Employment Incentives In Turkey

Employment Incentives in Turkey: Boost Your Business in
2024

Turkey has emerged as a dynamic economic hub, offering
substantial opportunities for businesses and employees alike. As
part of its broader economic policy, the Turkish government has
established a wide array of employment incentives designed to
stimulate job creation, reduce unemployment, and promote
investments in various industries. This guide provides an overview
of the employment incentives in Turkey, explaining their structure,
benefits, and the specific sectors they target.

Overview of Employment Incentives in Turkey

To promote a competitive job market and economic growth, Turkey
has implemented various employment incentives targeting both local
and foreign businesses. These incentives aim to enhance job
creation, especially in strategic sectors such as technology,
manufacturing, tourism, and renewable energy. Employment incentives
are essential for economic stability and are part of Turkey’s
wider initiative to attract foreign direct investment (FDI).

Employment Incentives in
Turkey

Key Objectives of Turkish Employment Incentives

The primary goals of Turkey’s employment incentives are
to:

• Reduce Unemployment: Address high unemployment
  rates, particularly among youth and women.




• Encourage Investment: Support both local and
  international businesses to set up operations in Turkey.




• Promote Regional Development: Focus on
  economically underdeveloped regions to foster balanced economic
  growth across the country.




• Boost Workforce Skills: Facilitate training
  and upskilling of the Turkish workforce to meet industry
  demands.

Types of Employment Incentives

Turkey’s employment incentives cover a broad spectrum, and
each category has specific benefits for employers who meet the
criteria. Key incentive categories include tax incentives, social
security premium incentives, regional incentives, and vocational
training programs.

a) Social Security Premium Incentives

Social security premium incentives reduce the employer’s
financial burden by covering part of their social security
contributions. Key types include:

• General Social Security Premium Incentive:
  Applies to employers who meet specific hiring requirements,
  providing monthly support on social security premiums.




• Minimum Wage Support :“Minimum Wage
  Support” is a fixed amount of support provided to employers of
  workers earning minimum wage in Turkey in order to ease their
  financial burden. This support aims to help reduce the costs caused
  by the minimum wage, especially on small and medium-sized
  businesses.




• The Debt-Free Incentive: It offers a
  5% monthly discount on social security employer
  contributions to employers with no outstanding premium debts.




• Overseas Incentive: Provides employers with a
  5% monthly discount on social security employer
  contributions that they must pay for employees they employ in
  projects outside Turkey, in order to support companies doing
  business abroad and increase their competitiveness.




• OHS Incentive: Employers operating in
  high-risk sectors (such as construction, mining, and oil
  exploration) with more than 10 employees, who have maintained a
  record free of fatal or permanently disabling workplace accidents
  for the past three years, are eligible for a 50%
  reduction in unemployment insurance contributions for a period of
  three years.




• Women and Youth Employment Incentive: Special
  incentives are available for companies hiring women, young people,
  and disabled workers, reducing premium costs.




• Long-term Unemployed Employment Incentive:
  Employers hiring individuals unemployed for a long period receive
  subsidies on social security premiums for a specified period.

b) Regional Incentives

Regional incentives aim to balance economic development across
Turkey by providing additional benefits to businesses in
less-developed regions:

• Enhanced Incentive Rates: Companies operating
  in specific regions receive enhanced rates on tax reductions,
  social security premiums, and interest support.




• Strategic Investment Incentives: Businesses
  investing in sectors crucial to regional economies, such as
  manufacturing or agriculture, gain additional advantages.

c) Vocational Training and Development
Programs

Vocational training programs are critical for developing a
skilled workforce. The Turkish government partners with industry
leaders to offer programs that improve employee skills and increase
productivity:

• On-the-job Training Programs: Companies
  benefit from subsidized training programs for employees,
  encouraging skill development.




• Apprenticeship Incentives: Employers who take
  on apprentices are eligible for financial support from the
  government to cover training and wage costs.

Eligibility Criteria for Social Security Incentives in
Turkey

Each incentive program has unique eligibility requirements, but
some general criteria include:

• Sector Requirements: Certain incentives are
  sector-specific, aimed at industries like technology,
  manufacturing, or agriculture.




• Regional Criteria: Regional incentives are
  only available to companies based in designated development
  regions.




• Employment Conditions: Incentives for women,
  youth, and disabled individuals require specific hiring practices
  that prioritize these groups.

How to Apply for Employment Incentives in Turkey

Applications for employment incentives can be submitted through
the Turkish Employment Agency (İŞKUR) or the Social
Security Institution (SGK). Steps typically include:

• Registering with İŞKUR and SGK.




• Submitting necessary employment documents, including contracts
  and employee information.




• Verifying eligibility with relevant authorities.

Benefits of Employment Incentives for Employers &
Employees

For employers, these incentives mean lower employment costs,
reduced social security countrubutions , and increased access to a
skilled workforce. For employees, the incentives create job
opportunities, provide vocational training, and offer job
stability, especially for disadvantaged groups.

Key Industries and Sectors Benefiting from Employment
Incentives

Several industries benefit significantly from Turkey’s
employment incentives:

• Manufacturing: Manufacturing companies enjoy
  substantial tax reductions and social security incentives,
  particularly in less-developed regions.




• Technology and Innovation: Start-ups and tech
  companies are eligible for tax benefits and skill development
  programs.




• Tourism: Incentives support the tourism
  industry, focusing on regions with high potential for tourism
  development.




• Agriculture and Renewable Energy: Agricultural
  and green energy sectors receive special tax reductions and social
  security benefits, encouraging sustainable development.

• Niche Markets: Specialized sectors like
  sustainable products, organic foods, and customized fashion are
  growing in popularity.




• Cross-border Trade: Turkish consumers have a
  high demand for international products, particularly luxury and
  beauty brands, offering a great opportunity for cross-border
  e-commerce businesses.




• Rising Digital Payment Solutions: Turkey’s
  adoption of digital payments and fintech solutions creates
  opportunities to offer flexible payment options like BNPL and
  mobile payments.




• Government Incentives: Incentives for
  technology investments and exports in sectors like IT, R&D, and
  digital innovation support e-commerce growth.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.