Expert Tips for Turkish Branch Office Formation

Turkish branch office formation involves several critical steps and meticulous planning to ensure compliance with local regulations. The process begins with the preparation of essential documents, such as the parent company’s resolution, certificate of incorporation, articles of association, power of attorney, and detailed information about the branch office manager.

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These documents are submitted to the Turkish Trade Registry, which, upon approval, requires further registration and publication in the Trade Registry Gazette. Securing a tax identification number and opening a corporate bank account in Turkey are also crucial steps.

Additionally, if foreign staff are involved, appropriate work permits and visas must be obtained. The branch office must comply with Turkish commercial, tax, and labor laws, ensuring proper financial record-keeping and regular tax filings.

It is also responsible for operational reporting to the parent company and adhering to Turkish employment regulations, including employee rights and benefits. By navigating these requirements, a branch office can effectively function as an extension of the parent company, leveraging the dynamic Turkish market while maintaining alignment with corporate governance and policies.

Finlexia Accounting Firm specializes in facilitating Turkish branch office formation, offering comprehensive support to ensure your business’s compliance and success.

Turkish Branch Office Formation: How to Do It?

Since its establishment in 2017, Finlexia Accounting Firm has been a leading provider of accounting services in Turkey. Our expertise spans various domains, including the formation and management of branch offices for foreign companies.

What is Turkish Branch Office Formation?

A branch office in Turkey is an extension of a parent company that operates in a foreign country. It carries out business activities within Turkey while remaining legally dependent on the parent company. This structure allows foreign companies to enter the Turkish market without the need to establish a separate legal entity.

How to Form a Branch Office in Turkey

Prepare the Required Documents:

• Resolution from the Parent Company: A decision by the parent company’s board authorizing the establishment of a branch in Turkey.
• Certificate of Incorporation: A certified copy of the parent company’s certificate of incorporation.
• Articles of Association: A certified copy of the parent company’s articles of association.
• Power of Attorney: A notarized power of attorney appointing a representative for the branch office in Turkey.
• Branch Office Manager’s Information: Details of the person who will manage the branch office, including their identification and residence information.

Obtain Necessary Approvals:

• Trade Registry Application: Submit the required documents to the Turkish Trade Registry. The application must include a declaration of establishment, the branch office manager’s declaration of acceptance, and a certified translation of the parent company’s articles of association and certificate of incorporation.
• Ministry Approval: For certain industries, approval from the relevant Turkish Ministry may be required.

Register with the Trade Registry:

Upon approval, the branch office must be registered with the Trade Registry. This includes publishing the establishment in the Trade Registry Gazette and obtaining a tax identification number from the local tax office.

Open a Bank Account:

A corporate bank account must be opened in Turkey for the branch office to manage its financial transactions.

Obtain Work Permits and Visas:

If foreign staff are to be employed, appropriate work permits and visas must be secured.

Responsibilities of a Branch Office in Turkey

A branch office in Turkey must comply with various legal and regulatory obligations, which include:

Compliance with Local Laws:

The branch office must adhere to Turkish commercial, tax, and labor laws. This includes maintaining proper financial records and submitting regular tax filings.

Operational Reporting:

Regular reporting to the parent company is required, including financial statements and performance reports.

Employment Regulations:

Comply with Turkish labor laws regarding employee rights, benefits, and working conditions.

Taxation:

The branch office is subject to Turkish corporate tax on its profits. It must also handle value-added tax (VAT) and other applicable taxes.

Corporate Governance:

The branch office must operate under the governance framework established by the parent company, ensuring alignment with overall corporate policies and objectives.

We Can Complete a Turkish Branch Office Formation within 3 Weeks

We can finish Turkish branch office formation within 3 weeks, we have established more than 260 companies for our foreign clients from Spain, UAE, Ukraine, Russia, UK, Morocco, Lebanon, Syria, S. Korea, Germany, Italy, Jordan, Vietnam, Poland, France, Pakistan, China, Hong Kong, USA, Malaysia, Iran, Portugal, Norway, Canada, Saudi Arabia, Iraq, and Kuwait.

How to Set up a Branch Office in Turkey?

A Turkish branch office or a non-Turkish company branch has autonomous capital and accounting to carry out commercial transactions with third parties, although they are closely associated with the parent company in respect of internal management. This means that rights, debts, profits, and losses of the branch offices are assumed by the parent company.

A branch office can only engage in activities of its parent company. It cannot provide goods and services or engage in any commercial activities that are not specified in the parent company’s articles of association.

Although there is no legal capital requirement for branch offices, it is required that the incorporating company maintains a capital sufficient to run the branch office in practice.

A branch office shall use the same corporate name as that of the parent company by indicating that it is a branch office and also contain the location of the head office and the branch office.

A fully authorized branch office manager residing in Turkey needs to be appointed to run the day-to-day business of the branch office. If the manager is Turkish it will be easier, if he is a foreigner, we must obtain residency for him at first.

For a Turkish branch office formation, we will file our application with the below documents at the Ministry of Trade in Ankara. Once the branch office license is granted, then we will proceed to finalize formation procedures at the local chamber of commerce and the tax office.

We Need the Following Documents for a Turkish Branch Office Formation

• Mother Company’s Articles of Incorporation*
• Mother Company’s Good Standing document*
• The Company’s resolution to open a branch in Turkey (We will provide the text)
• Power of Attorney* given to the director (We will provide the text)
• Signature statement of a company director (We will get it done here)
• Passport copy of a foreign director. There must be one Turkish resident director.
• All required documents to set up a branch in the Mother Company’s home country.
• 3 photos of directors

*These documents should either be apostilled or certified by Turkish consulates in the country where the mother company is registered. All of the approved documents should be notarized and translated into Turkish.

Reach us for Branch Office Formation in Turkey

Forming a branch office in Turkey allows foreign companies to establish a presence in a dynamic and growing market. While the process involves several legal and administrative steps, Finlexia Accounting Firm provides comprehensive support to streamline the formation and management of branch offices.

For more detailed assistance and expert guidance on establishing a branch office in Turkey, please contact Finlexia Accounting Firm. We are committed to helping your business succeed in the Turkish market.

You may reach our accountants and lawyers for a Turkish branch office formation by visiting our Contact page.