Introduction

Foreign companies planning to conduct business in Turkey do not necessarily have to establish a new Turkish subsidiary. Depending on the commercial strategy, a foreign company may instead establish and register a branch in Turkey.

A Turkish branch can be an attractive structure for international companies that want to enter the Turkish market while maintaining the foreign parent company as the primary legal entity.

A branch may be used to conduct genuine commercial activities in Turkey, enter into contracts, generate revenue, employ personnel and operate as the Turkish extension of the foreign parent company.

However, a branch is fundamentally different from a Turkish limited liability company or joint stock company.

The most important legal distinction is:

A Turkish branch of a foreign company is not a separate legal entity from its foreign head office.

Official Turkish investment guidance confirms that a branch has no separate shareholder structure and is not an independent legal entity. Its existence is linked to the duration of the parent company, and it may generally conduct only activities falling within the purposes of the parent company.

This has major practical consequences.

If a foreign company establishes a wholly owned Turkish subsidiary, the subsidiary becomes a separate Turkish legal person.

If the same foreign company establishes a Turkish branch instead, the branch remains legally connected to the foreign company itself.

Therefore, debts, contracts and liabilities arising from the Turkish branch may ultimately create direct exposure for the foreign parent company.

For multinational groups, service companies, engineering businesses, international contractors, technology businesses, manufacturers and foreign enterprises entering the Turkish market, the choice between a branch, subsidiary and liaison office should therefore be made only after considering:

• liability;
• taxation;
• corporate governance;
• banking;
• commercial contracts;
• regulatory licensing;
• employment;
• work permits;
• profit repatriation; and
• long-term exit strategy.

This article explains how a foreign company can open a branch in Turkey in 2026, the required documents, registration procedure, branch manager requirements, tax treatment, E-TUYS reporting obligations and the principal legal risks foreign companies should consider before choosing a branch structure.

1. What Is a Branch Under Turkish Law?

A branch is a place of business connected to a commercial enterprise through which industrial or commercial activities are conducted independently at the operational level, regardless of whether the branch has separate capital or separate accounting.

The Turkish Trade Registry Regulation defines a branch broadly as a place connected with a commercial enterprise where industrial or commercial activity is independently conducted, regardless of whether it is located within the same trade registry district as the head office or whether it maintains separate capital or accounting records.

The concept therefore focuses on actual commercial activity.

A branch is not merely:

• a mailbox;
• a representative address;
• a marketing desk; or
• an administrative contact point.

A properly registered branch may actively carry out commercial activities within the scope of the parent company’s purposes.

This distinguishes a branch from a liaison office, which is generally prohibited from engaging in commercial activity in Turkey.

2. Can Any Foreign Company Open a Branch in Turkey?

In principle, a commercial enterprise whose headquarters is outside Turkey may register a branch in Turkey, subject to:

• Turkish Commercial Code requirements;
• Trade Registry procedures;
• foreign direct investment rules;
• sector-specific legislation; and
• any special restrictions applicable to the relevant business activity.

The Turkish Commercial Code framework provides that branches of businesses headquartered outside Turkey are registered in Turkey largely in the same manner as domestic commercial enterprises, while preserving the rules of the company’s home jurisdiction concerning its trade name.

A foreign company establishing a Turkish branch must appoint a fully authorised commercial representative whose residence is in Turkey.

Accordingly, a branch can be used by:

• foreign corporations;
• international service companies;
• overseas manufacturers;
• engineering companies;
• construction companies;
• technology companies;
• international consultancies;
• international trading companies; and
• other foreign commercial enterprises.

However, if the intended activity is regulated, separate permits may be required before or after registration.

3. Does a Turkish Branch Have Separate Legal Personality?

No.

This is the defining legal characteristic of a branch.

Turkey’s official foreign investment guidance expressly states that a branch is not an independent legal entity.

The branch is effectively an extension of the foreign parent company in Turkey.

There is no separate shareholder of the branch.

The foreign head office remains the underlying enterprise.

This means that the legal relationship can be illustrated as:

Foreign Parent Company → Turkish Branch

rather than:

Foreign Parent Company → Separate Turkish Subsidiary

This distinction is critically important for liability.

If the Turkish branch signs a major supply agreement and later defaults, the legal exposure is not confined to an independently capitalised Turkish subsidiary in the same manner as an ordinary shareholding structure.

Because the branch does not have separate legal personality, the foreign parent company may ultimately bear responsibility for obligations arising through its Turkish branch.

Foreign investors should therefore consider whether the commercial convenience of a branch justifies the increased direct exposure of the parent company.

4. Is Minimum Capital Required to Open a Branch in Turkey?

Unlike a Turkish limited liability company or joint stock company, a foreign company’s Turkish branch is not subject to a statutory minimum share capital requirement merely because it is being registered as a branch.

