How to set up as an independent contractor in Turkey

If you’ve decided to go it alone as an independent contractor, then Turkey could be just the ticket.

Whether you want to set up on the bustling banks of the Bosphorus, breathe in the Mediterranean air in Antalya, or work under the hot-air balloons in Cappadocia, this fascinating country offers a great balance between work and life.

Before you can start living the self-employed dream, though, you’ll need to know how to:

• Register your business in Turkey

• Avoid misclassification as an employee

• Create compliant contracts that protect you

• Invoice and collect payments from around the world

In this article, we cover how to become a freelancer in Turkey and navigate your tax responsibilities as a self-employed worker. We’ll also discuss some of the other risks and liabilities you should be aware of.

First, it’s important to clarify how Turkey defines independent contractors.

What is an independent contractor according to Turkish law?

Independent contractors are workers who provide paid services (or products) to another party. However, they are classified differently from employees and are usually not entitled to the same benefits, such as paid leave, sick days, and minimum wage. On the flip side, contractors have more freedom and flexibility in the way they work.

See also: Why businesses hire contractors vs. international employees

In Turkey, there is no specific law that covers the legal differences between employees and independent contractors. However, Turkish labor laws clearly outline the legal boundaries of employment relationships:

Employees in Turkey

Work hours: Employees can work a maximum of 45 hours per week. If they exceed that number, they are entitled to overtime pay. 

Leave: Employees have several types of paid leave, such as annual leave (starting at 14 days per year), sick leave, and parental leave. 

Taxes: The employer withholds income tax. 

Social security: The employer is responsible for paying social security contributions. 

Benefits: Employees can receive fringe benefits, like health insurance, meal allowances, and transportation stipends, depending on their contract or company policy. 

Wages: The Turkish government guarantees employees a minimum wage of 8,506 Turkish liras per month.

Independent contractors in Turkey

Work hours and location:  Independent contractors have complete control over their work hours and where they work. 

Leave: Independent contractors are not entitled to any leaves. 

Taxes: Independent contractors are solely responsible for paying their own taxes. 

Social security: Independent contractors are responsible for their social security contributions.

Benefits: Independent contractors are not entitled to any additional benefits and must take care of their insurance themselves. 

Wage: Independent contractors negotiate their own rates with clients, which is usually an hourly rate or a fixed project fee. There is no minimum wage.  

When you work with clients, it’s important to be correctly classified to avoid penalties and fines and to ensure that you are paying the right taxes.

Determining independent contractor status in Turkey

In Turkey, there isn’t a single rule to determine whether a worker is an independent contractor or an employee. Instead, Turkish courts use the following criteria to help them decide:

Control over work 

Independent contractors have the autonomy to decide on their work schedules, work methods, and work locations. They aren’t under the same level of supervision as employees.

Economic dependence

Unlike employees, who typically depend financially on one employer, contractors are free to work with multiple clients and don’t rely on a single source of income. They also have the freedom to negotiate their wages with each client. 

Integration into the company

Generally, independent contractors aren’t integrated into the company they work for. This means they don’t participate in company events, receive benefits, or use a company email. 

Ownership of tools 

Independent contractors often use their own tools, equipment, and resources to complete their work. They are responsible for the maintenance of their tools and are not reimbursed for these expenses.

That said, independent contractors may be eligible to claim home tax deductions, depending on how they use their home for their work. 

Business registration in Turkey

Before you can begin working as an independent contractor in Turkey, you’ll first need to choose a formal structure for your business.

Sole proprietorship

The most popular model for sole owners is the sole proprietorship structure, as it’s quick and easy to set up and maintain. In this structure, you have full control of the enterprise, although there is no legal separation between you (the owner) and the business; you are personally responsible for all its debts and liabilities.

Pros of sole proprietorships in Turkey:

• Easy and affordable setup 

• Complete control over business

• Simple taxation process

• Minimal compliance requirements

Cons of sole proprietorships in Turkey:

• Unlimited liability for debts and obligations

• Limited growth potential

If you do opt for the sole proprietor model, you will need to register as self-employed with the Turkish Revenue Administration (GIB).

If your business activity is regulated (i.e. you practice a protected profession such as medicine or law, or you’re handling food), you may also need to acquire additional business permits or licenses from your local issuing authority.

You may be required to get the following permits and licenses as a sole proprietor in Turkey, too: 

Professional licenses: If you work in a regulated profession — as a doctor, lawyer, or engineer, for instance — then you need a professional license.

Operating licenses: Businesses in regulated industries, such as tourism and food handling, need an operating license.

Construction permits: These permits are necessary for construction or renovation work and should be obtained from your local municipality.

Import/export licenses: If your business involves importing or exporting goods, you need to get specific licenses and permits to comply with customs regulations and trade restrictions.

