WHAT IS A LIASION OFFICE UNDER TURKISH COMMERCIAL LAW?

A liaison office in Turkey is a representative entity established by foreign companies to carry out certain activities without engaging in commercial operations. These offices are responsible for tasks such as representation and hosting, supervision of Turkish suppliers in terms of quality and standards, supplier sourcing, providing technical support, communication, and information transfer. In addition, they may also function as a regional management center.

According to Turkish Commercial Law, foreign companies have the right to establish a contact office in Turkey to conduct research related to their business field, evaluate the potential of the domestic market, and analyze new commercial opportunities. Instead of conducting direct commercial activities, these offices aim to understand market dynamics and strengthen local cooperation networks.

For many foreign companies, opening a liaison office in Turkey is often the first step when entering the Turkish market. By providing information and support, these offices contribute to foreign brands gaining recognition in the local market and positioning themselves within the sector.

However, the fundamental rule of liaison offices in Turkey is that no sale of products or services can be carried out within these units, and no commercial profit can be generated.

In conclusion, the primary purpose of contact offices in Turkey is to build a bridge between foreign brands and the Turkish market, including both sectors and customer bases. For foreign companies planning to enter the Turkish market, opening a liaison office in compliance with the relevant legislation is of vital importance to maintain their presence and activities effectively.

WHAT ARE THE CONDITIONS FOR FOREIGN COMPANIES TO ESTABLISH A LIAISON OFFICE IN TURKEY?

The establishment of a liaison office in Turkey by foreign companies is subject to specific conditions regulated under the Implementation Regulation of the Foreign Direct Investment Law. These requirements are designed to ensure that foreign companies operate in compliance with the Turkish legal framework.

1. The Company Must Be Established Abroad

The company applying to open a liaison office in Turkey must be a legal entity established and operating in a foreign country. This condition guarantees that the liaison office acts on behalf of a company that is already engaged in international business and has recognized legal status.

2. Obtaining Permission from the Ministry

To open a contact office in Turkey, it is mandatory to obtain permission from the Ministry of Industry and Technology. The Ministry determines the scope and duration of the office’s activities. Generally, newly established companies are not granted liaison office permits; at least one year must have passed since the company’s incorporation. However, this requirement is not absolute and may be evaluated within the Ministry’s discretion. If the liaison office engages in activities beyond its permitted scope or conducts commercial business, the Ministry has the authority to close it down.

3. Prohibition of Commercial Activities

Liaison offices in Turkey are strictly prohibited from conducting commercial activities. These offices are limited to representation, promotion, market research, technical support, and information transfer. They cannot sell goods or services through the office, nor can they perform any transaction aimed at generating revenue. Liaison offices are also prohibited from making financial investments or providing guarantees such as pledges or mortgages. This rule clearly emphasizes that liaison offices in Turkey serve only as a preparatory function for foreign companies entering the Turkish market.

4. Submission of Complete and Accurate Application Documents

In applications for the establishment or extension of a liaison office in Turkey, all requested documents and information must be submitted to the Ministry fully and accurately. Any missing or incorrect documentation may result in the rejection of the application. This measure is intended to ensure the legal security of foreign investments in Turkey.

5. Specially Regulated Sectors

In sectors subject to special legislation such as finance, insurance, banking, and capital markets, applications to establish liaison offices are assessed within the framework of sector-specific regulations. The Ministry decides on these applications after receiving the opinions of the relevant institutions and regulatory authorities.

HOW TO ESTABLISH A LIAISON OFFICE IN TURKEY FOR FOREIGN COMPANIES?

Foreign companies wishing to open a liaison office in Turkey are subject to the procedures and principles set forth under Law No. 4875 on Foreign Direct Investment and the Implementation Regulation issued pursuant to this law. Applications within this scope must be submitted to the General Directorate of Incentive Implementation and Foreign Capital of the Ministry of Industry and Technology.

