**Establishing a Liaison Office in Turkey – Legal Requirements

(Complete 2025 Guide for Foreign Companies & International Investors)**

A liaison office (representative office) is one of the most strategic and low-risk ways for foreign companies to enter the Turkish market without engaging in commercial activities. It allows foreign corporations to establish a legal presence, collect market intelligence, conduct promotional work, coordinate operations, and oversee quality control, all without issuing invoices or engaging in revenue-generating activity. This makes liaison offices ideal for companies exploring Turkish expansion, preparing for investment, or coordinating regional operations.

Below is a comprehensive, long-form guide explaining legal requirements, procedures, compliance obligations, and common mistakes foreign companies must avoid.

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Understanding the Concept of a Liaison Office in Turkey

A liaison office is a non-commercial representative entity of a foreign company. It cannot engage in trade, cannot issue invoices, cannot sign commercial contracts for profit, and cannot generate income in Turkey. Its primary purpose is representation, coordination, and non-commercial research. Despite its limited scope, a liaison office must still be officially registered and fully compliant with Turkish law.

Foreign companies commonly use liaison offices for:

• Market research
• Feasibility studies
• Investment preparation
• Product promotion
• Regional coordination
• Supplier audits
• Quality control activities
• Communication with Turkish distributors or clients

Because no commercial activity occurs, tax obligations are minimal, making it a cost-effective structure for companies not ready to commit to a branch or subsidiary.

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Legal Basis for Liaison Offices in Turkey

Liaison offices are regulated under:

• Foreign Direct Investment Law No. 4875
• Regulation Concerning the Implementation of Foreign Direct Investment Law
• Ministry of Trade (Directorate General of Incentive Practices and Foreign Capital)

These laws clearly define the rights and limitations of liaison offices. Permission to establish a liaison office is not granted by the Trade Registry, but by the Ministry of Trade, making it a unique structure compared to other company types in Turkey.

The Ministry carefully reviews every application to ensure the office’s activities will remain strictly non-commercial.

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Permitted and Non-Permitted Activities for Liaison Offices

Liaison offices are allowed to:

• Collect market data
• Report Turkish market conditions to the parent company
• Manage regional coordination
• Conduct feasibility studies for potential investment
• Build professional relationships
• Engage in promotion, networking and representation
• Monitor suppliers, distributors, or manufacturing partners
• Oversee quality control
• Support parent company operations abroad

However, liaison offices are prohibited from:

• Generating revenue in Turkey
• Selling goods or services
• Signing commercial contracts
• Participating in tenders
• Issuing invoices
• Performing direct commercial negotiations
• Managing local distribution networks for profit

Any activity perceived as commercial will trigger investigation by the Ministry and may result in closure or forced conversion into a branch or subsidiary.

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Choosing a Suitable Office Address for a Liaison Office

A liaison office must have a physical address in Turkey. Virtual offices are often acceptable, provided they are licensed and recognized by local authorities. The office address is used for:

• Ministry of Trade applications
• Social Security registration (if hiring employees)
• Tax-related correspondence
• Physical inspections

Though liaison offices do not issue invoices, they must still undergo basic compliance checks from the tax office, which may visit the declared address.

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Required Documents From the Foreign Parent Company

The parent company must prepare and submit:

• Certificate of Good Standing
• Articles of Association
• Commercial registry extract
• Board resolution establishing a liaison office in Turkey
• Power of attorney
• Activity description file
• Financial statements

All foreign documents must be:

1. Notarized in the home country,
2. Apostilled,
3. Translated into Turkish,
4. Notarized by a Turkish notary.

The Ministry reviews these documents carefully before granting permission.

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Preparing the Application File for the Ministry of Trade

The application is submitted to the Directorate General of Incentive Practices and Foreign Capital. A detailed activity plan must accompany the application, explaining:

• The purpose of the liaison office
• Planned operations over the next 1–3 years
• Staffing projections
• Expected expenses
• How the office will remain non-commercial
• Reporting obligations

The Ministry evaluates whether the requested activity fits within permitted liaison office functions.