Official Invest in Türkiye guidance confirms:

There is no capital requirement for a branch.

However, it also notes that the foreign company should allocate an appropriate budget for the branch’s operations.

This distinction is important.

A branch may not need:

• TRY 50,000 minimum company capital applicable to an ordinary limited company; or
• TRY 250,000 minimum company capital applicable to an ordinary joint stock company.

Nevertheless, the branch will still require sufficient operating funds to cover:

• office expenses;
• employees;
• tax obligations;
• accounting;
• commercial contracts;
• licences;
• rent;
• banking costs; and
• business operations.

Banks and regulators may also consider the branch’s financial position independently when evaluating specific transactions or licences.

5. Can the Branch Conduct Different Activities From the Foreign Parent Company?

Generally, no.

A Turkish branch may operate within the business purposes of the foreign parent company.

Official investment guidance states that a branch may be incorporated only for purposes corresponding to those of the parent company.

This becomes particularly important where the foreign company’s constitutional documents contain a narrow business purpose.

Example

Assume a foreign corporation’s constitutional documents state that its sole business is software development.

The company wants to establish a Turkish branch to operate:

• restaurants;
• real estate development; or
• unrelated financial services.

The foreign company’s corporate purpose may first need to be examined and potentially amended under its home-country law.

Foreign companies should therefore review their:

• articles of association;
• certificate of incorporation;
• business objects; and
• corporate authority

before approving the Turkish branch.

6. What Is the Difference Between a Branch and a Turkish Subsidiary?

This is one of the first strategic decisions a foreign investor should make.

Turkish Branch

A branch:

• is not a separate legal entity;
• has no shareholders of its own;
• is connected directly to the foreign parent company;
• does not have a statutory minimum capital requirement;
• may generally operate only within the parent’s corporate purposes;
• is represented through authorised branch representatives; and
• exposes the foreign parent more directly to Turkish branch liabilities.

Turkish Subsidiary

A subsidiary is generally established as a:

• limited liability company (Ltd. Şti.); or
• joint stock company (A.Ş.).

The subsidiary:

• has separate legal personality;
• has its own share capital;
• has shareholders;
• owns its own assets;
• enters into contracts in its own name;
• has separate corporate governance; and
• generally provides stronger separation between the foreign parent and Turkish operational liabilities.

Example

A German company wants to begin operations in Istanbul.

It could establish:

German GmbH – Istanbul Branch

or:

German GmbH → 100% shareholder of Turkish A.Ş.

The commercial operations may appear similar.

Legally, however, the structures are significantly different.

7. When May a Branch Be Better Than a Subsidiary?

A branch may be attractive where the foreign company:

• wants direct control from headquarters;
• does not need outside shareholders in Turkey;
• wants to avoid establishing a separate shareholding structure;
• operates project-based international business;
• needs a direct Turkish extension of the foreign enterprise;
• does not anticipate selling the Turkish operation separately;
• is comfortable assuming direct liability; or
• prefers repatriating branch profits directly to headquarters.

Branches are often considered by companies conducting:

• international contracting;
• engineering;
• construction;
• consulting;
• project management;
• industrial services;
• international trade; and
• certain professional or technical services.

The correct structure still depends on the specific business.

8. When May a Turkish Subsidiary Be Better?

A subsidiary may be more appropriate where:

• liability ring-fencing is commercially important;
• Turkish investors may enter later;
• venture capital or private equity investment is contemplated;
• Turkish operations may later be sold independently;
• local borrowing will be substantial;
• local management needs greater corporate autonomy;
• intellectual property will be owned locally;
• the Turkish business will grow into a substantial independent operation; or
• complex shareholder governance is required.

Foreign companies expecting major long-term Turkish operations frequently prefer a subsidiary structure because of corporate separation.

9. Branch or Liaison Office: What Is the Difference?

These structures should not be confused.

A branch may conduct commercial activities.

A liaison office generally may not.

Official Invest in Türkiye guidance states that a company incorporated abroad may establish a liaison office in Turkey with permission from the Ministry of Industry and Technology, provided that the liaison office does not engage in commercial activities in Turkey.

A liaison office may therefore be suitable for activities such as:

• market research;
• coordination;
• representation;
• information gathering;
• communication;
• supplier research; or
• regional support,

depending on its permitted scope.

Where the foreign company intends to:

• invoice Turkish customers;
• sell goods;
• provide paid services;
• execute revenue-generating contracts; or
• conduct commercial operations,

a liaison office is generally not the correct structure.

10. How Is a Foreign Company Branch Registered in Turkey?

The branch must be registered with the relevant Trade Registry Directorate.

Trade registry transactions in Turkey are integrated with MERSIS – the Central Registry Record System.