• Documents Required for Liaison Office Establishment Application in Turkey

According to Article 7 of the Implementation Regulation, the following documents must be submitted during the establishment application of a contact office in Turkey:

1. Application Form: Must be duly completed in the format determined by the Ministry.
2. Declaration: Must include the scope of activities to be carried out by the liaison office, a commitment not to conduct commercial activities, and a document proving the signatory’s authority to represent the company.
3. Certificate of Activity of the Foreign Company: An official document proving that the company is still operating. This document must be certified by the relevant Turkish Consulate or approved under the Apostille Convention.
4. Activity Report or Financial Documents: The foreign company’s activity report, balance sheet, or income statement must be attached to the application file.
5. Authorization Document: Authorization for the person(s) appointed to manage the activities of the liaison office.
6. Power of Attorney: If the establishment procedures are carried out by third parties, a notarized and, if required, consular-approved power of attorney must be provided.

• Completion of the Application Process

If all documents are submitted completely and in due form, applications are usually finalized within 15 business days. This period may be extended depending on the examination of the application file and potential requests for additional information or documents.

• Duration and Extension of Liaison Office Permit in Turkey

According to Article 8 of the Implementation Regulation, the Ministry grants operating permits for liaison offices in Turkey for a maximum period of three years. Foreign companies that wish to continue operating their contact office in Turkey must apply for an extension before the expiration of the existing permit. Otherwise, the activities of the liaison office will be terminated.

Opening a liaison office in Turkey is a critical step for foreign companies in terms of conducting market research, developing cooperation opportunities, and gaining visibility in local business circles. However, it is important to emphasize that liaison offices are strictly prohibited from engaging in commercial activities. Therefore, foreign companies must strictly comply with this limitation during both the application process and the operation of the office.

WHAT ARE THE ACTIVITY AREAS OF CONTACT OFFICES IN TURKEY?

Under the Foreign Direct Investment Law and the relevant regulations, liaison offices in Turkey are not allowed to conduct commercial activities or engage in any transaction aimed at generating profit. These offices may only operate within the scope of activities permitted by the Ministry.

The function of a contact office in Turkey is not to carry out direct commercial operations, but rather to focus on market research, information exchange, and coordination between companies.

Liaison offices provide a significant platform for foreign companies to operate in Turkey. However, compliance with the relevant regulations is mandatory. Failure to adhere to these rules may result in the cancellation of activity permits and legal sanctions.

WHAT IS THE ACTIVITY DURATION OF A LIAISON OFFICE IN TURKEY?

For liaison offices established by foreign companies in Turkey, an initial operating permit is granted for a maximum period of three years, limited to the scope of activities declared in the establishment application. Before the expiration of this period, liaison offices in Turkey wishing to continue their operations must apply for an extension to the General Directorate of Incentive Implementation and Foreign Capital of the Ministry of Industry and Technology.

1 – Evaluation of Liaison Office Permit Extension Requests in Turkey

The Ministry conducts a detailed assessment of extension requests submitted by liaison offices in Turkey. The main factors taken into account during this evaluation include:

• The activity report of the liaison office for the previous year,
• The foreign company’s business plan and future objectives for the Turkish market,
• The amount of expenditures made and planned in Turkey,
• The number of employees working in the liaison office.

These criteria aim to demonstrate both the contribution of the liaison office to the Turkish market and the long-term strategic intentions of the foreign company.

2 – In Which Cases Is the Operating Period of a Liaison Office in Turkey Not Extended?

In certain activity categories, it is not possible to extend the operating period of liaison offices in Turkey. In particular:

• Liaison offices established solely for market research,
• Liaison offices authorized to carry out product or service promotion,

cannot benefit from extension rights once their permit period has expired. In such cases, foreign companies wishing to maintain their presence in Turkey must consider alternative structures, such as opening a branch or establishing a company in Turkey.

For an extension request to be approved, all required documents must be submitted fully and accurately. Furthermore, the liaison office’s past performance and future plans are expected to align with the needs of the Turkish market and the objective of contributing to the national economy.

The limited duration of contact offices in Turkey offers foreign companies the opportunity to explore the Turkish market and develop cooperation networks. However, in activity categories where extension rights are restricted, it may not be possible for liaison offices in Turkey to establish a permanent presence. Therefore, foreign companies should carefully consider the temporary nature of liaison offices and their supervision by the Ministry when shaping their long-term strategies in Turkey.

WHAT ARE THE RESTRICTIONS IMPOSED ON LIAISON OFFICES IN TURKEY?

In the Turkish legal framework, liaison offices are distinguished from other company types by their obligation not to engage in commercial activities. Under the Foreign Direct Investment Law and related regulations, these offices may only operate within the specified activity areas and are strictly prohibited from generating any profit. These restrictions define the function of liaison offices as support entities for foreign companies’ activities in Turkey rather than independent commercial operators.

