1) Set up a Liaison Office
Nature and Activities
Liaison offices are not allowed carrying on any commercial activities in Turkey and its activities limited to non-commercial activities such as;
collecting information about investment opportunities in Turkey, preparing feasibility and market research studies about Turkish Market,
gathering information on the Turkish Economy and providing information about parent company and its products. Permission is required to
establish Liaison Office from Foreign Investment Department under the Turkish Prime Ministry and the permits are granted renewable
for three years. Liaison Office is not subject to income tax because it is not permitted to generate any income from its activities.
All the expenses generated by the liaison office have to be paid by aboard with foreign currency.
Establishment formalities, registration with tax authority and notification to the Treasury
Liaison offices are not allowed carrying on any commercial activities in Turkey and its activities limited to non-commercial activities such as;
collecting information about investment opportunities in Turkey, preparing feasibility and market research studies about Turkish Market,
gathering information on the Turkish Economy and providing information about parent company and its products. Permission is required to
establish Liaison Office from General Directorate of Foreign Investment Department under the Turkish Prime Ministry and the permits are
granted renewable for three years. Steps in establishment of a liaison office are as follows:
A commitment letter specifying that all the expenses of the liaison office shall be provided from abroad by transferring foreign currency into Turkey
(notarized and apostilled);
The parent company's certificate of activity provided from the Trade Registry or Chamber of Commerce
where the parent company is registered (notarized and apostilled)
A board resolution of the parent company for the incorporation of a representative office in Turkey (notarized
and apostilled);
The most recent annual report of the parent company including its balance sheet and profit/loss statement
(notarized and apostilled);
A power of attorney granted to the person who will conduct the activities of the representative office
(notarized and apostilled);
A detailed explanation with respect to (a) the business to be conducted by the representative office,
(b) the number of personnel to be employed by the same and (c) the estimated expenses to be made in one year.
The regulated sectors, the process of liaison office establishment is subject not only to the Law, but also to the applicable sector-specific legislation.
The relevant regulatory body e.g., the Capital Markets Board, the General Directorate of Insurance of the Treasury, the Banking Regulation
and Supervision Agency is the competent authority in such process.
Once an establishment permit is issued, the liaison office has to be registered with the respective Tax Authority and obtain a tax registration number.
Subsequently, it has to send a copy of its tax office registration documents to the Treasury within one month from its registration
with the Tax Authority, at the latest.
Liaison offices are also required to send annually the “Data Form for Liaison Office Activities”
to the Treasury until the end of May, at the latest. Such form aims to provide information on the liaison office’s activities occurred
within the previous year. Documents evidencing that the office expenses have been covered by the funds transferred
from abroad have to be enclosed to such form.
Term
A liaison office establishment permit may be issued for a maximum period of three years.
Upon its expiry, an application may be made for the extension of its term for an additional period of three years.
When assessing such application, the Treasury takes into account the previous years’ activities of the
relevant liaison office together with its future projects and objectives.
Expenses and transfer of profit
Any and all office expenses have to be covered by the foreign exchange imported from abroad.
Since liaison offices cannot engage in income-generating activities, there would never be a transfer of profit.
