Are you planning to expand your business to Türkiye?

Türkiye is a key business hub connecting Europe, Asia, and the Middle East. If you’re looking for a way to establish a presence without engaging in direct trade, a Liaison Office might be the ideal solution.

But how does it work, and what should you know before setting up one? Let’s go step by step.

Firstly, What is a Liaison Office?

A Liaison Office is a non-commercial business entity that allows foreign companies to operate in Türkiye without conducting direct trade or sales. This means that while you cannot issue invoices or generate revenue, you can:

  • Conduct market research to analyze trends and business potential in Türkiye.
  • Promote and represent your company by building relationships with clients and partners.
  • Coordinate business operations between Türkiye and your headquarters abroad.
  • Manage supplier relationships and ensure quality control.

Unlike regular companies, Liaison Offices are exempt from corporate tax and VAT, as long as they do not engage in commercial activities. This makes them a cost-effective and low-risk way for businesses to explore the Turkish market.

How to Set Up a Liaison Office?

The setup process is relatively quick and straightforward, taking around 15 business days if all documents are submitted correctly.

Here’s what you’ll need:

  • A completed application form submitted to the Ministry of Industry and Technology.
  • A business activity declaration stating that the Liaison Office will not conduct commercial activities.
  • A certificate of activity from the parent company, legalized by the Turkish consulate or apostilled.
  • The company’s financial statements or an activity report to demonstrate its operations abroad.
  • A power of attorney authorizing the office representative in Türkiye.

Once the application is approved, the Liaison Office receives an initial three-year operating permit, which can be extended based on activity and compliance with regulations. However, for certain functions like market research, extensions beyond three years are not granted.

Key Considerations

Operating a Liaison Office comes with important legal and financial considerations. Here are some key points to keep in mind.

  • Salaries for foreign employees can be paid in foreign currency directly from the parent company, and they are exempt from income tax in Türkiye.
  • The Liaison Office must handle rent and service payments carefully, as these expenses are subject to withholding tax deductions.
  • Each year, the Liaison Office must submit an annual activity report to the Ministry of Industry and Technology before the end of May. Failure to submit this report can lead to penalties or even the cancellation of the office’s permit.
  • The office cannot engage in any revenue-generating activities. If a Liaison Office is found conducting commercial transactions, the government may revoke its status and impose legal actions.

Why Choose Türkiye for Liaison Office?

Türkiye offers a dynamic and rapidly growing economy with strong connections to both Europe and Asia. For foreign companies, a Liaison Office provides an excellent way to do the following:

  • Establish a strong local presence without immediate financial risks.
  • Understand market trends, regulations, and consumer behavior before making a full investment.
  • Build relationships with potential partners, suppliers, and clients in Türkiye.
  • Benefit from a tax-free structure, as Liaison Offices are not subject to corporate tax or VAT.

If you are considering expanding your business into Türkiye, setting up a Liaison Office could be the perfect first step. Contact us today, and let’s make your business expansion smooth and successful. Thank you for watching.


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.