Establishing a Branch Office in Turkey for a Foreign Company
(A Guide for Global Investors Seeking Local Presence)
1. Why Establish a Branch Office Instead of a Subsidiary?
For international groups aiming to expand into Turkey without forming a separate legal entity, a branch office (şube) offers a strategic middle ground. It allows full operational control under the parent company’s umbrella while benefiting from Turkey’s large and diversified market.
Unlike a limited liability company (Ltd. Şti.) or joint-stock company (A.Ş.), a branch office:
Has no independent legal personality,
Operates under the foreign company’s trade name, and
Is taxed as a Turkish permanent establishment.
This structure is ideal for:
SaaS or technology firms seeking local compliance presence,
International consulting or engineering groups executing projects in Turkey,
Companies testing the Turkish market before full incorporation.
2. Legal Framework and Registration Requirements
Branch offices in Turkey are regulated under the Turkish Commercial Code (TCC) and the Foreign Direct Investment Law (No. 4875).
Key Authorities:
Trade Registry Office (Ticaret Sicil Müdürlüğü)
Tax Office (Vergi Dairesi)
Social Security Institution (SGK)
Required Documentation:
Parent Company Resolution: A board resolution authorizing the establishment of a Turkish branch.
Articles of Association: Apostilled and notarized copy of the parent company’s founding document.
Certificate of Good Standing: Confirming legal existence in the home jurisdiction.
Power of Attorney: Appointing a Turkish branch representative with full authority.
Identity and Address Proofs: For the appointed representative.
All foreign documents must be apostilled and translated into Turkish by a sworn translator before registration.
3. Step-by-Step Process
| Step | Description | Responsible Party |
| 1 | Preparation of corporate documents and notarized translations | Parent Company |
| 2 | Drafting of branch resolution and PoA | Parent Company + OZM Consultancy |
| 3 | Trade Registry application through MERSİS system | Local Representative |
| 4 | Tax registration and obtaining a tax number | OZM Consultancy |
| 5 | Opening a bank account and registering for social security | Branch Office |
| 6 | Optional VAT and payroll registration | OZM Consultancy |
Timeline: Approximately 2–3 weeks after all notarized and apostilled documents are received.
4. Taxation and Compliance Perspective
A branch office is considered a “permanent establishment” of its foreign parent in Turkey. Therefore:
Corporate Tax: 25% on profits attributable to the branch.
Profit Transfer Tax: 15% withholding tax on amounts remitted to the parent company.
VAT: Branches providing services in Turkey are subject to 20% VAT.
Accounting: Turkish GAAP (Uniform Chart of Accounts) and e-Ledger obligations apply.
There is no minimum capital requirement, but the branch must declare an initial capital allocation for operational purposes.
5. Key Advantages
✅ No local shareholder requirement — 100% foreign ownership allowed.
✅ Full managerial control by the parent company.
✅ Lower administrative burden compared to a subsidiary.
✅ Eligibility for Technopark and R&D zone incentives (subject to project qualification).
6. Strategic Considerations
Before choosing between a branch office and a limited company, investors should evaluate:
Tax repatriation efficiency,
Liability exposure of the parent company,
Future investment and exit strategy,
Eligibility for incentive programs (TÜBİTAK, KOSGEB, Technopark, etc.).
In practice, tech exporters and SaaS providers often start with a branch to test the market and then convert to a local subsidiary once turnover or staff levels justify full incorporation.
7. OZM Consultancy’s Role
At OZM Consultancy, we provide end-to-end guidance for international companies entering the Turkish market:
Document preparation and legalization across jurisdictions,
Trade registry filing and tax registration,
Branch accounting and payroll setup,
Ongoing tax compliance and cross-border reporting,
Advisory on double taxation treaties and profit repatriation.
We act as your local compliance partner, ensuring every step is executed under the Turkish Commercial Code, Tax Procedure Law, and relevant Ministry regulations.
8. Reach us
If your company plans to establish a branch office in Turkey, partner with a CPA-led advisory firm that understands both international structuring and local compliance.
📩 Reach out to OZM Consultancy to schedule a consultation with our cross-border tax team and get a tailored roadmap for your branch registration and operations in Turkey.
info@ozmconsultancy.com
