A Guide for New Investors from Av. Ali Yurtsever
1. INTRODUCTION – HEALTH TOURISM IN TURKEY
Turkey has been a leading force in medical tourism market around the world for some time now. Although the market did take an initial hit with the emergence of Covid-19, it quickly recovered to pre-pandemic numbers once the travel restrictions were lifted. And since then, the number of foreign patients seeking medical and healthcare services in Turkish health institutions and doctors has steadily increased. Total number of foreign patients seeking healthcare services was approximately 338.000 in 2020. This number increased to 624.444 in 2021, whereas the first half of 2022 alone saw a total of 586.754 visitors from foreign countries seeking healthcare services.
The main forces driving these numbers and allowing Turkey to become a leader in global markets in health tourism services, are affordability and safety. Turkey offers cheaper healthcare services than most other countries with developed healthcare systems, which allows patients to seek affordable healthcare with a good quality of service. As for safety, Turkey took several steps to ensure that health tourism services are properly regulated with rigorous oversight from public officials, which ultimately allows patients to trust the health tourism service providers they deal with.
This, in return, means the barrier for initial entry into health tourism market in Turkey is slightly higher, since a new business will need to satisfy the criteria and obtain the relevant licenses as required by the state in order to legally conduct health tourism services.
2. REQUIREMENTS FOR HEALTH TOURISM SERVICES
Medical services and health tourism related issues are tightly regulated under a set of legislative frameworks, starting with the main law text, the Law on the Method of Execution of Medicine and Medical Sciences No. 1219 (Medical Law), the Law on Health Care Services No. 3359 (Healthcare Law), and their secondary regulations and communiques. According to this framework, the institutions, entities and persons authorized to provide healthcare and patient care services (including health tourism) are strictly controlled and are mainly subject to licenses to be issued by the Ministry of Health in Turkey.
According to the Regulation Regarding International Medical Tourism and Tourist Health (Health Regulation), agencies acting as intermediary health tourism operators will need to submit two separate applications for two separate licenses to two separate ministries, first a Group A Tourism Agency License obtained from TURSAB, and then a Medical Tourism Intermediary Agency License obtained from the Ministry of Health. Both of these licenses come with their own sets own criteria and requirements, which new businesses must adhere to in order to obtain them.
a) Group A Tourism License
Article 5 of the Health Regulation sets forth that any intermediary agency operating as a health tourism agency will need to obtain a license from the Ministry of Health (health tourism license). However, in order to obtain this health tourism license, the applicant companies need to satisfy the requirements noted in the annex 2 and 3 of this Regulation. One of the requirements (and possibly the most important one), is to obtain a Group A tourism agency license (tourism license).
Tourism agencies, and tourism agency licenses, are regulated with the Law on Tourism Agencies and Tourism Agency Associations No. 1618 (Tourism Law) and the Tourism Agencies Regulation (Tourism Regulation). To obtain a Group A Tourism License, the investor will first need to establish a capital company (please refer to our article on Capital Investments in Turkey for more details). Special clauses need to be included within the company’s articles of association, during the incorporation stage. As such, it is highly advised that investors seek professional assistance.
Once the company is established, an application needs to be made to the Ministry of Culture and Tourism for the reservation of a tourism agency title. Proper selection of the agency title will be important to avoid unnecessary time consumption during the approval process. Once this application is approved by the Ministry and the agency title is reserved, a separate application will be made to TURSAB to obtain the Group A Tourism License.
It should be noted here that this Group A Tourism License application has a separate set of requirements and criteria that the applicants will need to satisfy. These include having a specific provision in the company AoA, collection and submission of proper company documents, having a proper office space that meets the criteria and employing personnel that meets the criteria noted in the Regulation.
b) Health Tourism Certificate
Once the Tourism License is obtained, the company will need to proceed with the application for a Medical License (Health Tourism Certificate) to the Ministry of Health. These applications are to be submitted to the relevant Provincial Directorate of Health where the company is located and are subject to a separate set of requirements. These requirements include (but are not limited to) signed protocols with different licensed medical facilities, infrastructure for a call center and employment of qualified personnel.
Following the initial application, the Ministry will inspect the company, office space and declared employees, to check and verify that the office space is suitable, the employees all have the necessary qualifications and are employed by the company, and that the company has the necessary technological infrastructure as well as the necessary equipment (phones, internet, computers etc.) to efficiently handle applications from potential tourists.
3. ISSUES WITH PERSONAL DATA PROCESSING & COMPLIANCE
Apart from the standard licenses a company need to have to provide health tourism services in Turkey, any business that will operate in this field will also need to take utmost care in the handling of personal data of patients who purchase services through them. This is especially important as any health tourism company will be effectively handling and processing health data of patients, which is classified as sensitive personal data as per the Law on Personal Data Processing (LPDP). For details on personal data processing in Turkey, please refer to our articles on Principles for Lawful Personal Data Processing and Personal Data Protection in Turkey.
This classification of health data is equally important for determining whether the data processor will be required to register to the Data Controllers’ Registry (VERBIS). Data Controllers’ Registry or VERBIS is a publicly available database kept by the Data Protection Board (the “Board”), the decision-making body of the Turkish Data Protection Authority (the “DPA”). Unless exempt from the requirement, all data controllers (individuals and legal entities) who process personal data in Turkey must register with VERBIS.
Accordingly, the following data controllers will be required to register to VERBIS:
- Legal entities with more than 50 employees annually or whose annual total financial statement exceeds TL 25,000,000.
- Legal entities that have less than 50 employees annually and whose annual total financial statement is less than TL 25,000,000 but whose main business is processing sensitive personal data (e.g. ethnic origin, political opinion, membership of associations, information relating to health).
According to the criteria above, a health tourism agency will be required to complete its registration into the VERBIS system, since it will be effectively processing sensitive personal data. It is therefore crucial that the investors ensure that the company is in full compliance with data protection regulation (including VERBIS registration) to avoid potential penalties and fines.
4. CONCLUSION
As you can see, although Turkey is a booming market as far as health tourism services are considered, potential investors should thread carefully when planning their entry into the market. The legislative requirements, coupled with the requirements for different licenses and compliance to different legislative issues such as data protection rules, can result in huge loss of time and extra costs to investors if the investment is not properly planned from the start. To avoid such problems and to ensure the cost for initial entry remains low, it is advised that investors seek professional help and assistance when setting up their health tourism services in Turkey.
