Foreign Companies Opening a Branch in Turkey: A Comprehensive Guide
Foreign Companies Opening a Branch in Turkey: A Comprehensive Guide
Foreign Companies Opening a Branch in Turkey: A Comprehensive Guide
Expanding into Turkey can unlock vast commercial opportunities for foreign corporations. Establishing a branch office—or alternatively, a liaison office—allows international companies to operate directly within the Turkish market under local regulations. This guide outlines the essential documentation, procedural steps, tax implications, and strategic advantages of setting up a branch or liaison office in Turkey.
1. Key Documents for Branch Registration
To open a branch in Turkey, a foreign company must submit the following, all with originals and notarized Turkish translations:
Application Petition signed by the company or its legal representative.
Board Resolution approving the branch’s establishment (original + notarized Turkish translation).
Articles of Association or charter of the parent company (original + notarized translation).
Certificate of Incorporation showing the company’s formation date, place, and governing law.
Certificate of Activity (proof the parent company is active).
Power of Attorney for the Turkish representative, with notarized translation.
Note: All foreign public documents must be legalized at a Turkish Consulate or apostilled under the Hague Convention, then translated and notarized in Turkey.
2. Step-by-Step Branch Registration Process
Obtain Ministry Approval
- Submit the documents above to the Ministry of Trade for an establishment permit.
MERSİS Application
Register the branch via the Central Registry System (MERSİS) online portal.
Receive a “MERSİS request number.”
Trade Registry Filing
File with the local Trade Registry Office, including:
Application petition (branch name, capital, address, opening date, NACE activity code).
Establishment notification form.
Chamber of Commerce registration declaration.
Notarized documents from Step 1.
Publication
- The registry office publishes your branch details in the Turkish Trade Registry Gazette.
Tax and Social Security Registration
- Register the branch for corporate tax, VAT, and social security at the relevant tax and social security offices within 30 days of registration.
3. Establishing a Liaison Office: Overview
A liaison office (representative office) enables a foreign company to conduct non-commercial activities, such as market research and promotional work, without engaging in direct sales. Key prerequisites:
The parent company must be validly incorporated abroad under its national law.
Obtain a permit from the Ministry of Industry and Technology, which may require the parent to be at least one year old.
Activities are strictly limited to liaison and coordination; no income-generating operations.
4. Documentation for Liaison Office Application
To apply to the Ministry of Industry and Technology, foreign companies must provide:
Liaison Office Establishment Form.
Statement of Activities, confirming no commercial transactions.
Power of Attorney for the authorized representative.
Certificate of Activity of the parent company.
Activity Report or Financial Statements (e.g., balance sheet and income statement).
Authorization Letter for local personnel.
Notarized Power of Attorney, if proceedings are handled by an agent.
All documents require legalization (Consular or Apostille) and notarized Turkish translations.
5. Tax Obligations for Branches and Liaison Offices
| Entity Type | Corporate Tax | VAT | Withholding Tax | Social Security Contributions |
| Branch | Full liability as a resident company. | Standard VAT treatment. | Withholding on rent & salaries. | Employer & employee premiums. |
| Liaison Office | Exempt (non-commercial). | N/A | Income tax withholding on staff. | As applicable to employees. |
Double Tax Treaties: Turkey has agreements with many countries; branches may benefit from relief or credits under these treaties.
Social Security: Branch employees must be registered under Turkish social security law.
6. Advantages of Opening a Branch in Turkey
Rapid Market Entry: Faster setup compared to forming a new Turkish company.
Geostrategic Position: Access to both European and Middle Eastern markets.
Double Tax Treaty Network: Mitigate withholding and corporate taxes through treaties.
Profit Repatriation: Simplified mechanism for transferring profits abroad.
Brand Continuity: Operate under the established parent company’s name.
7. Branch Naming Conventions
When naming the first Turkish branch, the title should follow:
[Parent Company Name] – [Country of Incorporation] [City] Branch
Example: “X Company GmbH Germany Istanbul Central Branch”
Subsequent branches omit “Central” and country details, but must still indicate they are a branch.
Always include both the parent and branch addresses in registration documents.
8. Appointing a Branch Manager
To designate a branch manager in Turkey, file a notification with the local Chamber of Commerce using:
Manager Appointment Petition.
Board Resolution or foreign document authorizing the appointment (notarized + translated).
Signature Declaration of the branch manager.
Identification:
Turkish citizen: copy of national ID.
Foreign national: notarized passport copy + tax ID.
Acceptance Letter signed by the manager (notarized).
9. Frequently Asked Questions (FAQ)
Q1: What is the difference between a branch and a liaison office?
A branch can engage in commercial activities and generate income, while a liaison office is restricted to non-commercial liaison and market research.
Q2: How long does it take to open a branch?
Typically 4–8 weeks, depending on document legalization, Ministry approval, and registry processing times.
Q3: Can a liaison office conduct sales?
No. Liaison offices may only perform market studies, promotional activities, and coordination—not direct sales or revenue-generating operations.
Q4: Are all documents required to be translated into Turkish?
Yes. Every foreign public document must be legalized (Consular or Apostille) and accompanied by a notarized Turkish translation.
Q5: Do branches benefit from Turkey’s double taxation treaties?
Yes. Branches can apply treaty benefits to avoid or reduce withholding taxes on cross-border payments.
10. Conclusion & Call to Action
Opening a branch or liaison office in Turkey offers significant strategic advantages, from rapid market access to favorable tax treaty benefits. However, navigating the legal, administrative, and tax requirements demands careful planning and precise documentation.
Ready to expand into Turkey?
Reach out to Özmen Financial Consultancy today. Our expert team will guide you through every step—from document legalization and Ministry approvals to tax registration—ensuring a smooth and compliant market entry.
👉 Contact us now for a tailored consultation and unlock your business’s potential in Turkey!
info@ozmconsultancy.com