The main restrictions imposed on liaison offices in Turkey are as follows:

1. Activity Duration Restrictions

• At the establishment stage, liaison offices in Turkey are granted an operating permit limited to a maximum of three years.
• Extension requests are evaluated for periods ranging from five to ten years, depending on the declared activity area.
• No changes in the office’s declared activity area are allowed during an extension request. This restriction prevents liaison offices in Turkey from becoming permanent and independent commercial organizations.

2. Asset and Financing Restrictions

Liaison offices in Turkey do not have independent assets. They cannot purchase real estate in Turkey, vehicles, or make investments in Turkey. All operational expenses, salaries, and other costs must be funded by the foreign parent company. This structure ensures that liaison offices remain extensions of the parent company and are prevented from becoming independent economic actors in Turkey.

3. Branch Opening as a Commercial Alternative

Since liaison office in Turkey cannot generate commercial profit, foreign companies seeking a broader, revenue-oriented structure in Turkey may consider opening a branch or establishing a company under Turkish law. Such entities are allowed to engage in commercial activities and acquire independent assets in Turkey. Therefore, when planning long-term strategies, foreign investors must consider the structural differences between a liaison office and a branch or subsidiary.

4. Employment of Personnel

Employment within liaison office in Turkey is permitted, but the relevant administrative approvals must be obtained. The office is responsible for fulfilling social security obligations for its employees. This ensures that liaison offices in Turkey operate in compliance with legal and social security standards.

5. Dependence on the Parent Company

A liaison office in Turkey does not have independent legal personality and operates solely as a representative of the parent company in Turkey. It cannot file lawsuits, initiate enforcement proceedings, or enter into contracts unilaterally in its own name. The contact office’s activities are limited to coordination, information gathering, market research, and organizational support, under the intellectual property rights, trade logos, and trademarks of the parent company.

These regulations ensure that liaison office in Turkey serves only as representative and support entity in Turkey and prevent them from engaging in independent economic activities. Foreign investors must therefore carefully consider the differences between a dependent liaison office and an independent commercial entity (branch or company) when designing their operational structure in Turkey.

The restrictions on liaison offices in Turkey are designed to limit their function to representation, information collection, coordination, and organizational support. For investors seeking broader, profit-oriented operations, alternatives such as opening a branch or establishing a local company are available. Choosing the most suitable structure for strategic goals in Turkey is of critical legal and economic importance.

FINANCING EXPENSES OF LIAISON OFFICE IN TURKEY

Since liaison offices in Turkey are prohibited from engaging in any revenue-generating commercial activities, they are entirely dependent on the parent company abroad for financing under Turkish Company Law. Consequently, all expenses of liaison offices in Turkey are covered through foreign currency transfers from the parent company. This regulation prevents liaison offices from becoming independent economic entities in Turkey and keeps them as extensions of the parent company.

1. Personnel Salaries and Social Security Contributions

All payments related to employees in the liaison office in Turkey, including salaries, overtime pay, severance pay, notice pay, annual leave pay, reinstatement compensation, social security contributions, and other legal obligations, are fully financed by the parent company.

2. Rent and Office Expenses

Costs required to maintain office operations, such as rent, electricity, water, internet, and other operational expenses, are covered through foreign currency transfers.

3. Bookkeeping and Accounting Expenses

Under Turkish law, liaison offices are required to maintain certain ledgers and fulfill accounting obligations. Payments to professionals providing these services are also financed by the parent company.

4. Translation Services

Expenses related to translating documents from foreign languages into Turkish and translation fees for documents used in official communications are funded via foreign currency transfers.

5. Cleaning and Temporary Services

Regular payments for office cleaning and payments to personnel hired for temporary or occasional tasks are included among the costs covered by the parent company.

In summary, all expenses of liaison office in Turkey are covered by the foreign parent company, and financing through revenue generated in Turkey is not permitted. This financing structure prevents liaison offices from becoming independent commercial actors and ensures that they operate solely as representative, coordination, and information-sharing entities in Turkey.