MERSIS is Turkey’s central electronic system used for commercial registry procedures and maintaining commercial registry data.

The foreign company’s branch is registered in the trade registry district where it will operate.

Once registered, information concerning the branch becomes part of the Turkish commercial registry system and the relevant registration is announced through the applicable commercial registry publication process.

11. Does the Foreign Parent Company Need to Pass a Formal Resolution?

Yes.

The competent corporate organ of the foreign parent company should formally approve the establishment of the Turkish branch.

The exact approving body depends on the foreign company’s home-country law and constitutional documents.

It may be:

• board of directors;
• shareholders;
• managers;
• supervisory body; or
• another authorised corporate organ.

Official Turkish investment guidance specifically lists the resolution of the competent organ of the parent company to establish a branch among the documents required for branch registration.

The resolution should normally address matters such as:

• establishment of the Turkish branch;
• branch location;
• branch activities;
• appointment of branch representative;
• representation authority;
• branch budget or operational allocation; and
• authority to complete Turkish registrations.

12. What Documents Are Required to Open a Turkish Branch?

The official Invest in Türkiye registration guide identifies documents including the following:

• registration petition;
• resolution of the competent body of the foreign parent company approving the branch;
• certified original copy of the parent company’s articles of association;
• certificate of activity or equivalent document showing the foreign company’s registration and current status;
• power of attorney granting the Turkish resident representative full representation authority;
• establishment declaration documentation;
• documents relating to the representative in Turkey;
• identification or passport documentation for the branch representative;
• signature declarations of the representative under the branch trade name;
• letter of commitment; and
• Chamber registration documentation.

The exact filing package should be checked with the competent Trade Registry before submission.

Corporate documents should also be drafted consistently.

A common reason for delay is that:

• the foreign board resolution says one thing;
• the power of attorney says another;
• the articles of association use different terminology; or
• the representative’s authority is unclear.

13. Must Foreign Documents Be Apostilled?

Generally, foreign-issued documents used for branch registration must satisfy Turkish authentication requirements.

Official Invest in Türkiye guidance states that documents issued and executed outside Turkey must generally be:

• notarised and apostilled; or
• alternatively authenticated through the competent Turkish consulate,

depending on the applicable international framework.

The authenticated documents must then generally be:

• officially translated into Turkish; and
• notarised in Turkey as required.

The precise authentication method depends on whether the issuing country is party to the Hague Apostille Convention and on the nature of the document.

Foreign companies should therefore prepare corporate documentation before the planned registration date.

14. Who Can Be the Branch Manager or Representative?

A foreign company’s Turkish branch must appoint a fully authorised commercial representative resident in Turkey.

The Ministry of Trade’s official corporate guidance confirms this requirement for branches of enterprises headquartered outside Turkey.

The representative may be granted broad authority to act on behalf of the foreign company through its Turkish branch.

The authority may include the power to:

• execute commercial agreements;
• represent the branch before public authorities;
• conduct banking procedures;
• hire personnel;
• sign tax documentation;
• manage operational matters;
• represent the branch before counterparties; and
• perform other actions within the power of attorney.

Because the branch is not a separate legal entity, the scope of authority granted to the branch representative should be drafted with particular care.

15. Must the Branch Representative Be a Turkish Citizen?

Turkish citizenship should not be confused with the requirement for a representative resident in Turkey.

Official registration guidance expressly contemplates both situations:

• where the branch representative is Turkish; and
• where the representative is a foreigner.

Where the representative is foreign, a notarised Turkish translation of the passport may be required as part of the registration file.

However, a foreign representative who will actually work in Turkey must separately consider Turkish immigration and work permit legislation.

Company-law authority does not automatically create permission to work.

16. Does a Foreign Branch Manager Need a Work Permit?

Potentially, yes.

The fact that a foreign national has been appointed as branch representative does not automatically authorise that person to work physically in Turkey.

Work permit legislation should be examined separately.

Turkey has specialised rules concerning foreign employees and key personnel employed by qualifying foreign direct investment enterprises. Official investment guidance confirms that companies and branches falling within the foreign direct investment framework may, where the statutory requirements are satisfied, benefit from the rules applicable to qualified foreign direct investments and key foreign personnel.

Foreign companies should therefore assess the work permit position before the foreign branch manager begins active employment in Turkey.

17. What Name Must the Turkish Branch Use?

The branch must use the trade name of its head office while clearly indicating that it is a branch.

Article 48 of the Turkish Commercial Code requires each branch to use the trade name of its headquarters together with an indication that it is a branch.

For a business headquartered abroad, the branch’s trade name must also indicate:

• the location of the head office;
• the location of the Turkish branch; and
• the fact that it is a branch.

