A foreign company wishing to operate in Türkiye has three options: form a new Turkish company (subsidiary), open a branch or open a liaison office. The choice determines tax burden, liability, set-up time and what you can do in Türkiye.
Comparison
| Subsidiary (Ltd. / A.Ş.) | Branch | Liaison office | |
|---|---|---|---|
| Legal personality | Separate Turkish entity | None; part of the parent | None |
| Commercial activity | Free | Free | Prohibited (promotion, market research, liaison only) |
| Liability | Limited to capital | Parent fully liable | Parent |
| Minimum capital | Ltd. TRY 50,000, A.Ş. TRY 250,000 | No statutory minimum | None; expenses funded in foreign currency from abroad |
| Authorisation | Trade registry | Trade registry | Ministry of Industry and Technology permit (time-limited, renewable) |
| Tax | Corporate tax 25% + 15% on distributions | Corporate tax 25% + 15% on transfers to head office | No corporate tax; staff salaries taxed |
| Resident representative | Not required | Fully authorised resident representative required | Authorised representative |
| Set-up time (documents ready) | 1–3 weeks | 6–10 weeks | A few weeks depending on Ministry review |
Tax
- Branch: pays 25% corporate tax on Turkish profits; profits transferred to head office are subject to 15% withholding (about 36.25% in total, same as a subsidiary). A tax treaty may reduce the withholding.
- Interest and licence fees paid by a branch to its head office are not deductible; head office overhead allocations are accepted only on an arm's length allocation key.
- A liaison office cannot earn income and is not subject to corporate tax; it has payroll withholding and SGK obligations and may claim VAT refunds.
Setting up a branch
- Check whether the activity requires a permit in Türkiye (banking, insurance, energy etc.).
- Apostille or consular legalisation of parent documents, translation into Turkish and notarisation.
- Appoint a fully authorised representative resident in Türkiye.
- Apply to the trade registry with a MERSİS request number and an ITO appointment. The first branch is named "parent name + country of head office + Istanbul Head Branch"; later branches omit "Head". No separate tax number is needed; a screenshot of the parent's potential tax number is attached.
- Opening certification of books, tax office registration, e-Notification and KEP.
- Bank account (2–8 weeks for foreign parents).
- Foreign investment notifications.
Documents (typical)
- Parent's resolution to open the branch and appoint a fully authorised resident representative (original power of attorney if powers are not full)
- Parent's current registry records and certified copy of its articles
- Letter confirming that conditions for opening a branch in the home country are met, and registry documents required for branches
- Branch declaration signed by parent officers, with branch capital and representatives (original)
- Petition, formation notification form and chamber registration form with photos
- Notarised passport translations of representatives and signature declarations under TCC art. 40
- Permit or opinion letter if the activity is regulated
- Apostille or consular legalisation and notarised Turkish translation for all foreign-language documents
Fee: 35,354.50 TL trade registry fee for branches of capital companies; details: Trade registry fees. Appointing a branch manager is a separate registration.
Liaison office
A permit is obtained from the Ministry of Industry and Technology; it is time-limited and renewable with an activity report. The office cannot trade or invoice; all expenses are funded with foreign currency brought from abroad. To start trading it must be converted into a branch or company.
Common mistakes
- Holding sales meetings or signing contracts through a liaison office (permanent establishment risk).
- Leaving apostille and translation of parent documents to the end (the longest part).
- Forgetting withholding on branch profit transfers.
- Charging head office costs to the branch without documentation.
Frequently asked questions
Branch or company? The tax burden is similar. A subsidiary suits limited liability, local partners and tenders; a branch suits direct visibility of the parent and simple profit transfers.
Work permits for branch staff? The usual work permit criteria apply. Work permits
Formation and accounting afterwards: Foreign investors
Sources
Turkish Commercial Code arts. 40 and 43 (branches); Foreign Direct Investment Law and implementing regulation (liaison offices); Corporate Tax Law art. 30 (branch profit transfers); ITO branches of foreign companies.