AUTHORITY AND RESPONSIBILITY OF CONTACT OFFICE IN TURKEY

Contact offices in Turkey, while not authorized to generate commercial profit, carry out representation and coordination activities on behalf of foreign companies. Within this framework, the legal status and responsibilities of individuals working in a liaison office in Turkey are determined by the contractual relationship they have with the foreign company.

1. Types of Legal Relationships

Individuals assigned to a liaison office in Turkey may act on behalf of the foreign company under a power of attorney. In this case, the individual operates not as the liaison office itself but as a direct representative of the foreign company. Alternatively, assigned personnel may be directly employed by the foreign company. In such instances, they are considered employees of the foreign company under an employment contract, and labor law and social security obligations in Turkey fall under the direct responsibility of the foreign company.

2. Situation Under Turkish Labor Law

A liaison office is not considered an employer in Turkey. The employing party is the foreign parent company. In the event of termination, claims related to employment rights and worker’s compensation rights must be directed to the parent company. Nevertheless, the liaison office is responsible for ensuring that social security and other legal obligations for personnel in Turkey are fulfilled.

3. Termination of a Liaison Office in Turkey

The termination of a liaison office can occur in two ways. The foreign company may voluntarily terminate the operations of its liaison office in Turkey. In this case, the company must notify the relevant authorities and conduct the closure in accordance with applicable regulations.

A liaison office operating outside the scope of the Ministry-issued permit or engaging in illegal activities may have its permit revoked by the Ministry of Industry and Technology. This type of closure is an administrative sanction and is applied under the Foreign Direct Investment Law Implementation Regulation.

4. Termination Process and Legal Requirements

The closure of a liaison office in Turkey is subject to specific legal procedures. First, a “cessation of operations inspection form” must be obtained from the tax office and submitted to the General Directorate of Incentive Implementation and Foreign Capital of the Ministry of Industry and Technology.

Moreover, apart from any balances resulting from closure or liquidation, liaison offices cannot request any transfers. The legal basis for these procedures is clearly stated in Article 8/e of the Foreign Direct Investment Law Implementation Regulation.

Liaison offices are designed as structures limited to specific activities and not generating commercial profit. Their expenses are entirely financed by the foreign parent company, and their representative authority is evaluated under the legal responsibility of the foreign company rather than an employer-employee relationship. Any exceeding of permitted activity boundaries or non-compliant operations may result in the closure of the office, following both administrative and legal procedures.

HOW LONG DOES IT TAKE TO ESTABLISH A LIAISON OFFICE IN TURKEY?

The process of establishing a liaison office in Turkey can be completed in a relatively short period if all required documents are prepared accurately and completely.

The evaluation of the relevant applications is generally finalized within 15 to 20 days. However, this period may vary depending on:

• The completeness of the application file,
• Whether the documents are legally compliant and correctly submitted,
• The nature of the Ministry’s review process.

Therefore, it is crucial to follow proper procedures during the application stage to ensure that the process is completed within the anticipated timeframe.

CAN LIAISON OFFICES ENGAGE IN SALES ACTIVITIES IN TURKEY?

Liaison offices in Turkey are not allowed to conduct sales activities. Under Turkish legislation, these offices are established solely for representation and information-gathering purposes, and engaging in commercial activities is strictly prohibited. The scope of their activities is therefore limited to conducting market research, gathering information on local market dynamics and emerging trends, providing technical support to the foreign company, and supervising relationships with local suppliers.

As a result, a liaison office in Turkey cannot sell products, enter into contracts, or generate commercial profit. Nevertheless, liaison offices can direct potential business connections and customer relationships to the foreign parent company, while all sales and commercial activities remain under the responsibility of the parent company. Additionally, contact offices in Turkey are required to comply with data protection and privacy obligations in accordance with the Turkish Personal Data Protection Law (KVKK) in the course of their operations.

CAN A FOREIGN WORKER BE EMPLOYED IN A CONTACT OFFICE IN TURKEY?

Employment of foreign worker in a liaison office in Turkey is possible only within the framework of strict legal regulations and specific restrictions. The main purpose of these rules is to protect the local workforce while ensuring a balanced integration of foreign investments into the Turkish labor market. As a general rule, for the employment of each foreign worker, the company is required to employ at least five Turkish citizens. This requirement is part of the foreign work permit policies implemented by the Ministry of Labor and Social Security, aiming to maintain balance in the Turkish labor market.