Therefore, the Turkish branch does not ordinarily operate under an entirely unrelated independent trade name.

The connection with the foreign head office must be transparent.

18. Does the Branch Need a Turkish Business Address?

Yes.

The branch must be registered in a Turkish trade registry district and therefore needs an appropriate Turkish branch address.

The address may have implications for:

• Trade Registry registration;
• tax registration;
• official service;
• municipality licensing;
• banking;
• employee registration;
• sector regulation; and
• other administrative procedures.

Foreign companies should ensure that the proposed premises are legally suitable for the intended business activity.

A registered office that is adequate for a consultancy may not satisfy the physical conditions required for:

• healthcare;
• food production;
• manufacturing;
• warehousing;
• regulated finance; or
• other licensed activities.

19. Does the Branch Need a Separate Tax Registration?

Yes.

A foreign company’s Turkish branch becomes relevant for Turkish tax purposes.

The Turkish Revenue Administration’s 2026 Corporate Tax Guide expressly states that when a foreign company opens a branch in Turkey, tax registrations must be established for:

• corporate income tax;
• value added tax; and
• provisional tax.

Where applicable, withholding and social security-related declaration obligations may also arise.

The foreign company is generally treated as a limited taxpayer in Turkey because its legal and business headquarters are outside Turkey.

A limited taxpayer is generally taxed on income attributable to Turkey under the Corporate Tax Law and applicable double taxation treaties.

20. What Is the Corporate Tax Rate for a Turkish Branch in 2026?

For ordinary corporate taxpayers, the general corporate income tax rate applicable to the 2026 financial year is currently:

25%.

The Revenue Administration confirms that the standard 2026 corporate income tax rate is 25%, while certain financial institutions and specified businesses are subject to a 30% rate.

Accordingly, an ordinary foreign company operating through a Turkish branch will generally calculate Turkish corporate income tax on the taxable profit attributable to its Turkish business operations, subject to:

• deductible expenses;
• applicable exemptions;
• sector-specific tax rules; and
• double taxation treaty provisions.

Tax planning should be completed before selecting the branch structure.

21. How Is a Turkish Branch Taxed?

A foreign company with a Turkish workplace or permanent representative is taxed as a limited taxpayer on commercial profits attributable to its Turkish activities.

The Turkish Revenue Administration states that the taxable income of limited-taxpayer foreign corporations operating through a workplace or permanent representative is generally calculated under rules comparable to those applied to resident corporate taxpayers for business income.

The branch may therefore need to maintain Turkish accounting records and comply with:

• corporate tax;
• VAT;
• provisional tax;
• withholding obligations;
• employee payroll;
• SGK obligations;
• invoicing requirements; and
• electronic reporting requirements where applicable.

A foreign company’s global accounting system does not replace Turkish statutory compliance.

22. Can Branch Profits Be Transferred to the Foreign Head Office?

Yes.

Turkey permits the repatriation of qualifying branch profits to the foreign headquarters.

Official Invest in Türkiye guidance expressly confirms that branch profit may be transferred to the parent/head office.

However, the remittance may trigger additional Turkish withholding taxation.

Accordingly, the tax consequences of operating through a branch should be compared with dividend distributions from a Turkish subsidiary.

23. What Tax Applies When Branch Profits Are Remitted Abroad?

Under the current Turkish rules, after Turkish corporate income tax is calculated, the amount transferred by a limited-taxpayer branch to its foreign head office may be subject to 15% withholding tax.

The Turkish Revenue Administration’s 2026 corporate tax guidance confirms that the amount remaining after corporate tax and transferred to the foreign head office is currently subject to 15% withholding.

Official Invest in Türkiye guidance states the same 15% branch profit remittance rate.

However, the rate may be reduced where an applicable Double Taxation Avoidance Treaty provides more favourable treatment.

Therefore, the parent company’s jurisdiction can materially affect the effective tax cost of the branch structure.

24. Why Must the Double Taxation Treaty Be Checked?

Turkey has an extensive network of double taxation treaties.

A relevant treaty may regulate:

• permanent establishment;
• attribution of profits;
• withholding taxes;
• interest;
• royalties;
• management fees;
• transfer pricing;
• and relief from double taxation.

A foreign company should therefore determine whether its home country has a tax treaty with Turkey before deciding between:

• branch;
• subsidiary;
• or direct cross-border activity.

The legal form that is most convenient under corporate law may not be the most efficient structure for tax purposes.

25. Are Transactions Between the Branch and Head Office Automatically Tax-Free?

No.

The fact that the branch and foreign head office belong to the same legal enterprise does not mean that every internal allocation is irrelevant for Turkish taxation.

Tax authorities may examine:

• head office expense allocations;
• management charges;
• financing;
• interest;
• service allocations;
• transfer pricing principles;
• deductible expenses; and
• profit attribution to the Turkish permanent establishment.

