Foreign Company Branch Opening: Turkey Operations Guide

Foreign Company Branch Opening: Basic Approach

Opening a branch of a foreign company in Turkey is a different structuring from establishing a new company. In this model, instead of creating an independent legal entity in Turkey, an extension of the parent company abroad operates. When making the decision, the parent company's field of activity, the nature of the business to be conducted in Turkey, representation authority, and foreign personnel needs should be evaluated together.

In branch opening, first, it should be clarified whether the structure to be established in Turkey is actually a 'branch'. Some investors want to conduct market research or representation activities, while others aim to start direct commercial activities. A branch is a more suitable model for conducting commercial activities in Turkey on behalf of the parent company. A liaison office is generally considered for representation and connection functions rather than commercial activities. Making this distinction correctly is important for the application process and future tax, work permit, and representation authority issues.

Parent Company Decision and Representation Authority

The parent company's decision is of central importance in foreign company branch opening. For establishing a branch in Turkey, the overseas company must make a clear decision in this direction, determine who will represent the branch, and clarify the limits of representation authority. The branch in Turkey does not act independently from the parent company; the branch's title, field of activity, and representation structure are connected to the parent company.

When determining the branch title, it should show its connection to the parent company and clearly indicate that it is a branch in Turkey. The title represents the legal identity that will be used in official records, contracts, banking transactions, and relationships with third parties. Therefore, the parent company's trade name, field of activity in Turkey, and acceptability in official records should be considered together.

Preparation of Foreign Documents

Preparation of foreign documents in the application process requires attention. Documents showing the parent company's establishment, authorized bodies, and representation status are obtained from official sources abroad. The methods of arrangement, approval, and translation for these documents to be usable in Turkey may vary according to the country of application and the nature of the document. Incomplete or documents not suitable for acceptance in Turkey may cause delays in the process.

Work and Residence Permit Planning

It is not sufficient for foreign companies planning to open a branch in Turkey to focus only on the establishment phase. Who will work when the branch becomes operational and the need for foreign managers or personnel should also be evaluated. Foreigners who want to work or reside in Turkey must apply for work permits or residence permits to the relevant Turkish authorities. The procedures and principles regarding work permits for foreigners to be employed in Turkey may differ according to sector, investment type, and nature of activity. Therefore, branch opening and work permit planning should be addressed together.

In structures with foreign partners or managers, the issue of residence permits may also come up. In residence permit evaluations for foreigners in Turkey, different grounds such as real estate acquisition, fixed capital investment, employment creation, or commercial connection may be involved. However, not every commercial plan automatically creates a right to a residence permit. The person's purpose of being in Turkey, duration of stay, and the basis of the application are examined separately.

Branch or New Company?

The difference between a branch and establishing a new capital company in Turkey should be clarified from the beginning. When a new company is established, a separate legal entity is created in Turkey. In a branch, the activity in Turkey is directly connected to the parent company abroad. This difference is important in terms of management, representation, contractual relationships, banking processes, and future permit applications. While the branch model may be more suitable for some investors, establishing a separate company in Turkey may be more functional in some cases. What determines this is what the investor wants to do in Turkey: sales, operations, representation, project management, or long-term established commercial activity.

Branch Opening Duration and File Preparation

Branch opening duration depends on factors such as whether parent company documents are ready, whether documents are arranged in a format usable in Turkey, clarity of representative information, and completeness of the application file. Especially for documents coming from abroad, approval and translation stages should be included in planning. If documents are not ready, the file must be completed before proceeding to the application stage in Turkey.

Legal consultancy at this point is not just form-filling support. It is necessary to decide with which structure the foreign company will be located in Turkey, evaluate the differences between branch and liaison office or new company establishment, establish representation authority correctly, and examine the foreign personnel plan in terms of work permits. An incorrectly structured beginning may cause problems during contract signing, banking transactions, personnel employment, or permit applications in the future.

For those who want to open a foreign company branch, the healthiest beginning is to clearly define the activity to be conducted in Turkey. What business does the parent company do, what activity will be conducted in Turkey, who will represent the branch, will foreign personnel be involved, will there be a need for residence permits or work permits for people staying in Turkey? When these questions are answered, the suitability of the branch model and the scope of the application file become much clearer. ESG Consulting supports foreign investors in evaluating company formation, branch structuring, residence permits, and work permits together in Turkey.

Important: Current procedures and application conditions for foreign company branches, work permits, and residence permits should be separately confirmed through the relevant Turkish authorities.

Frequently Asked Questions

Is opening a branch of a foreign company in Turkey different from establishing a new company?

Yes. When a new company is established, a separate legal entity is created in Turkey. In a branch, the activity in Turkey is directly connected to the parent company abroad.

Do a branch and a liaison office produce the same legal result?

No. A branch is a model closer to conducting activities in Turkey on behalf of the parent company. A liaison office is generally considered for representation and connection functions rather than commercial activities.

Why is representation authority important in a foreign company branch?

Who will represent the branch in Turkey and the limits of representation authority must be clarified. The branch's title, field of activity, and representation structure are evaluated in connection with the parent company.

Why can branch opening duration vary?

Duration depends on whether parent company documents are ready, whether documents are arranged in a format usable in Turkey, clarity of representative information, and complete establishment of the file.