However, the Foreign Direct Investment Law and related regulations provide certain exceptions. In particular, the so-called “key personnel” exemption has been introduced to enable international companies to meet their managerial and technical needs in their Turkish operations.

Key personnel refers to senior employees who play a role in the strategic management of the company, have the authority to supervise administrative or technical staff, take part in important decision-making processes, and possess expertise regarding the company’s products, services, or technical know-how. Thus, these individuals are not ordinary employees but professionals who are considered indispensable for the company’s global strategies.

With respect to liaison offices, specific restrictions apply to the employment of key personnel. Accordingly, only one foreign key personnel is allowed to be employed in a liaison office. Moreover, the foreign parent company must have transferred at least USD 200,000 or its equivalent in foreign currency to Turkey within the previous year. This requirement both ensures that the foreign investor makes an economic contribution to Turkey and guarantees that only serious and sustainable investments are supported.

The work permit application process for foreign worker in Turkey is also quite detailed. An electronic application must be submitted to the Ministry of Labor and Social Security, together with the following documents:

• The activity permit obtained for the liaison office,
• Passport, CV, and diploma information of the foreign employee,
• An authorization document issued by the foreign parent company,
• Documents proving the transfer of foreign currency to Turkey.

Applications are generally finalized within 30 days, although the period may be extended in cases of missing documents or special review requirements.

In conclusion, the employment of foreign personnel in liaison offices in Turkey is highly limited. Such employment is possible only under the “key personnel” definition and restricted to one person. Therefore, if foreign investors require the employment of a broader number of foreign staff in Turkey, it would be more appropriate to establish a branch office or set up a local company.

LOCAL EXPENDITURES OF LIAISON OFFICES IN TURKEY

The financial transactions and expenditures of liaison offices in Turkey are subject to strict regulations under Turkish law. According to the relevant legislation, all funds used to finance the activities of liaison offices must be transferred by the foreign parent company. Therefore, it is prohibited to send Turkish Lira (TRY) directly to a liaison office. Funds may only be transferred in foreign currency, which can then be converted into TRY when necessary for local payments.

Nevertheless, certain exceptions are provided for local expenditures. In particular, routine expenses such as rent, electricity, water, natural gas, meals, transportation, as well as mandatory payments such as Social Security Institution (SGK) contributions of employees, must be made in TRY.

In line with this legal framework, it has become mandatory in practice for liaison offices to open two separate bank accounts in Turkey:

• Foreign Currency Account: Used for receiving funds transferred from the parent company abroad. Only foreign currency transfers from the parent company may be deposited into this account.

• Turkish Lira Account: Used for converting funds from the foreign currency account into TRY in order to cover local expenses and SGK contribution payments.

In addition, a regulatory amendment dated 26 November 2019 introduced an additional obligation for liaison offices in Turkey. Accordingly, liaison offices are required to open an account with a state-owned bank for the payment of SGK contributions and, if necessary, tax obligations. This measure aims to strengthen the integration of liaison offices into Turkey’s social security and tax systems.

In conclusion, in order to fulfill their financial obligations in Turkey, liaison offices are required to:

• Open at least two separate bank accounts (a foreign currency account and a TRY account),
• Additionally, maintain a mandatory account in a state-owned bank.

This practice both enables the monitoring of foreign currency movements in Turkey and ensures that liaison offices comply with their social security and tax obligations.

OBLIGATIONS AND LEGAL RESPONSIBILITIES OF A LIAISON OFFICE IN TURKEY

The legal obligations of liaison offices in Turkey are of great importance both in terms of tax regulations and legal audit requirements. These obligations are designed to ensure that the activities of liaison offices in Turkey are carried out lawfully and transparently. The main obligations can be summarized as follows:

1. Documentation of the Expenses of the Liaison Office

The contact office in Turkey is required to meet its expenses from foreign currency transferred from abroad. Documenting these expenses is crucial for proper accounting procedures. The liaison office must ensure that these expenses are supported by bank receipts and store the documents properly for later submission if necessary. Bank receipts are the most important documents that prove the expenses were made with foreign currency sent from abroad. Proper and organized storage of such documents facilitates tax audits and legal inspections.

2. Preparation and Submission of the Annual Activity Report

Liaison offices in Turkey are obliged to fill out an Information Form about the previous year’s activities and submit this report to the relevant authority every year. Contact offices in Turkey must submit their activity reports by the end of May at the latest. This report summarizes all the activities carried out during the previous year and is considered a key document for auditing by the relevant authority.

