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Open a Branch in Turkey

Updated on Thursday 05th December 2019

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Foreign investors in Turkey have many options when it comes to opening a company. Entrepreneurs who want to expand their activities in the country can choose to open a new company or a branch in Turkey. A branch of a foreign parent company has several advantages regarding the rapidity of the incorporation and the incorporation costs.
 
Our company formation agents in Turkey can help you file all the necessary documents and understand the obligations that the Turkish branch will have to observe. We can help foreign business owners with the registration of a branch office in Turkey.

The characteristics of a Turkish branch

A branch is essentially an extension of the parent company outside the country. This is a good thing as the incorporation costs will generally be lower than in the case of a new company or a subsidiary and it can commence its activities in Turkey much faster. On the other hand, the branch is fully dependent on the parent company that is fully liable for the debts and obligations of the Turkish branch.
 
Like any other legal entity in Turkey, the branch must be registered at the Trade Register. Before registering the company, a set of documents need to be drafted and prepared in order for the representatives of the branch to be able to make the application for registration.
 
Among the features of the branch office, others which need to be considered are:
 
  • - it cannot complete other activities than the parent company’s;
  • - the parent company will be liable for all the actions of the branch office in Turkey;
  • - the branch office must bear the same name as the parent company;
  • - the branch office cannot make decisions about the sale or purchase of assets;
  • - from a taxation point of view, the branch office will pay taxes only on the income generated in Turkey.
 
If you want to open a company in Turkey and need help in deciding which type of structure suits you best, our local consultants can advise you.

Resolution of setting up a branch office in Turkey

The creation of a branch office in Turkey must be based on a resolution passed by the shareholders or by the directors of the parent company. It is also good to know that foreign and local companies can operate through branches in Turkey, therefore, the resolution is passed based on the company’s internal rules.
 
No matter how the decision is made and the resolution is passed, it must be submitted with the Ministry of Industry and Commerce in Turkey. Then, the following documents must be filed with the Companies Register when it comes to foreign companies establishing branches in Turkey:
 
  1. the resolution passed by the shareholders or directors confirming the decision of setting up the branch;
  2. a copy of the passport of the person appointed by the parent company to act as a representative in the branch;
  3. the signature of the appointed representative which must be certified by a Turkish public notary;
  4. a power of attorney granted by the parent company to the representative in Turkey;
  5. the parent company’s Certificate of Registration issued by the Trade Register in the country of origin.
 
It is also important to note that where a foreign citizen acting as a representative in the Turkish branch must obtain a residence permit in Turkey.
 
Our company registration consultants in Turkey can offer more information on the documents which need to be prepared by a foreign company seeking to establish a branch office.
 
We have also created a scheme with the main advantages of opening a Turksih branch office:

 

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Information about the parent company when setting up a Turkish branch

After the decision of registering a branch has been approved by the Ministry of Industry and Commerce, additional information needs to be filed with the Trade Register. The information which must be prepared by the representative in Turkey must comprise the name of the parent company, the date of registration, its address in the foreign country and the share capital. A letter of commitment must also be drafted and filed upon the opening of the branch. It is important to note that all the documents issued in a foreign language must be translated into Turkish before being filed with the Turkish authorities.

Registering a branch in Turkey

The application for registering a branch in Turkey must be signed by the authorized representative of the company and submitted to the Ministry of Industry and Trade. The application must include the following documents:
 
  • - identification details for the parent company - name, nationality, date of establishments, address and capital;
  • - identification details for the appointed authorized representative of the Turkish branch;
  • - a copy of the parent company’s memorandum and articles of association;
  • - a power of attorney that empowers the appointed representative to take any legal action in Turkey on behalf of the branch.
 
All the documents must be submitted in Turkish as certified and legalized translations. After the application is submitted to the Ministry, the company must also submit the necessary documents to the Trade Registry Office. They include: the permit to open the branch obtained from the Ministry of Industry and Trade, a special application form, notarized and legalized copies of the power of attorney for the branch representative and other letters and declaration forms.

Opening sub-branches in Turkey

It is possible for a foreign company to set up more than one branch in Turkey. Once the main branch office is established, the registration of sub-branches in other Turkish regions is simpler. The sub-branch will only need to obtain an operating permit from the Directorate General of Domestic Trade at the Ministry of Industry and Trade based on the power of attorney granted by the parent company or the residence permit issued for the representative officer appointed upon the opening of the main branch office.
 
If you plan on expanding the activities of your foreign company through more than one branch, our company registration advisors in Turkey can help you.

Taxation of branches in Turkey

One of the most important aspects related to setting up a branch in Turkey is taxation. As mentioned above, a branch office will be taxed on the income it generates in Turkey. The corporate tax rate in Turkey is 22%.
 
An important aspect related to the taxation of the branch is that the parent company is required to file an activity report of the branch with the Turkish authorities by the end of May of the current year for the previous one.
 
We also offer accounting services for foreign business owners who need support in Turkey.
 
From an economic point of view, in 2018, Turkey:
 
  • - had a Gross Domestic Product (GDP) of 784 billion USD;
  • - registered an exports value of 168 billion USD;
  • - registered an imports value of 223 billion USD;
  • - had a tourism revenue of 25,2 billion USD.
 
The value of foreign direct investments in Turkey reached 13.2 billion USD in 2018. If you want to set up a business in Turkey, no matter if under the form of a branch office or any other type of company, our consultant can help you.

FAQ on branch offices in Turkey

The Turkish Commercial Code provides for a very clear registration process of a branch office, however the representatives of foreign companies still have a lot of questions related to opening this business form. Here a few questions which were answered by our Turkish company formation consultants:
 
  1. Is it hard to open a branch office in Turkey?
No, the registration process of a Turkish branch office is not hard as long as all the documentation is complete.
 
  1. How long does it take to register a branch office in Turkey?
There is no specific timeframe for registering a branch in Turkey, however it will take longer than registering another business form because it requires more approvals.
 
  1. How is a branch office taxed in Turkey?
The branch office will be imposed the corporate income tax on the profits it makes in Turkey. We also offer accounting services in order to help foreign companies with commercial activities to ease the accounting requirements imposed by the Turkish authorities.
 
  1. Must a Turkish branch have a local representative?
Yes, the branch will be required to be represented by a Turkish national or residence permit holder.
 
  1. Can a foreign company open more than one branch in Turkey?
Yes, the Turkish law allows the main branch to have more sub-branches which will be subordinated to the same parent company.
 
Our Turkish company formation agents can help you submit the documents to the relevant authorities. If you need further help for investing in Turkey or want to know more about the particularities of the Turkish market and other available business forms, please contact our company formation agents in Istanbul.

 

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Call us now at +90 532 351 66 77  to set up an appointment with Cagatay Altunsoy, one of our specialists in company formation in Istanbul, Turkey. Alternatively you can incorporate your company without traveling to Turkey.

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