Multinational companies should ensure that their branch accounting provides a defensible allocation of income and expenditure.

26. Can the Branch Hire Employees in Turkey?

Yes.

A commercially active branch may employ personnel in Turkey.

The branch must then comply with Turkish:

• Labour Law;
• Social Security legislation;
• payroll requirements;
• occupational health and safety rules;
• employee tax withholding;
• employment agreements; and
• termination requirements.

Foreign employers should not assume that the foreign parent company’s employment policies automatically replace mandatory Turkish employment law.

Employees working for the Turkish branch may benefit from mandatory Turkish labour protections.

27. Can the Branch Employ Foreign Nationals?

Potentially, yes.

However, foreign employees may require Turkish work permits unless a statutory exemption applies.

The existence of a Turkish branch creates an employer structure through which work permit applications may potentially be made.

Special arrangements may apply to foreign key personnel working in qualified foreign direct investment enterprises.

The work permit strategy should be analysed together with:

• branch establishment;
• management appointments;
• employee planning; and
• immigration status.

28. Does the Branch Have E-TUYS Reporting Obligations?

Yes.

Foreign investment reporting is an important post-registration compliance obligation.

The Ministry of Industry and Technology confirms that notifications made by companies and branches established in Turkey by foreign investors are carried out through the Electronic Incentive Implementation and Foreign Capital Information System – E-TUYS.

The system is used for foreign investment information and related filings.

Accordingly, branch registration does not conclude the foreign investment compliance process.

The foreign company should ensure that:

• E-TUYS authorisation is completed;
• responsible users are appointed;
• required information is entered; and
• ongoing foreign investment reporting is performed on time.

29. Does the Branch Need Turkish Accounting?

Yes.

A Turkish commercial branch conducting business and subject to Turkish taxation must maintain accounting and tax records in accordance with the applicable Turkish framework.

In practice, the branch should work with a qualified Turkish accountant or financial adviser.

The accounting system should properly track:

• revenue;
• expenses;
• branch assets;
• head office funding;
• employee payroll;
• tax obligations;
• VAT;
• receivables;
• liabilities;
• profit remittances; and
• related head-office transactions.

Weak branch accounting creates both tax and parent-company risk.

30. Does a Foreign Branch Have to Use Turkey’s Electronic Corporate Book System?

Foreign-company branches should not automatically be treated as ordinary Turkish corporations for every corporate-book requirement.

The Ministry of Trade’s current electronic commercial book guidance specifically states that Turkish branches of enterprises headquartered abroad do not have an obligation to maintain the share ledger, board decision book and general assembly meeting and negotiation book because those corporate books do not apply to the branch structure in the same manner.

Accounting and tax books remain a separate issue and must be evaluated under the applicable tax and commercial legislation.

31. Can a Branch Open a Turkish Bank Account?

Yes, a registered branch may apply to banks operating in Turkey for commercial banking services.

However, bank account opening remains subject to the bank’s own:

• KYC procedures;
• beneficial ownership review;
• sanctions screening;
• source-of-funds analysis;
• corporate verification; and
• risk policies.

A foreign company may be asked to provide:

• parent-company incorporation documents;
• shareholder or ultimate beneficial ownership information;
• branch Trade Registry documents;
• tax registration;
• representative documentation;
• projected transaction volumes;
• countries involved in payments;
• customer and supplier information; and
• explanation of the Turkish commercial activity.

Branch registration therefore does not guarantee automatic bank onboarding.

32. Can a Turkish Branch Sign Contracts?

Yes.

One of the principal reasons to establish a branch rather than a liaison office is to conduct genuine business operations.

Through its authorised representative, the branch may enter into commercial transactions within the authority and scope of the foreign parent company’s activities.

The branch may therefore potentially enter into:

• customer agreements;
• supplier agreements;
• office leases;
• employment contracts;
• service agreements;
• distribution agreements;
• procurement contracts; and
• other commercial arrangements.

However, legally, these transactions remain connected with the foreign company because the branch itself does not have independent legal personality.

33. Who Is Liable for Branch Debts?

Because the branch is not a separate legal entity, foreign companies should assume that branch liabilities may ultimately create liability for the foreign enterprise itself.

This is one of the most important disadvantages compared with a Turkish subsidiary.

Example

A UK company establishes an Istanbul branch.

The branch enters into a TRY 100 million supply contract and fails to perform.

The foreign company cannot necessarily defend itself merely by saying:

“Only our Istanbul branch signed the contract.”

The branch is an extension of the foreign company rather than an independent limited-liability corporation.

