In order to officialize your company in Turkish market, Liaison Office Turkey (also called representative office) is one of the most adapted solution (among Joint Stock Company « JSC », Limited Liability Company « LLC », Cooperative Company).
Azkan Group is able to support you in your Liaison Office set-up project.
Establishing is quite easy and quick according to Foreign Direct Investment Law No. 4857, and in the framework of procedures and principles stated in “Application Regulation”.
Officially, it is a local entity linked to headquarters based outside Turkey. Via Liaison office, it is forbidden to develop commercial activities generating any local revenue (Not allowed to carry out any commercial activity). Also, all costs and expenses are covered by foreign entity.
Activities of Turkey Liaison office Turkey
- Any market research approach as collecting information, communication. To conduct market research and feasibility studies and to oversee investment.
- Representation and hosting
- Follow-up of local contacts as suppliers via control and inspection
- Technical support for your local needs
- Regional management activity : Turkey’s location is considered as a hub
Registration
Set-up process is managed by Turkish Economy’s Ministry, competent authority able to validate your application, General Directorate of Incentive Implementation and Foreign Investment
Many information are requested in order to apply officially : capital, insurance business, presentation of your project…
After your registration, you’ll get permission for duration from 3 to 5 years according to your scope of activity. According to your registration, permission can be extended up to 5 years, an application must be done to General Directorate of Incentive Implementation and Foreign Investment, one month before the expiration of the authorization. And, you must precise the future plans of the parent company in Turkish company.
Important : extension aren’t validate if your local scope of activity is market research and product promotion.
Information requested during application
- Application form duly completed
- Operating certificate of your company in original, certified translated and validated by a notary version
- Financial information : operational report / balance sheet of foreign entity. Once again, it must be submitted in translated and validated by a notary version
- Application letter precising scope of activity of future Liaison Office, signed by foreign entity
- Indication of future local Director of Liaison office Turkey. You must designate a local person and precise it in Letter of Commitment translated and validated by a Notary
- Power of attorney if set-up process will be managed a local person.
- All original documents submitted to the General Directorate will be sent back after validation of application.
Duration : 15 days (indicated by Turkish Authorities).
Advantages of Liaison Office Turkey
Local entity will be exempted of specific local taxes like VAT (Value added Tax), corporate tax, income tax, stamp tax decution…
Social Security
All employees under Liaison Office Turkey will be insured under Turkish Social Security and General Health Insurance Law No. 5510. Declaration of new employee to Turkish authority must be done immediately.
Notification :
Applications of international investors to establish liaison offices to operate in sectors that are subject to special legislation, such as money and capital markets, and insurance, etc., are assessed
FAQ about Liaison Office in Turkey
A liaison office can invoice in Turkey ?
No, it is forbidden to develop commercial activities and generate revenue. Liaison Office is supported financially by its headquarters based outside Turkey. All money transfer must be done in foreign currency.
In case of recruitment, a Turkish liaison office has to make declaration as any other company ?
Yes. Your employees are considered as any local Turkish employee. They will be benefit of same advantages and obligations. You must notify your registration to SSI.
Liaison Office is subject to Stamp Tax ?
No. You’re not obliged to calculate Stamp Tax.
Minimum living allowance is applicable in Liaison Office ?
No as employees aren’t subject to Income Tax, minimum living allowance is corresponding to a deduction of the wages and cannot be considered as an application.
Local employees under Liaison Office can benefit of Incentive 5510 and others ?
As your employees are considered as any other Turkish employees. They will benefit of same advantages and obligation.
Is there any exception as regard to ssi liability for liaison office personnel ?
If there is an agreement between Turkey and the country parent company established in, the persons employed temporarily in the liaison office may be exempt from SSI, provided that certificate of exemption is obtained.
A liaison office can invoice in Turkey ?
No, it is forbidden to develop commercial activities and generate revenue. Liaison Office is supported financially by its headquarters based outside Turkey. All money transfer must be done in foreign currency.
In case of recruitment, a Turkish liaison office has to make declaration as any other company ?
Yes. Your employees are considered as any local Turkish employee. They will be benefit of same advantages and obligations. You must notify your registration to SSI.
Liaison Office is subject to Stamp Tax ?
No. You’re not obliged to calculate Stamp Tax.
Minimum living allowance is applicable in Liaison Office ?
No as employees aren’t subject to Income Tax, minimum living allowance is corresponding to a deduction of the wages and cannot be considered as an application.
Local employees under Liaison Office can benefit of Incentive 5510 and others ?
As your employees are considered as any other Turkish employees. They will benefit of same advantages and obligation.
Is there any exception as regard to ssi liability for liaison office personnel ?
If there is an agreement between Turkey and the country parent company established in, the persons employed temporarily in the liaison office may be exempt from SSI, provided that certificate of exemption is obtained.
Permission validation can extend 15 days for Liaison Office Turkey ?
Yes. Liaison Office set up Official duration is 15 days… But most of the time, duration is more than 1 or 2 months (sometimes more !) as Turkish authorities make deep investigation and need more time to approve your application
Azkan GROUP
Azkan GROUP is a consulting firm offering several types of missions to international companies wishing to invest in Turkey:
About Payroll Turkey / Partners’ detection / Subsidiary set-up / Recruitment Turkey
Click Here
Written by Executive Manager EMEA of Azkan Group: Inane GURBUZ
