Establishing a Branch Office in Türkiye

Establishing a branch office in Türkiye allows foreign companies to operate directly in the Turkish market without forming a separate legal entity such as a Limited Liability Company (Ltd. Şti.) or Joint Stock Company (A.Ş.). A branch remains legally part of the parent company but operates with organizational and financial independence. The establishment of a branch is subject to the Turkish Commercial Code and requires registration with the Trade Registry along with fulfilment of specific legal and administrative requirements.

What is a Branch Office?

A branch is an organizationally and financially autonomous extension of a company that operates at a different location than the company headquarters. It enables continuous business operations. The resolution of the parent company to establish a branch replaces the articles of association. Once registered, a branch gains legal capacity as an independently operating organisational unit, enabling it to conduct business and sign contracts.

What is the procedure for a foreign company to establish a Turkish branch?

The registration procedure at the Turkish Trade Registry requires submission of the following documents:

Board resolution of the parent company stating the establishment of a branch in Türkiye, the appointment of a branch manager, and the allocation of a specific capital amount, notarised and apostilled.
A notarised copy of the articles of association or statutes of the parent company, bearing an apostille.
Excerpt from the commercial register of the parent company, notarised and apostilled.
Declaration by the parent company with details of the planned area of activity of the branch, the capital allocated to the branch and the parent company itself, notarised and apostilled.
Notarised specimen signature of the appointed branch manager. If the certification is carried out by a foreign notary, the specimen signature must then be apostilled.
Statement of acceptance by the branch manager.

All foreign-language documents must be translated into Turkish and notarized before being submitted to the Trade Register.

Furthermore, the Trade Register requires the submission of the following forms, which must be signed by the founder or their representative:

Application for branch registration

Registration with the Chamber of Commerce (the registration must be accompanied by a passport photo of the founder or, if the founder is a legal entity, a photo of the representative of the legal entity).
Form for notification of establishment (this must be completed if the founder is a Turkish citizen living abroad, a foreign citizen or a foreign legal entity).

Upon successful registration, the Trade Registry notifies the Tax Authority and the Social Security Institution of the establishment of the branch.

Legal Name Format of a Branch Office in Türkiye

The official name must include the parent company name + the country of incorporation + the branch location in Türkiye.

Example: X GmbH Merkezi Almanya Istanbul Merkez Şubesi
(X GmbH based in Germany – Central Branch Istanbul)

What Needs To Be Done After Registration?

The branch manager must issue a notarized signature circular indicating the type (individual/joint) and scope (limited/unlimited) of the signing authority. This signature circular serves as proof of signing authority.
A Turkish bank account must be opened in person (not via proxy) by the branch manager.
A certified tax advisor or accountant must be appointed for payroll and tax declarations.

How Is the Branch Represented?

The branch is represented by the appointed branch manager. The manager may be granted limited or unlimited signing authority, to be defined by a notarized power of attorney issued by the parent company.

Advantages and Disadvantages of a Branch Office

Advantages:

No minimum capital requirement: Unlike LLC or JSC structures, there is no legally required capital threshold, meaning that a branch office can be established with any amount of capital.
Simplified administrative structure: No general assembly or board of directors required. All decisions are made by the parent company.
Full control: The parent company retains direct and full control over the branch activities, which enables closer integration into the global corporate structure.

Disadvantages:

Unlimited liability: The parent company is fully liable for all obligations of the branch. This increases the financial risk.
Limited business scope: The branch cannot operate beyond the parent company’s stated business objectives in Türkiye This can restrict flexibility.
Tax liability: Turkish corporate income tax applies to profits generated in Türkiye. Double Taxation Agreements (DTAs) between Türkiye and the parent company's country of residence may affect tax burdens.
Market perception: Branches may be perceived as less "local" compared to fully incorporated entities, which can impact business relations or market position.

Legal support during the establishment of a branch office

The above points only provide an insight into the establishment process of a branch office. For individual advice on the establishment of a Turkish branch office, please contact our law firm directly.

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