For businesses with significant:

• product liability;
• construction liability;
• customer claims;
• employee exposure;
• environmental risk;
• professional liability; or
• borrowing,

this distinction should be considered carefully.

34. Can the Branch Be Sued in Turkey?

A branch conducting business in Turkey can create Turkish jurisdiction and procedural exposure.

Depending on:

• the contract;
• place of performance;
• applicable procedural law;
• jurisdiction clause;
• arbitration agreement;
• consumer rules;
• employment law; and
• mandatory jurisdiction provisions,

disputes concerning the Turkish branch may be brought before Turkish courts or arbitration tribunals.

The foreign company should therefore ensure that its Turkish contracts contain carefully drafted:

• governing law provisions;
• jurisdiction clauses; or
• arbitration clauses,

where legally permitted.

35. Can the Branch Import and Export Goods?

Potentially, yes.

A commercial branch may engage in import and export activities where those activities fall within the foreign parent’s corporate purposes and all applicable Turkish requirements are satisfied.

Additional obligations may arise concerning:

• customs;
• product regulation;
• conformity;
• import licences;
• product safety;
• VAT;
• excise duties;
• sanctions;
• trade controls; and
• sector regulation.

A Trade Registry registration alone does not override special import or export rules.

36. Does the Branch Need a Business Licence?

Possibly.

Commercial registration and business-operation licensing are separate matters.

Depending on the branch’s activities and premises, the branch may require:

• municipal workplace opening and operating licence;
• health permits;
• tourism licences;
• energy permissions;
• financial regulatory licences;
• sector certificates;
• environmental permits;
• manufacturing registrations; or
• other administrative approvals.

A foreign company should identify all licences before committing to a lease, employees or commercial launch.

37. What Happens if the Foreign Parent Company Is Liquidated?

The branch’s existence is linked to the foreign head office.

Official investment guidance expressly states that the duration of the branch is limited to the duration of the parent company.

Therefore, if the foreign parent:

• dissolves;
• is liquidated;
• loses legal personality; or
• otherwise ceases to exist,

the Turkish branch cannot ordinarily continue indefinitely as though it were an independent Turkish corporation.

This is another difference from a separately incorporated Turkish subsidiary.

38. Can the Turkish Branch Be Sold Independently?

Not in the same simple way as selling shares in a Turkish subsidiary.

A branch has no independent shares.

Therefore, there is no:

• 100% share transfer of the branch;
• minority equity sale in the branch; or
• share-based investment round directly into the branch.

If the foreign company later wants to bring in a local Turkish investor, the branch structure may become inconvenient.

Possible restructuring may involve:

• transferring the Turkish business to a subsidiary;
• asset transfer;
• business transfer; or
• other corporate restructuring.

This is an important consideration for companies expecting future investors or a Turkish exit transaction.

39. Can a Branch Be Converted Into a Turkish Company?

A future restructuring may be possible, but it should not be assumed to be an automatic one-step “conversion.”

Assets, employees, contracts, licences and liabilities may need to be transferred or reorganised according to the applicable legal mechanism.

This can generate:

• tax consequences;
• contract consents;
• employee issues;
• licence approvals;
• banking documentation; and
• administrative procedures.

A company expecting a long-term independent Turkish presence may therefore find it more efficient to establish a subsidiary from the beginning.

40. Is Competition Law Relevant to a Branch?

Yes.

A branch conducting economic activity in Turkey is not outside Turkish competition law merely because the parent company is foreign.

Turkish competition rules may apply to:

• restrictive agreements;
• distribution structures;
• resale pricing;
• market sharing;
• abuse of dominance;
• information exchange; and
• mergers or restructurings where applicable.

Multinational companies should therefore ensure that their Turkish commercial arrangements comply with Law No. 4054 on the Protection of Competition.

41. Does KVKK Apply to the Branch?

Potentially, yes.

A branch processing personal data in the context of Turkish operations must consider Law No. 6698 on the Protection of Personal Data – KVKK.

Compliance may be required concerning:

• employee data;
• customer data;
• supplier contacts;
• website data;
• cookies;
• marketing;
• international data transfers;
• headquarters access to Turkish databases;
• processor contracts; and
• data-security measures.

Cross-border data transfers can be particularly important because the branch may routinely send Turkish customer or employee information to the foreign headquarters.

The data-protection structure should therefore be reviewed before systems are integrated globally.

42. Common Mistakes Foreign Companies Make When Opening a Turkish Branch

Mistake 1: Assuming the Branch Is a Separate Limited-Liability Entity

It is not.

The foreign parent remains directly connected to the Turkish operation.

Mistake 2: Choosing a Branch Solely Because There Is No Minimum Capital

Absence of minimum capital does not necessarily make a branch commercially safer or cheaper.

Mistake 3: Using a Liaison Office for Commercial Sales

Liaison offices are generally prohibited from conducting commercial activity.

