Foreign companies need to work with experienced lawyers in order to continue their branch opening operations in Turkey in a healthy way. Of course, it is also important to know the subject in general terms.
Below, we have mentioned all the important points that should be known about the opening of branches of foreign companies in Turkey and the most frequently asked questions in practice. Since we are talking about a process that should be followed carefully, we recommend that you read our article in order.
The opening of a branch in Turkey by foreign companies is the establishment of a branch of any company located in a country other than Turkey to operate in Turkey. foreigners; Establishing a company in Turkey, opening a branch in their company or establishing a liaison office, etc. always have different procedures. In our article, we include the procedure for opening a branch.
It should be noted that the most important condition for foreign companies to open branches in Turkey is the condition that their capital is divided into shares.
In accordance with Article 40 of the Turkish Commercial Code, branches of foreign companies in Turkey are registered as domestic commercial enterprises. A commercial representative residing in Turkey is appointed for the branches we have mentioned. If there is more than one branch, they are registered like the branches of a commercial enterprise in Turkey.
The procedures for opening a branch in Turkey for foreigners begin with a number of bureaucratic application procedures. It is possible to rank the operations as follows:
IMPORTANT!: Opening a branch in Turkey is a more difficult and costly process than the establishment of a company. Therefore, if possible, it may be considered to establish a company instead of opening a branch. You can also get service from us in this regard.
Branch establishment of foreign companies is in this way. It is also possible to open other branches. These branches, which are opened later, are called secondary branches attached to the first opened central branch.
If it is desired to open other branches in this way, they must apply to the Ministry of Industry and Trade, General Directorate of Domestic Trade and obtain the necessary permits for these branches.
Tax Responsibility of Branches Opened in Turkey by Companies Headquartered Abroad; Companies of foreign origin, whose headquarters are located abroad, when they open a branch in Turkey, are faced with a number of tax responsibilities as well as many responsibilities.
Turkey has agreements with nearly 80 countries in order to avoid heavy taxation of foreign investors and companies. Countries with high potential investors such as Germany also buy when they are among the countries of this agreement. In this context, double taxation is avoided. In other words, the position of the company in terms of taxation and what taxes it pays in the country of origin are also important.
Although it varies depending on the commercial activity of the branch, branches that make profits in Turkey become taxpayers. Therefore, there is tax liability for the following tax types:
To repeat, the tax liability for the branch of the foreign company in Turkey is determined according to the characteristics of the concrete case within the scope of its activities. Consultation with a lawyer should be sought in this regard.
A fully authorized attorney is required for foreign companies to open branches and continue their activities in Turkey. The residence of this attorney must be in Turkey. In some cases, this proxy may need to be changed. Resignation, impeachment, death etc. In such cases, a new deputy must be appointed. In addition, the number of deputies can be increased.
If changes will be made within the borders of the same trade registry office; The change should be registered directly with the trade registry and the Ministry of Industry and Trade, General Directorate of Domestic Trade should be informed about this issue.
If it is transferred to an address within the borders of another trade registry office; In the original and translated copies of the amendment, together with the decision taken by the authorized body of the company, an application must be made to the Ministry of Industry and Trade, General Directorate of Domestic Trade, and permission must be obtained for the transfer.
The manager appointment procedures for the Turkish branch of the commercial enterprise whose head office is outside of Turkey must also be notified to the Chamber of Commerce.
If a capital increase is to be made, an application is made to the Ministry for permission. Necessary applications are made through the MERSIS system for notification to the chamber and the following documents are collected:
As Turkey is developing, it provides many new opportunities to foreign investors. Although the opportunity to establish all kinds of companies is provided, the requirement for a very high amount of pre-capital has now been abolished.
It is a country that attracts the attention of foreign investors in terms of workforce and investment potential. In addition, as we mentioned above, foreign investors are protected by many international agreements in terms of taxation.
Therefore, foreign companies that want to open branches in Turkey often have the same opportunities as Turkish citizens, and in some cases even more.
Branches of foreign companies in Turkey are obliged to use the title of their headquarters by adding the name of the place where their headquarters are located and the place where the branch is located. If the title of the company headquarters is to be changed, the title of the branch should also be changed.
Liaison office, unlike the branch, does not carry out commercial activities and carries out some market research, information transfer, promotion, etc. purpose organizations. Therefore, foreign companies opening branches in Turkey and liaison offices are subject to very different provisions.
In this article, we do not go into the details of the liaison office. Regarding this, you can review our article titled "Foreign companies to open a liaison office in Turkey".
Above, we talked about the legal procedure to be followed for foreign companies to open branches in Turkey. However, it should be noted that this is not always the case. In the concrete case, the relevant company must make a preliminary research and complete the legal deficiencies in order to open a branch.
In order to avoid legal problems in the long run, it must initially perform its legal transactions in accordance with the law. For this reason, it is very important to get the help of Financial Advisor and Lawyer. Therefore, it is necessary to work with Financial Advisors and law offices that are experienced in the field of foreigners' law and have foreign language elements.
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