3. Auditing and Practices

The Ministry may audit the liaison office in Turkey to verify whether they are conducting their activities in line with the scope stated in their permits, either on its own initiative or based on notifications from relevant institutions. Liaison offices found to be operating outside the scope of their permit are given 30 days to apply for the appropriate permit. This period can be extended by a maximum of 30 more days for justified reasons. At the end of the period, those who do not apply will have their permits revoked.

In conclusion, for a liaison office in Turkey, it is essential to:

• Maintain complete and documented expense records,
• Submit annual activity reports accurately and on time,
• Comply with inspections and legal audits.

Fulfilling these obligations ensures not only the proper discharge of legal responsibilities but also enables the office to operate in Turkey in full compliance with the law.

IS THERE A TAX EXEMPTION ON SALARY PAYMENTS TO WORKERS IN A LIAISON OFFICE IN TURKEY?

Salary payments made to personnel working in liaison offices in Turkey are subject to specific legal regulations and exceptions. To make these payments correctly, foreign companies must comply with Turkish tax legislation. Below are the key regulations related to personnel payments in a liaison office in Turkey.

a. Income Tax Exemption on Salary Payments to Personnel

Employees working for foreign employers whose legal and business headquarters are not located in Turkey are exempt from income tax on their salaries, provided that they are paid in foreign currency based on the employer’s income generated outside Turkey. This exemption applies only to payments made by the foreign parent company in foreign currency. It is mandatory that such payments are transferred directly from abroad into the employees’ bank accounts.

To prove the accuracy of these payments and transfers, it is necessary to obtain and regularly keep documents such as bank receipts, foreign exchange purchase certificates, and international transfer receipts. These documents serve as the primary evidence for the application of the income tax exemption.

b. Stamp Tax Deduction

Pursuant to the Stamp Tax Law, it is mandatory to withhold stamp tax from the salary payments made to employees working in liaison offices in Turkey. This deduction must be declared through a withholding tax return and paid within the legal deadline. Stamp tax serves as a legal requirement ensuring the validity of salary payment documents, and failure to comply with this obligation may result in penalties and legal consequences.

c. Social Security Coverage for Workers

Employees working in liaison offices in Turkey must be registered under the Social Security Law. The offices, in their capacity as limited liability employers, are obliged to regularly pay the social security premiums of their employees. This obligation must be fulfilled prior to the registration of the employee as an insured worker, and the employment commencement and termination notifications must be accurately submitted to the institution. Otherwise, failure to pay the social security premiums may result in legal liability under Turkish Labor Law.

d. Workplace Notification

Liaison offices in Turkey are required to notify the relevant Social Security Provincial Directorate about their workplace before their employees start working as insured workers. This notification is necessary for the fulfillment of the workplace’s social security obligations, and failure to do so can result in legal penalties.

In conclusion, payments made to workers and personnel in liaison offices in Turkey are subject to certain tax and social security regulations. Compliance with income tax exemptions, stamp duty deductions, social security obligations, and workplace notifications ensures that foreign companies’ operations in Turkey continue in a proper legal framework. Therefore, it is essential for a liaison office in Turkey to fulfill all legal requirements when employing personnel.

ADVANTAGES OF OPENING A LIAISON OFFICE IN TURKEY FOR FOREIGN COMPANIES

Opening a liaison office in Turkey offers foreign companies both financial and operational advantages in Turkey. These advantages can be summarized as follows:

1. Tax Advantages of Liaison Offices in Turkey

Since liaison offices in Turkey do not engage in direct commercial activities, they are exempt from certain taxes. These exemptions include:

• Value Added Tax (VAT)
• Corporate Tax
• Income Tax (applies only to employees)
• Stamp Tax

These tax exemptions make liaison offices a highly attractive structure from a financial perspective. However, to ensure accurate evaluation of tax-related matters, it may be necessary to seek the support of a tax law attorney in Turkey.

2. Tax Declaration Obligations of Liaison Offices in Turkey

Liaison offices in Turkey are obliged to regularly submit a withholding tax return; however, they are not required to make any payments under this return. This arrangement facilitates the operational processes of the offices and reduces their financial obligations.