Mistake 4: Preparing Foreign Documents Incorrectly

Missing apostilles, consular certification or Turkish translations can delay registration.

Mistake 5: Granting the Branch Manager Excessive Authority

The branch representative may directly bind the foreign parent company.

Mistake 6: Ignoring Work Permit Rules

A foreign branch manager may still require work authorisation.

Mistake 7: Ignoring E-TUYS

Foreign-investment reporting continues after Trade Registry registration.

Mistake 8: Treating Head Office Transfers as Tax-Neutral

Profit remittances and other head-office transactions may have Turkish tax consequences.

Mistake 9: Ignoring Double Tax Treaties

The applicable treaty can significantly affect the total tax position.

Mistake 10: Choosing a Branch When Future Investors Are Expected

A branch has no shares that can simply be sold to a new investor.

43. Practical Example: German Company Opening an Istanbul Branch

Assume a German engineering company wants to conduct engineering and project-management services in Turkey.

The company does not currently need Turkish investors and wants the Turkish operation to remain directly under the German headquarters.

A potential process might be structured as follows.

Stage 1 – Corporate and Legal Assessment

The company compares:

• branch;
• Turkish subsidiary; and
• liaison office.

Because it intends to invoice Turkish customers and generate revenue, a liaison office is unsuitable.

Stage 2 – Parent Company Resolution

The German company’s authorised corporate body formally resolves to establish an Istanbul branch.

The resolution identifies:

• branch address;
• activities;
• representative;
• authority; and
• operational structure.

Stage 3 – Foreign Documentation

The company prepares:

• commercial registry certificate;
• articles of association;
• corporate resolution;
• authority documents; and
• power of attorney.

Documents are apostilled or otherwise legally authenticated and translated into Turkish.

Stage 4 – Branch Representative

A fully authorised commercial representative resident in Turkey is appointed.

If the representative is foreign, work permit requirements are analysed separately.

Stage 5 – MERSIS and Trade Registry

The branch establishment documentation is prepared and the branch is registered with the relevant Trade Registry Directorate.

Stage 6 – Tax Registration

Corporate tax, VAT and other relevant Turkish tax registrations are established.

Stage 7 – Banking

The branch applies for a Turkish commercial bank account.

The German parent provides KYC and beneficial ownership documentation.

Stage 8 – Accounting and Employment

The branch appoints Turkish accounting advisers and registers employees under the Turkish employment and SGK framework.

Stage 9 – E-TUYS

Foreign direct investment reporting access and ongoing E-TUYS compliance are arranged.

Stage 10 – Commercial Operations

The branch enters Turkish customer contracts and begins commercial operations.

Profits attributable to Turkey are taxed under Turkish corporate tax rules.

Where branch profits are subsequently transferred to the German headquarters, Turkish branch profit remittance taxation and the Turkey-Germany double taxation treaty are reviewed.

This example illustrates why branch establishment should be treated as a complete corporate, tax, employment and regulatory project rather than merely a Trade Registry filing.

Frequently Asked Questions About Foreign Companies Opening Branches in Turkey

Can a foreign company open a branch in Turkey?

Yes. Foreign commercial enterprises may generally register branches in Turkey subject to Turkish Commercial Code, Trade Registry and sector-specific requirements.

Does a Turkish branch have separate legal personality?

No. A foreign company’s Turkish branch is not an independent legal entity.

Is minimum capital required?

There is no statutory minimum branch capital requirement merely for branch establishment, although sufficient operating funds should be allocated.

Can a branch conduct commercial activities?

Yes, within the permitted purposes of the foreign parent company and subject to sector-specific rules.

Can a liaison office conduct the same activities?

No. A liaison office is generally prohibited from engaging in commercial activities in Turkey.

Does the branch need a Turkish representative?

A foreign company’s Turkish branch must appoint a fully authorised commercial representative resident in Turkey.

Must the representative be Turkish?

Not necessarily. Official registration requirements expressly contemplate foreign representatives, although work permit rules must be considered separately.

Do foreign documents need an apostille?

Documents issued abroad generally require apostille or appropriate Turkish consular authentication, together with Turkish translation and notarisation as applicable.

Is MERSIS used?

Yes. MERSIS is Turkey’s central commercial registry system.

Does the branch pay Turkish corporate tax?

Yes. A foreign company operating through a Turkish branch is generally a limited corporate taxpayer in relation to Turkish-source business profits. The standard 2026 corporate income tax rate for ordinary taxpayers is currently 25%.

Is VAT registration required?

The Revenue Administration’s 2026 guidance states that a foreign company’s Turkish branch requires corporate income tax, VAT and provisional tax registrations, together with additional withholding obligations where applicable.