How do I register as a sole proprietor in Turkey?

Follow these six steps to register as a sole proprietor in Turkey: 

1. Choose a unique business name.

2. Prepare the required documents, which include the following: 

• Your passport

• A notarized Turkish translation of your passport

• Proof of your address in Turkey

3. Apply for a tax identification number. 

4. Register with the trade registry.

5. Get a signature circular.

6. Open a bank account in Turkey.

General partnership 

If you want more legal protection, you’re working with other partners, or you anticipate generating a large amount of revenue, you can also incorporate a formal company or enter into a partnership.

Pros of general partnerships in Turkey:

• Combined resources from all partners

• Shared responsibilities

• Tax advantages

Cons of general partnerships in Turkey:

• Joint liability for partner’s debts and actions

• Less autonomy in decisions

If you’re unsure which structure is most suitable for your business, it’s a good idea to speak with a registered solicitor or accountant.

How do I register as a general partnership in Turkey?

Registering a general partnership in Turkey is similar to registering as a sole proprietor, but with a couple of extra steps:

After applying for a tax identification number (Step 3), you should: 

1. Prepare a partnership agreement.

2. Notarize the partnership agreement.

How do I get paid as an independent contractor in Turkey?

As an independent contractor, it’s down to you to handle your invoices and payment collection. Unfortunately, this means billing each client individually and collecting payment through their preferred payment method — which can be inefficient and time-consuming.

Some of the most common ways to collect payments include:

• Bank transfers

• Direct deposits

• Paper checks

• Money orders

• Virtual wallets

• Digital transfer services like PayPal and Wise

These methods all have their own pros and cons. For instance, bank and digital transfers can be pretty quick but often come with hefty service fees. And if you have clients in other countries besides Turkey, the payment collection process can be even more complicated. 

Alternatively, you can use a trusted solution like Remote. Our platform is a simple, secure, and reliable way to get paid quickly in Turkish lira — and with no hidden fees. Learn more about how our platform can help.

Independent contractor taxes in Turkey

As an independent contractor, you’re responsible for filing and paying your own taxes. You need to register with the Turkish Revenue Administration (GIB) and get a tax number for compliance and invoicing.

Income tax and social security contributions 

The good news is that, as a sole proprietor, you pay personal income tax on your business profits. This means that you do not need to fill out additional returns or pay corporate taxes.

Like most countries, Turkey has a progressive income tax rate, and you can expect to pay anywhere between 15% and 40% depending on your level of income. 

Note that if you work with clients outside of Turkey, this may affect your tax liabilities. Be careful to avoid potential double taxation. In such cases, it’s a good idea to consult with a qualified tax specialist.

You must also make health insurance (SGK) and pension (BAĞ-KUR) contributions, which are based on your level of earnings. It may be possible to claim back some of these payments as tax deductions.

Quarterly and annual tax filing

As a self-employed person, you must make quarterly advance payments of 15% of the previous quarter’s income. These payments are due on the 25th of the month at the end of the quarter (e.g., the first quarter payment is due on April 25).

At the end of the year, the GIB will then calculate your final tax bill and determine if you have underpaid or overpaid. If you've overpaid, you receive a refund. If you've underpaid, you need to make up the difference.

You must submit your tax return by March 31 each year. Remember, late filing or payment can result in penalties and interest charges. It’s always a good idea to keep records of your income and expenses throughout the year to prepare for tax season and maximize deductions.

Deductible expenses

On the plus side, as an independent contractor in Turkey, you can reduce your taxable income by claiming deductions for the following business expenses: 

• Travel costs

• Office expenses

• Communication expenses

• Insurance premiums

• Professional services fees

• Tools and equipment (including maintenance)

• Vehicle expenses

If you work from home, then you might also be able to deduct a portion of your rent, utilities, and other home-related expenses for the space you use for your business.

VAT information for independent contractors in Turkey

In Turkey, all businesses and commercial enterprises must charge VAT, regardless of their income. You must file and pay your VAT returns on a monthly or quarterly basis.

The standard VAT rate in Turkey is 18%, although some goods and services are charged at the lower rates of 8% and 1%.

Liability considerations for independent contractors in Turkey 

As an independent contractor in Turkey, you’re personally liable for any debts or legal issues related to your business. 

Here are some types of liabilities you might face: 

• Contractual liability: This involves breaches of contract, non-performance of services, or disputes with clients. 

• Professional liability: Mistakes, errors, or negligence in your work could make you responsible for any resulting damages.

• Product liability: If you sell defective products that harm or injure someone, you can be held liable for damages. 

• General liability: This covers a wide range of potential risks, such as accidents or injuries that happen on your business premises. 

As a sole proprietor, you are personally liable for finance and tax debts, which means your private assets can be forcibly used to settle your business debts. 

