How to Set Up a Representative Office in Turkey?

Establishing a representative office in Turkey involves navigating a comprehensive legal and regulatory framework designed to ensure compliance and operational efficiency. This process, known as setting up a representative office in Turkey, requires meticulous attention to detail, beginning with the submission of an application to the Ministry of Industry and Technology.

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Setting Up a Representative Office in Turkey: What It Is, How to Do It, and Its Responsibilities

What is a Representative Office in Turkey?

A representative office in Turkey is a type of business entity that allows foreign companies to establish a presence in Turkey without engaging in commercial activities. These offices are primarily set up to conduct market research, establish business connections, and promote the parent company’s interests in Turkey.

They do not have the authority to carry out direct sales or revenue-generating activities within the country.

How to Set Up a Representative Office in Turkey

Setting up a representative office in Turkey involves several steps and adherence to specific regulations. Here is a step-by-step guide:

1. Application Submission: The process begins with submitting an application to the Ministry of Industry and Technology. The application must include detailed information about the foreign company, such as its articles of association, certificate of incorporation, and a board resolution approving the establishment of the representative office in Turkey.
2. Required Documentation: Along with the application, the following documents must be provided:

• A notarized and apostilled copy of the parent company’s certificate of incorporation.
• A notarized copy of the articles of association.
• A board resolution authorizing the establishment of the representative office.
• A lease agreement or proof of the office address in Turkey.
• A power of attorney granting authority to the person who will manage the representative office.

1. Ministry Approval: Once the application and documents are submitted, the Ministry of Industry and Technology reviews them. If everything is in order, the ministry grants approval, allowing the foreign company to establish its representative office in Turkey.
2. Registration with Local Authorities: After obtaining approval from the ministry, the representative office must be registered with the local trade registry office. This includes submitting the approved documents and obtaining a tax identification number from the local tax office.
3. Operational Setup: With all legalities in place, the representative office can be set up physically. This involves setting up the office space, hiring local staff if necessary, and starting operations in line with the permitted activities.

Responsibilities of a Representative Office in Turkey

A representative office in Turkey has specific responsibilities and limitations. Understanding these is crucial for compliance and effective operation:

• Market Research: One of the primary functions of a representative office is to conduct market research. This helps the parent company understand the Turkish market, identify potential business opportunities, and assess the competitive landscape.
• Business Promotion: The office can promote the parent company’s products and services, enhancing brand awareness and establishing business connections with local entities and potential partners.
• Liaison Activities: Acting as a liaison between the parent company and Turkish businesses or government bodies is a key responsibility. This facilitates communication and coordination, supporting the parent company’s strategic interests in Turkey.
• Reporting: The representative office must regularly report its activities and findings to the parent company. This ensures that the parent company is kept informed about the local market conditions and potential opportunities.
• Compliance: The office must adhere to Turkish regulations and laws governing its operations. This includes maintaining accurate records, filing necessary reports with local authorities, and ensuring that its activities remain within the permitted scope.

How to Set up Representative Office in Turkey?

We Can Set up Representative Office within 3 Weeks

We can set up representative 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 representative 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 for Representative 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 representative 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 representative office in Turkey is supposed to provide the Directorate General with the following every year latest until the end of May to inform the authority about their activities of previous years:

Data Form for Representative 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

Representative 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 Representative Office can be Established in Turkey?

• 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 Set Up Representative Office in Turkey

Setting up a representative office in Turkey is a strategic move for foreign companies looking to explore the Turkish market and establish a presence. By understanding the legal framework, following the necessary steps, and fulfilling their responsibilities, companies can effectively leverage their representative office to support their business objectives in Turkey.

For professional assistance with setting up a representative office in Turkey, including navigating regulatory requirements and ensuring compliance, Finlexia Accounting Firm offers comprehensive support tailored to your business needs.

Contact us today to learn more about how we can help you establish a successful presence in Turkey. You may reach our accountants and lawyers to set up a representative office in Turkey by visiting our Contact page.