Can branch profits be transferred abroad?

Yes. Branch profits may generally be remitted to the foreign headquarters.

What is the tax on branch profit remittance?

The current domestic withholding rate is generally 15%, subject to possible reduction under an applicable double taxation treaty.

Does the branch need E-TUYS reporting?

Yes. Foreign investors’ Turkish companies and branches make relevant foreign-investment notifications through E-TUYS.

Can the branch hire Turkish employees?

Yes, subject to Turkish employment, payroll and social security law.

Can the branch employ foreigners?

Potentially, but appropriate work permits or exemptions must be considered.

Can the foreign parent be liable for branch debts?

Because the branch is not a separate legal entity, the branch structure does not provide the same corporate liability separation as an independently incorporated Turkish subsidiary.

Can the branch have Turkish shareholders?

No. A branch does not have its own shares or shareholders.

Can part of the branch be sold to an investor?

There are no branch shares to sell. If future equity investors are expected, a Turkish subsidiary may be more suitable.

Conclusion: Should a Foreign Company Open a Branch in Turkey?

Opening a branch can provide an efficient way for an international business to establish a direct commercial presence in Turkey.

The structure offers several advantages.

A branch:

• does not require its own shareholders;
• does not have a statutory minimum capital requirement;
• can conduct genuine commercial activities;
• allows the foreign company to retain direct control;
• may hire personnel;
• may generate Turkish revenue; and
• may transfer after-tax profits to the foreign headquarters.

However, these advantages must be balanced against one fundamental legal fact:

The Turkish branch is not a separate legal entity.

The branch remains legally connected to the foreign parent company.

Consequently, establishing a branch should not be viewed solely as a cheaper or faster alternative to incorporating a Turkish company.

A foreign investor should first compare:

Branch

versus

Turkish subsidiary

versus

liaison office.

A liaison office may be suitable where the company needs only non-commercial representation or market research.

A branch may be suitable where the foreign parent wants to conduct direct commercial operations while maintaining the Turkish operation as part of the same foreign legal enterprise.

A Turkish subsidiary may be more suitable where the investor wants:

• stronger liability separation;
• independent corporate governance;
• Turkish or international co-investors;
• easier future share transfers;
• local fundraising;
• a standalone Turkish business; or
• the ability to sell the Turkish operation independently.

Where a branch is selected, the establishment process should generally be approached in the following order:

structuring analysis → review of foreign parent company’s corporate purposes → parent company branch resolution → preparation of apostilled/legalised foreign corporate documents → appointment of a fully authorised Turkish resident representative → MERSIS and Trade Registry registration → tax registration → banking and accounting setup → employment and work permit compliance → E-TUYS registration and reporting → sector-specific licences → commencement of commercial operations.

Tax planning is particularly important.

A foreign company’s Turkish branch is generally taxed as a limited taxpayer in relation to profits attributable to its Turkish operations.

For the 2026 financial year, the general corporate income tax rate applicable to ordinary corporate taxpayers is 25%.

Where after-tax branch profit is transferred to the foreign headquarters, the current domestic branch profit remittance withholding rate is generally 15%, although the applicable double taxation treaty may reduce the burden.

The parent company’s home jurisdiction and Turkey’s applicable tax treaty should therefore be examined before the final structure is selected.

Foreign companies should also pay particular attention to representation authority.

Because the Turkish branch representative acts on behalf of the foreign enterprise itself, an overly broad power of attorney can create substantial commercial exposure for headquarters.

The representative’s authority should therefore be deliberately designed around:

• contract limits;
• banking authority;
• employment authority;
• borrowing;
• guarantees;
• litigation;
• procurement; and
• other major transactions.

For multinational companies entering Turkey, the best structure is not necessarily the structure with the fewest incorporation formalities.

The correct structure is the one that provides the most appropriate balance between:

• operational flexibility;
• liability protection;
• tax efficiency;
• regulatory compliance;
• corporate control; and
• long-term strategic objectives.

A foreign company considering opening a branch in Turkey should therefore obtain a Turkish corporate and tax assessment before registration, particularly where the intended Turkish operations will involve significant contracts, employees, debt, regulated activities or potential liability.

A properly structured branch can provide a highly effective route into the Turkish market.

A poorly planned branch structure, by contrast, can unintentionally expose the foreign headquarters to Turkish operational liabilities, tax costs and regulatory risks that could have been better managed through a separate Turkish subsidiary.

This article reflects Turkish legislation and official administrative guidance available as of August 2026. It is intended for general informational purposes only and does not constitute company-specific legal, tax, accounting, employment or investment advice. Branch registration requirements, tax treatment, sector licences and work permit rules should be assessed according to the foreign company’s jurisdiction, business activity and circumstances applicable on the establishment date.