Virtual and serviced offices: what to watch when using one as the company address
Differences between virtual and serviced offices, using them as the registered office, tax office inspections, licences, service of notices, contract and invoice, VAT refunds and risk assessment; which businesses they suit.
In businesses such as software, consultancy, e-commerce or foreign trade brokerage, entrepreneurs often do not need an office. In this case using a virtual office or serviced office as the registered office reduces rent and set-up costs. However, the address is part of a company's official identity; some points should be taken into account when choosing.
The difference between the two models
| Virtual office | Serviced office (shared office) | |
|---|---|---|
| Physical workspace | None, or an hourly meeting room | Desk, room or co-working space |
| Use of the address | Registered office, correspondence address | Registered office and actual place of work |
| Secretarial services | Mail handling, call forwarding | Usually included |
| Tax office inspection | An area or sign at the address in the company's name and a service contract may be required | Easier, as there is an actual workspace |
| Suitable for | Service and brokerage businesses that do not need an office | Small teams, client meetings |
What does the tax office look for?
After a company is formed, the tax office may carry out a start-of-business inspection and may later establish the activity at the address through further inspections. Inspections usually look at:
- The service or lease contract showing the right to use the address,
- A sign, mailbox or allocated area showing the company's presence at the address,
- Whether the authorised persons can be reached,
- Information on where the books and documents are kept.
A negative inspection report may be issued for companies not found at the address or whose activity cannot be established; this can cause problems in many processes, from e-Invoice transactions to VAT refunds. Invoices issued to you by your suppliers and invoices you issue may also be questioned.
Which activities is it unsuitable for?
- Production, manufacturing, assembly,
- Storage, holding stock, delivery of goods,
- Businesses that customers actually visit (such as retail, health and beauty services),
- Activities requiring a municipal licence or sectoral permit: Workplace licence
- Cases where an actual workplace is required in customs procedures and some permit processes.
Starting these activities at a virtual office address creates the later cost of a change of address and tax risk.
Contract, invoice and expense
- The virtual office fee is documented with an invoice issued by the service provider and can be expensed by the company.
- The nature of the contract (service contract or workplace lease) affects the withholding and VAT treatment. For payments that are workplace rent, rent withholding arises if the landlord is an individual: Rent withholding
- The contract should state clearly that the address may be used as the registered office, the receipt and forwarding of notices, use of meeting rooms and the obligation to change address if the contract ends.
Service of notices
A large part of tax, SGK and court notices to companies are served electronically: Digital obligations after formation. Physical notices, however, arrive at the address. Make the contract specify how and how quickly the virtual office provider forwards notices; with a missed notice, deadlines start to run.
Before choosing
- Does your activity require an actual workplace, warehouse or licence?
- How many companies does the provider serve at its address, and how does it help during inspections?
- Are meeting room, mail and notice services written into the contract?
- If you will hire employees later, where will the SGK workplace address be?
We can assess the choice of address together at the formation stage: Limited company formation
Legal basis: Tax Procedure Law No. 213 arts. 127, 153/A and 156–160; Turkish Commercial Code No. 6102 arts. 39 and 52.