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Opening a Liaison Office Abroad for a Turkish Company

For companies based in Türkiye opening a liaison office or representative office abroad: defining the scope of activities, local registration, transferring expenses, and the accounting and tax assessment in Türkiye.

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Overview

Before carrying out commercial activities abroad directly, companies in Türkiye may open a liaison office (irtibat bürosu) or a representative office (temsilcilik) to get to know the market, follow up business contacts or represent the company. Whether a liaison office can be opened, which activities it may carry out and the registration conditions are determined by the law of the country where the office is to be opened. In many countries, liaison offices are restricted from carrying out commercial activities; for this reason, the scope of activities is defined in advance according to that country’s rules.

Persons resident in Türkiye are free to establish liaison offices, representative offices and similar units abroad, and the transfer of their establishment costs and operating expenses by banks is also free. (Decree No. 32 on the Protection of the Value of the Turkish Currency, Art. 13/2)

Local registration procedures are carried out by local advisers authorised in the country concerned, in accordance with that country’s legislation. At KEYBIZ CPAs & Advisors, we follow up the resolution, transfer, accounting and tax procedures on the Türkiye side.

Differences Between a Liaison Office, a Branch and a Company

Liaison OfficeBranch or Company
ActivitiesMay be considered for activities such as market research, promotion and communication; which activities are permitted varies according to the legislation of the target countryUnder which model activities such as sales, concluding contracts, invoicing or services for a fee are permitted is examined separately in the target country
Legal StructureAttached to the company in Türkiye; registration and operating conditions vary by countryA branch is a place of business (işyeri) of the company in Türkiye; a company has a separate legal personality
Money TransfersEstablishment costs and operating expenses are transferred through banks (Decree No. 32, Art. 13/2)Cash capital is exported through banks and in-kind capital in accordance with customs legislation; an information form is submitted within three months following the first capital export (Decree No. 32, Art. 13/1; Communiqué No. 2008-32/34 on Decree No. 32, Art. 10)
Tax in the Target CountryWhether a permanent establishment (işyeri) arises is assessed according to the office’s actual activities, the legislation of the target country and any applicable double taxation treaty. Exemptions for preparatory or auxiliary activities differ by country and treatyFor branch profits or participation income, the exemption conditions in the Corporate Tax Law No. 5520 (Kurumlar Vergisi Kanunu, KVK), Art. 5/1-g and 5/1-b, are assessed in Türkiye
Opening a Branch Abroad for a Turkish Company

Process for Opening a Liaison Office Abroad

  1. Defining the Scope of Activities and the Country

    • The activities the office will carry out are defined, and it is examined whether the target country permits these activities under the liaison office model.
    • Whether a permanent establishment will arise in the target country is assessed by taking into account the office’s actual activities, the country’s legislation and any applicable double taxation treaty. For the treaties, see the Turkish Revenue Administration (GİB) – International Legislation page.
    • If staff are employed, payroll and social security obligations in the target country are assessed separately.

  2. Resolution of the Company in Türkiye and Documents

    The authorised body of the company resolves to open the office and appoints the persons who will represent it. If the target country requires it, procedures such as an apostille, consular legalisation or translation are carried out for the resolution and the company documents; the documents required vary by country.

  3. Local Registration or Authorisation Procedures

    The registration or authorisation of the office is carried out by local advisers authorised in the country concerned, in accordance with that country’s legislation. The documents and time frames required vary by country and are checked against that country’s official sources.

  4. Transfer of Establishment and Operating Expenses

    Persons resident in Türkiye are free to establish liaison offices and representative offices abroad, and the transfer of their establishment costs and operating expenses by banks is also free. (Decree No. 32, Art. 13/2)

    The three-month notification period in Article 10 of Communiqué No. 2008-32/34 on Decree No. 32 runs from the first export of cash or in-kind capital made to establish a company abroad, to become a shareholder in existing companies or to open a branch. (Communiqué, Art. 10) The ordinary transfer of a liaison office’s expenses is not listed in this article. As other notifications may be required in Türkiye or in the target country depending on the structure and the transactions, these obligations are checked separately.

  5. Accounting and Tax Assessment

    • The transfer document and the expense document are separate: A bank transfer receipt shows that the money was sent; the expense itself is evidenced separately with documents such as a lease agreement, an invoice or payroll records. (Tax Procedure Law No. 213 (VUK), Art. 227)
    • Recording and deduction are separate: Recording an expense in the accounts does not mean that it can be deducted from the tax base. In determining net corporate income, the business income provisions of the Income Tax Law No. 193 (GVK) apply; for an expense to be deductible, it must relate to earning and maintaining business income and must be documented. (KVK, Art. 6, GVK, Art. 40/1) Each expense is assessed separately in this respect.

    For details, see our International Tax and Accounting and Bookkeeping pages.

Frequently Asked Questions

Can a Liaison Office Abroad Carry Out Commercial Activities?

This depends on the legislation of the target country. If sales, concluding contracts or invoicing are planned, it is examined separately in the target country under which registration or establishment model these activities are permitted.

How Are the Office’s Expenses Sent from Türkiye?

For persons resident in Türkiye, the transfer by banks of the establishment costs and operating expenses of their liaison offices and representative offices abroad is free. (Decree No. 32, Art. 13/2)

Should a Liaison Office or a Branch Be Opened?

Which activities a liaison office can carry out varies according to the legislation of the target country. For market research, promotion and communication activities, the representative office model may be considered. If sales, concluding contracts, invoicing or providing services for a fee are planned, it should be examined separately in the target country under which registration or establishment model these activities are permitted. For details, see our Opening a Branch Abroad for a Turkish Company and Company Formation Abroad for Turkish Companies and Investors pages.

Does a Liaison Office Give Rise to Tax in the Country Where It Is Opened?

Whether the office creates a permanent establishment in the target country is assessed according to the office’s actual activities, the country’s legislation and any applicable double taxation treaty. Exemptions for preparatory or auxiliary activities vary by country and treaty. If staff are employed, payroll and social security obligations in the target country are assessed separately.

Who Handles the Procedures in the Target Country?

The registration or authorisation of the office in the target country is carried out by local advisers authorised in that country. KEYBIZ CPAs & Advisors follows up the resolution, transfer, accounting and tax procedures on the Türkiye side. As the process and documents vary by country, each request is assessed separately.

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