly forwarded to the Ministry.

14 Domestic Work Permit Application-1 Foreigners reside in Turkey with a valid residence permit for a sixmonths period may apply directly to the Ministry of Labour and Social Security for a work permission.

15 Granting Work Permit Work permits are being declared to the employer, Ministry of Interior, the related governorship (provincial police directorate) and provincial directorate of Social Security Institution (SGK).

16 Obligation of Notification Employers who employ a foreing worker are obliged to notify the situation to our Ministry; In 15 days at the latest from the foreign employee begins to work, In 15 days at the latest from the expiration date of employment contract.

17 LAW ON FOREIGNERS AND INTERNATIONAL PROTECTION In terms of migration, Turkey recently has began to seen as a "target country rather than a "transit country" Turkey's growing economic power created a major attraction and it has encouraged migration to Turkey. 17

18 LAW ON FOREIGNERS AND INTERNATIONAL PROTECTION In order to manage migration issues effectively, the Law on Foreigners and Internatıonal Protection(No:6458) came into force on

19 Work Permit as a Substitute For a Residence Permit A residence permit will not required for foreigners with a valid work permit. However, foreigners are obliged to register to Address Registration System within the latest twenty days from the date they have entered the country. Currently, the confirmation certificate for working permission exemption is given by the Ministry to the foreigners upon their request, however according to the new legislation, confirmation certificate for working permission exemption will also substitute for a residence permit in Turkey and it is compulsory for foreigners to take this certificate. 19

20 EVALUATION CRITERIA FOR WORK PERMIT- 1 First of all at least five Turkish citizens must be employed at the workplace which work permit is requested by. Paid-in capital of the workplace must be at least TRY 100,000 or the lowest figure for its gross sales amount must be equal to TRY 800,000 or its export amount in the last year must be at least USD 250,000 Foreigner requesting work permit who is a co-partner of the company must own at least 20% shares in the company, and this percentage shall correspond to at least TRY 40,000.

21 EVALUATION CRITERIA FOR WORK PERMIT- 2 Senior executives wage must be at least 6,5 times the minimum wage. Unit or branch manager, engineer, architect s wage must be at least four times the minimum wage. Teacher, psychologist, physiotherapist, musician and similar profession employees wage must be at least three times the minimum wage. Salespersons wage must be at least one and a half times the minimum wage.

22 Foreign Employment in Foreign Direct Investments - 1 a) A company or a branch shall provide one of the following circumstances in order to be defined as special foreign direct investments in case of the total capital share amount of the foreign shareholders to be at least Turkish Liras, The company s or branch s last annual turnover amount shall be at least 79,8 million Turkish Liras, The company s or branch s last annual export amount shall be at least 1 million US Dollars At least 250 personnel registered with the Social Securities Institution, shall be employed with the company or branch within the last year. The minimum fixed investment amount foreseen shall be at least 26,6 million Turkish Liras,

23 Foreign Employment in Foreign Direct Investments - 2 Having at least one more foreign direct investment in another country apart from the country of parent company, Working for a liaison office

24 KEY PERSONNEL-1 The personnel of any company being incorporated in Turkey and being a corporate body, featuring at least one of the following conditions shall be considered as Key Personnel ; 1) Working in the company s senior management or executive position, 2)Managing the entire or a part of the company, 3) Supervising or checking the works of the company s auditors, administrative or technical personnel, 24

25 KEY PERSONNEL-2 4) Taking new personnel to the company or terminating the employment of those existing or making suggestions in this subjects, any person in charge of at least one of the above fields or authorized in these matters; acting in the position of the company s associate, chairman of the board of directors, member of the board of directors, general manager, general manager associate, company manager, company manager associate and similar positions, 5) Any person featuring the knowledge considered essential for the company s services, research devices, techniques or methods, 6) Maximum one person in the liaison offices, who has been issued a letter of authorization by the principal company abroad. 25

26 PUBLIC PROJECTS and the Other FDI The evaluation criteria are not applied to the foreigners working at a public project.(except for the wage criteria)

27 The Conclusion of an Application An application except the ones within the scope of FDI and Public projects is concluded in max. 1 month. For the ones of special FDI and PP, evaluation time is max 15 days.

28 COUNTRIES WITH THE HIGHEST FDI RATE THE COUNTRY 1 USA JAPAN ENGLAND FRANCE BELGIUM CHINA GERMANY BRAZIL SINGAPORE SWITZERLAND TURKEY 181 INVESTMENT STOCK (BILLION DOLLARS) SOURCE:(UNCTAD-2013) 28

29 THE FIRST 10 COUNTRIES WITH DIRECT INVESTMENT INFLOW TO TURKEY MILLION DOLLARS COUNTRY CAPITAL RATE(%) COUNTRY CAPITAL INFLOW INFLOW RATE(%) 1 AUSTRIA ENGLAND SPAIN AUSTRIA BELGIUM LUXEMBOURG NETHERLANDS NETHERLANDS USA GERMANY AZERBAIJAN MALAYSIA FRANCE SWITZERLAND ENGLAND USA RUSSIA AZERBAIJAN GERMANY LEBANON TOTAL TOTAL

30 NUMBER OF WORK PERMITS GIVEN TO FOREIGNERS(TOTAL & FDI) Work Permits Granted In The Scope Of FDI Total Number Of Work Permits Granted 2013 April May June July August September October November December January February March April May

31 The Coordination Council for the Improvement of Investment Environment in Turkey (YOİKK) Turkey developed its own structure for reforming the investment climate. In order to rationalize bureaucratic procedures and reduce red tape, a comprehensive reform program was launched in 2001 and renewed in 2012, by Council of Members Leading Decision. Reform program is being implemented by two platforms which provide a channel to reflect views and priorities of the international and national private sector representatives. The Coordination Council for the Improvement of the Investment Environment (YOIKK)has become a key structure where private sector makes contributions in the process of improving investment climate. The Council conducts its agenda through 10 Technical Committees working on specific issues with participation of both public and private institutions. YOIKK is described as a success story of public-private partnership on international platforms. 31

32 The Coordination Council for the Improvement of Investment Environment in Turkey (YOİKK) YOIKK aims to rationalize the regulations on investments in Turkey, develop policies by determining the necessary arrangements that will enhance the competitiveness of the investment environment, generate solutions to the administrative barriers encountered by the domestic and international investors in all phases of the investment process including the operating period. The other platform is the Investment Advisory Council of Turkey (IAC) which is an international platform established to receive the recommendations of executives of high ranking multinational companies and international institutions regarding Turkish business environment. The recommendations stated in annual meetings by the Council members regarding business environment in Turkey are taken to the agenda of YOIKK Technical Committees and in the following Investment Advisory Council meeting. 32

33 Thank you