A company headquartered in a foreign country other than Türkiye can establish a liaison office in Türkiye.
Liaison offices to be established in Türkiye shall have the status of the representative of the foreign company in Türkiye.
Liaison offices cannot engage in trade. They cannot issue any sales invoice for the delivery of goods or performance of services.
The liaison office in Türkiye must have a director authorized to sign. The authorized signatory can be a Turkish citizen or a foreign national. However, the foreign national must have a residence in Türkiye and a residence permit.
Liaison offices in Türkiye do not pay any income tax as they cannot generate income.
Liaison offices in Türkiye can employ employees (workers). If their wages (salaries) are paid in foreign currency from the head office abroad, no income tax is deducted. Social Security (SSI) contributions and unemployment insurance contributions are paid for these employees. One foreign national can be employed in the liaison office for every 5 Turkish citizens. For the employment of foreign nationals, other requirements for work permits must also be met. If Turkish citizens working in liaison offices in Türkiye receive their wages from the parent company abroad and in foreign currency, no income tax deduction is made from their payrolls, and they are exempt from annual income tax regardless of the amount. Even if the persons earning wage income have other income subject to declaration such as rent, value increase income, the wage income from the liaison office is not subject to declaration if the conditions are met.
Liaison offices open a withholding tax liability for the persons they employ, self-employment payments, rent payments and other deductions subject to income tax and submit a withholding tax return. They also submit monthly SSI declarations.
Liaison offices are generally established for activities such as the promotion and marketing of the products and services of the foreign company in Türkiye, the control and supervision of customers and suppliers in Türkiye in terms of quality and standards, and the provision of supplier procurement and other similar contacts, representation of the company in Türkiye, and are closed at any time.
Liaison offices shall not be registered with trade registry offices and chambers of commerce.
Liaison offices established in Türkiye shall submit their annual activity results.
The Ministry of Industry and Technology can evaluate the requests of foreign companies headquartered abroad to open a liaison office in Türkiye within the framework of factors such as the company’s field of activity, capital and the number of personnel employed, and can stipulate that a period of at least one year must pass from the establishment of the company in order to grant the activity permit.
Applications for establishment and extension of time shall be finalized within fifteen business days from the date of application, provided that the requested information/documents are complete and complete.
For initial applications, liaison offices are permitted for a maximum period of 3 years within the scope of the declared activity. Offices wishing to extend their activity period shall apply to the Directorate General before the end of the activity period.
The Directorate General can finalize the extension requests within the following periods in accordance with the nature of the activity to be carried out by evaluating the activities of the bureau in the previous year, the future business plan and objectives of the foreign company in Türkiye, the current and projected expenditure amount and the number of personnel employed. The operating periods of the offices authorized to conduct market research or to promote the products or services of the foreign company shall not be extended.
Liaison offices must send the Information Form on the Activities of Liaison Offices and the attached documents to the Ministry about the activities of the office in the previous year by the end of the following May at the latest every year after its establishment. Liaison offices that do not submit this form and attached documents,
time extension requests are not taken into consideration. Activity permits can also be canceled ex officio.
In the event that liaison offices terminate their activities, a business cessation-receipt to be obtained from the relevant tax office is taken for the closure process. Offices cannot request a transfer except for the balance arising from the closure and liquidation.
Liaison offices can change authorized signatories during the period. The change is subject to the permission of the Ministry.
For more information, please write to info@karenaudit.com
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