Many independent contractors purchase liability insurance to help mitigate this risk, specifically: 

• Professional indemnity insurance (PI)

• Public liability insurance

• Product liability insurance 

It’s also important to cover yourself when drafting and signing agreements with clients. Our legal experts can provide you with fully compliant contract templates, for both Turkish and international clients.

Accounting requirements for independent contractors in Turkey

As a sole proprietor, you do not need to publish financial statements or accounts.

However, you must still keep organized, accurate records of all your income and expenditures (including client invoices, purchase orders, bank statements, and receipts). This will help you correctly file your taxes, give you a stronger picture of your financial situation, and generally make life easier if you are audited by the tax authorities.

You can either manage these records yourself using an accounting or bookkeeping tool or hire a professional bookkeeper or accountant.

The dangers of contractor misclassification in Turkey

As we’ve mentioned, independent contractors are classified differently from employees in Turkey. Many of the protections and benefits employees enjoy do not typically apply to contractors.

As a result, companies may deliberately misclassify you to circumvent their legal obligations, while at other times, it may happen accidentally. Whether it’s intentional or not, misclassification can result in penalties and fines for both you and your client.

As an independent contractor, you can work with your clients to ensure this doesn’t happen. Discuss your role and responsibilities with them, and review the working arrangement regularly.

If your working relationship changes over time and you become more integrated into a client’s company, you can ask to be converted into an employee.

Use our Contractor Compliance Checklist to avoid misclassification

Work through this checklist to help determine if a new hire should have a contractor or employee relationship.

Download

Protect your rights as an independent contractor in Turkey 

Misclassification can lead to legal and financial problems for both you and your clients. To protect yourself:

1. Document your work

Keep records of your contracts, invoices, and communications with clients in case any disputes arise. 

2. Know your rights

Get familiar with Turkish labor laws, as this will help you identify misclassification.

3. Report misclassification

If you think you may have been misclassified, report the issue to the Ministry of Labor and Social Security or consult with a labor law attorney to rectify the situation.

How do I ask the company I’m working with to convert me to an employee in Turkey?

Open a dialogue with your client and carefully discuss the risks and benefits of moving to an employer-employee relationship. In particular, be clear about how it can benefit both parties — not just you.

You can even suggest the help of a third-party solution, such as Remote, to ease the transition. Our global employment services help both parties stay compliant by taking care of key HR functions (like payroll management and benefits administration) in line with Turkish law.

5 ways Remote makes life easier for contractors and their clients

As you can see, there’s a lot to take on board when setting up as an independent contractor. Remote can help you with many of these challenges, allowing you to focus on growing your business and delivering to your clients. Here’s how:

1. Manage clients in one place

Remote makes life easier for independent contractors and their clients by centralizing everything they need — client info, contracts, and invoices — in one simple platform.

Moreover, take advantage of automated onboarding processes to make client management even easier. 

2. International payments in countries around the world

Navigating all of your clients’ different invoicing, approvals, and payment systems can be complicated and time-consuming. And manual methods of invoicing and collecting payments can increase the risk of fees, errors, and delays.

Remote gives you access to a highly secure, streamlined dashboard that makes invoice management and international payments cost-effective and efficient. You can use our platform to get paid in Turkish lira (or other currencies), without any hidden fees. 

And we can do all that while making sure you comply with Turkish labor laws and tax regulations.

3. Localized in-app contracts and advice

When you draft agreements and contracts for your clients, you run the risk of non-compliance with local labor laws — especially when working with international clients. 

Remote offers localized contracts tailored to Turkish laws, ensuring that you stay compliant. Our legal experts can also provide guidance on complex issues, such as local classification and intellectual property protections.

4. Invoicing automation

With Remote, you no longer need to rely on spreadsheets and other manual tools to invoice for payments; we remove many of the inaccuracies and delays caused by archaic processes and manual management. 

Our platform lets you create invoices, submit them for approval, and subsequently get paid in your local currency without needing to switch to any other tool or software.

5. Tax management

Tax management is notoriously complex work. Remote helps you quickly and efficiently deal with tax management by compiling data about your income based on your invoices and payments received.

Setting up as an independent contractor in Turkey

Having the freedom and flexibility to work on your own terms is liberating. But your administrative responsibilities can distract from what you really want to be doing: helping your clients, delivering great work, and collecting invoices.

By using a stable, trusted platform like Remote, you can manage these obligations quickly and efficiently, allowing you to focus on your business goals. Specifically, we can help you:

• Avoid intermediary fees and delays with international client payments

• Draft compliant contracts for Turkish and foreign clients

• Enhance your invoice management and avoid manual processes

• Comply with local labor laws regarding work practices

Our platform makes it quick, simple, and seamless to get started as an independent contractor. Learn more about how our expertise can save you time and resources today.