3. Low-Cost Entry Opportunity

For foreign companies that want to enter the market with a sector-appropriate budget, establishing a contact office in Turkey is a low-cost and strategic solution. Through this structure, companies can gather market information and complete their operational preparations before starting business activities in Turkey without incurring high investment costs.

4. Market Research and Customer Analysis

One of the key ways to achieve success in the local market is to accurately analyze market dynamics and customer expectations. Liaison offices provide foreign companies with the following advantages:

• The opportunity to examine market conditions and sectoral dynamics in Turkey
• The ability to analyze customer demands and preferences
• The chance to operate effectively within the sector

5. Providing Technical and Customer Support

Liaison offices in Turkey offer a significant advantage in providing effective and rapid customer support. Particularly in sectors requiring technical support, they can:

• Respond to customer needs promptly and on-site
• Provide technical support and training related to products
• Offer after-sales services quickly

This enhances customer satisfaction and helps the company gain a strong reputation in the local market.

6. Sectoral Success and Image Building

Establishing a professional image in the local market and achieving a strong position in the sector is possible through liaison offices. A liaison office in Turkey that operates with effective strategies lays a solid foundation for future, more comprehensive commercial ventures.

In conclusion, establishing a liaison office in Turkey is considered a strategic step for foreign companies before commencing commercial activities in Turkey. Its tax advantages, low-cost market entry, facilitation of local market analysis, and capacity to support customer relations provide companies with significant financial and operational benefits.

KEY DIFFERENCES BETWEEN A LIAISON OFFICE AND A BRANCH

In the process of foreign companies investing in Turkey, deciding whether to establish a liaison office or a foreign company branch in Turkey is a critical step. This choice directly affects the company’s administrative and financial obligations. Liaison offices are generally set up for market research, representation, and commercial preparation activities, whereas branches are intended to conduct direct commercial operations. Making the wrong choice can lead to significant administrative and financial consequences, so it is important to seek support from a commercial law attorney in Turkey in this regard.

Liaison offices in Turkey are established solely to provide promotion, research, and communication support without engaging in commercial activities or generating revenue, whereas branches are a more suitable option for companies that wish to conduct independent commercial activities in Turkey or for foreign companies intending to purchase immovable property in Turkey. The strategic objectives and scope of activities of the foreign company play a decisive role in determining which structure should be chosen.

SUPPORT SERVICES FOR ESTABLISHING A LIAISON OFFICE IN TURKEY FOR FOREIGN COMPANIES

C&B Law Firm provides comprehensive legal advisory and implementation support for foreign companies seeking to establish a liaison office in Turkey. The services offered by C&B Law Firm and their respective steps are detailed as follows:

1. Preparation of the Application File: Based on the foreign company’s request to establish a contact office in Turkey, C&B Law Firm obtains the necessary documents and conducts a legal review to ensure compliance with all regulatory requirements. After this review, the application file is prepared and made ready for submission to the relevant authorities.
2. Application for Establishment Permit: The required permit for opening the liaison office in Turkey is obtained from the Ministry of Economy. C&B Law Firm provides legal guidance at every stage of the application, ensuring a smooth process and handling all necessary procedures to secure approval.
3. Registration with the Tax Office: The liaison office is registered with the relevant tax office in Turkey, and a tax identification number is obtained on behalf of the office. This step is critical for fulfilling the office’s tax obligations in Turkey.
4. Establishment of Tax Liability: Using the tax identification number obtained from the tax office, C&B Law Firm ensures the liaison office is registered for income tax (withholding) and other relevant taxes. Guidance is provided to ensure the correct payment of taxes on personnel salaries, office rent, and other expenses.
5. Preparation of Lease Agreement: The lease agreement required for the liaison office in Turkey is prepared and included in the application file submitted to the relevant authority. C&B Law Firm reviews the lease agreement for legal validity and regulatory compliance.
6. Notification of Address Change: If the liaison office’s address changes, C&B Law Firm provides legal guidance to ensure that the new address is notified to the relevant authority within one month. All necessary documents are prepared to complete the official process.

C&B Law Firm manages all stages of the liaison office establishment process in Turkey, ensuring that documents are correctly prepared and applications are submitted on time. The firm provides the legal support necessary for foreign companies to commence their operations in Turkey within a fully compliant legal framework.