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Approval Period and Duration of Liaison Office Permits

Initial approval is generally granted for up to 3 years depending on the activity type. Certain activities—such as market research or feasibility studies—may require renewal after shorter periods.

After expiration, the liaison office must apply for renewal with updated documentation proving non-commercial activity. Liaison offices can be renewed indefinitely if they consistently comply with regulations.

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Tax Obligations and Financial Structure of a Liaison Office

Liaison offices do not pay corporate tax because they cannot generate income. However, they must:

• Maintain accounting records
• Report expenses
• Prepare annual activity reports
• Comply with payroll tax requirements (if employees are hired)
• Operate within non-commercial limits

All expenses must be funded by the foreign parent company through international bank transfers.

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Hiring Employees and SGK Obligations for Liaison Offices

Liaison offices may hire employees, including foreign nationals. When hiring staff, they must:

• Register as an employer in SGK (Social Security Institution)
• Pay social security premiums
• Withhold income tax from salaries
• Provide compliant employment contracts

Foreign employees hired by liaison offices often apply for work permits, which require supporting documentation proving the office’s non-commercial nature.

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Bank Account Requirements for Liaison Offices

A liaison office must open a bank account in Turkey to receive funds from the parent company. Banks will require:

• Liaison office registration certificate
• Parent company corporate documents
• Identity documents of the authorized representative
• Proof of address

All operational expenses—rent, salaries, utilities—must be paid through this account.

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Annual Activity Reporting Obligations

Every liaison office must file an Annual Activity Report with the Ministry of Trade by the end of May each year. The report must include:

• Summary of all activities conducted
• Evidence that no commercial activity was performed
• Updated staff list
• Total expenses
• Funding transferred from abroad
• Projected activities for the next year

Failure to submit the report can result in non-renewal or closure.

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Renewing Liaison Office Permits

To renew a liaison office permit, the foreign company must show:

• Active and ongoing non-commercial operations
• Compliance with previous reporting obligations
• Adequate funding
• Sufficient justification for continued operations

Renewals are typically granted for 1–3 years depending on the activity’s nature.

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Closing a Liaison Office in Turkey

If the foreign company no longer needs the liaison office, it must complete a formal closure procedure:

• Submit closure petition to Ministry of Trade
• Complete tax office and SGK deregistrations
• Prepare final activity report
• Notify the bank
• Close corporate records

Improper closure may result in administrative penalties later.

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Common Mistakes Foreign Companies Make When Establishing a Liaison Office

Foreign companies often make errors such as:

• Attempting commercial activity through a liaison office
• Providing insufficient documentation
• Not submitting annual activity reports
• misunderstanding limits of authority
• Poorly defining job roles for staff
• Not planning for conversion into a branch or subsidiary when needed

Legal guidance helps avoid compliance risks.

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Conclusion & CTA – How Fırat Fesih Kaya Law Firm Assists Foreign Companies in Establishing Liaison Offices in Turkey

Establishing a liaison office in Turkey is a strategic move for foreign companies seeking market intelligence, early-stage investment preparation, and regional coordination without engaging in commercial activity. However, the process involves strict legal requirements, ministry approvals, detailed documentation, and rigorous reporting duties.

Our law firm provides full English-language support for:

• Preparing and apostilling parent company documents
• Drafting applications and activity plans
• Liaising with the Ministry of Trade
• Completing registration and tax setup
• Managing annual reporting obligations
• Advising on employee hiring and work permits
• Ensuring compliance to prevent closure or penalties

If you want a fast, compliant, professionally managed liaison office setup in Turkey, we are ready to assist you.

📞 Fırat Fesih Kaya Law Firm
☎️ +90 312 434 22 22
📍 Ankara, Turkey
💼 Corporate, Commercial & Foreign Investment Law Firm – English Speaking