Full Details of Establishing a Liaison Office in Turkey

Establishing a liaison office in Turkey is a strategic move for foreign companies aiming to expand their presence in the Turkish market without engaging in direct commercial activities.

A liaison office, approved by the General Directorate of Incentive Implementation and Foreign Investment (GDIIFI), serves as a vital link between the parent company and Turkish businesses, facilitating market research, promotion, and coordination.

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The process involves obtaining the necessary approvals, registering with the local tax office, and securing work permits for foreign employees if required.

The responsibilities of a liaison office include gathering market intelligence, promoting the parent company’s products or services, managing public relations, ensuring smooth communication and coordination, providing administrative support, and complying with Turkish regulations.

Regular reporting to the GDIIFI is mandatory to keep the authorities informed about the office’s activities. By establishing a liaison office, foreign companies can gain valuable insights and build strong business relationships in Turkey.

Finlexia Accounting Firm offers expert guidance and comprehensive services to assist in the establishment and efficient management of liaison offices, ensuring compliance with local regulations and contributing to the company’s strategic goals.

Establishing a Liaison Office in Turkey: What It Is, How to Do It, and Its Responsibilities

What is a Liaison Office in Turkey?

A liaison office in Turkey is a representation of a foreign company established to facilitate business activities without engaging in direct commercial operations.

It acts as a communication channel between the parent company and Turkish counterparts, gathering market information, promoting the parent company’s products or services, and coordinating business activities.

How to Establish a Liaison Office in Turkey

Step 1: Obtain Approval

To establish a liaison office, the foreign company must first obtain approval from the General Directorate of Incentive Implementation and Foreign Investment (GDIIFI) under the Ministry of Industry and Technology. This requires submitting the following documents:

• A detailed application form.
• A statement of commitment indicating that the office will not engage in commercial activities.
• The parent company’s articles of association, translated into Turkish and notarized.
• A power of attorney appointing the person responsible for the liaison office.

Step 2: Register the Office

Once approval is granted, the liaison office must be registered with the local tax office and the Social Security Office. Required documents include:

• A notarized lease agreement for the office premises.
• Proof of the office address.
• Identification and residence information of the liaison office manager.

Step 3: Obtain Work Permits (if necessary)

If foreign employees will be working in the liaison office, work permits must be obtained for them. This involves submitting applications to the Ministry of Labor and Social Security, including:

• Passport copies.
• Employment contracts.
• Educational certificates and relevant professional qualifications.

Responsibilities of a Liaison Office

A liaison office in Turkey carries out several non-commercial functions, which include:

Market Research

Liaison offices gather and analyze market data to provide insights to the parent company. This information helps in understanding market trends, customer preferences, and potential opportunities.

Promotion and Public Relations

The office promotes the parent company’s products or services through various channels such as trade shows, exhibitions, and networking events. It also manages public relations activities to enhance the company’s presence in the Turkish market.

Coordination and Communication

Liaison offices facilitate communication between the parent company and Turkish businesses, ensuring smooth coordination of business activities. This includes organizing meetings, handling inquiries, and providing support to the parent company’s representatives visiting Turkey.

Administrative Support

The office provides administrative support to the parent company’s operations in Turkey. This includes managing local logistics, arranging travel and accommodation, and handling documentation and correspondence.

Compliance and Reporting

Liaison offices must comply with Turkish regulations and submit regular reports to the GDIIFI. These reports include details of the office’s activities, financial statements, and updates on staffing and other relevant information.

How to Establish a Liaison Office in Turkey?

We Can Establish a Liaison Office in Turkey within 3 Weeks

We can establish a liaison office in Turkey 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.

Please be informed that liaison offices cannot carry out any commercial activities in Turkey. If your company aims to generate sales, then a limited, joint stock company or a branch office are your options for your company.

We Need the Following Documents to Establish a Liaison Office in Turkey

The following documents have to be submitted for establishing a liaison office in Turkey:

• The original copy of Certificate of Good Standing (This is a document that is issued by the Chamber of Commerce where the mother company is incorporated. It is stated in this document that the mother company is still active and operating). It must be notarized and apostilled.
• Operational report or balance sheet and income statement of the mother company,
• The original copy of the power of authority is issued to the name of the person who is appointed to carry out the operations of the liaison office (Power of attorney to the Director of Liaison office). It must be notarized and apostilled.
• The original copy of power of attorney to our law firm to carry out the establishment transactions of the liaison office on behalf of the mother company. It must be notarized and apostilled.
• Board Resolution of the mother company. It must be signed by authorized persons in the certificate of activity. It must be notarized and apostilled.
• The representative scanned the passport copy.
• A signature declaration of an Authorized person is also required.
• The application form and commitment letter also need to be signed by the authorized person. (We will send the text) It must be notarized and apostilled.

Starting Operations

After an establishment permit is granted by the Directorate General of Foreign Investments, the relevant liaison office in Turkey is supposed to register with the local tax office and send a copy of the tax office registration document to the Directorate General latest within 1 month.

Periodically Informing the Undersecretaries of the Treasury

A liaison office in Turkey is supposed to provide the Directorate General with the following every year, at the latest until the end of May to inform the authorities about their activities of previous years:

Data Form for Liaison Office Activities

Documents certifying that the previous year’s expenses of the office have been covered by foreign currency transferred from abroad have to be enclosed as well.

Duration of Operating Permits and the Extensions

Liaison offices in Turkey are granted operation permits for 3 years at most. For extensions, successive extensions of a maximum of 5 years each may be granted by taking into consideration the activities of previous years and plans and objectives for the future.

There is no income tax or any other tax since the liaison office does not generate any income. There is, however, social security tax, if there are employees. Moreover, employees also don’t pay income tax as well.

In Which Fields a Liaison Office can be Established?

• Representation and Hosting,
• Control, Inspection, and Provision of Suppliers in Turkey about Quality and Standards,
• Technical Support,
• Communication and Transfer of Information, and
• Regional Management Centre

Reach us to Establish a Liaison Office in Turkey

Establishing a liaison office in Turkey is an effective way for foreign companies to maintain a presence and gather valuable market insights without engaging in direct commercial activities.

By following the necessary steps for approval and registration, and understanding the office’s responsibilities, foreign companies can successfully leverage their liaison office to support their business objectives in Turkey.

At Finlexia Accounting Firm, we assist clients in navigating the complexities of establishing and managing liaison offices in Turkey. Our comprehensive services ensure compliance with local regulations and the efficient operation of your liaison office.

For more information or assistance, you may reach our accountants and lawyers to establish a liaison office in Turkey by visiting our Contact page.