Opening a branch in Turkey offers substantial opportunities for business expansion. However, careful planning and adherence to the Turkish Commercial Law and regulatory standards are essential. This guide provides comprehensive legal insights on establishing a branch in Turkey, with advice from Istanbul Lawyer Firm, a leading Turkish law firm.
Key Characteristics of Branches in Turkey
Branches in Turkey differ significantly from subsidiaries or independent companies. A branch is legally an extension of its parent company, obligated to operate under the same name and activities. The branch cannot independently purchase or sell major assets or diverge significantly from the parent company's primary business.
Advantages of Opening a Branch in Turkey
Turkey’s strategic location at the crossroads of Europe, Asia, and the Middle East makes it an attractive hub for global commerce. With a diverse and growing economy, Turkey presents substantial opportunities in industries such as manufacturing, technology, finance, agriculture, and tourism. Additionally, the Turkish government offers incentives and support programs, making branch establishment highly advantageous.
Step-by-Step Process to Open a Branch in Turkey
Establishing a branch in Turkey involves several critical legal and administrative steps, detailed below:
- Market Research: Conduct thorough analysis to understand local market dynamics and legal requirements.
- Documentation: Collect all required legal documents and approvals from the parent company.
- Trade Registry Application: File an application with the Turkish Trade Registry.
- Tax Office Registration: Obtain a tax identification number by registering with the local Tax Office.
- Bank Account: Open a business bank account in Turkey.
- Licenses and Permits: Secure any necessary industry-specific licenses or regulatory permits.
To navigate these steps seamlessly, it is recommended to seek legal assistance from an experienced Turkish lawyer. ER&GUN&ER Istanbul Lawyer Firm provides comprehensive support, ensuring full compliance with Turkish corporate law and effective market entry.
Market Research and Business Planning
A detailed market analysis and a robust business plan are foundational for successfully opening a branch in Turkey. Expert advice from a Turkish business lawyer ensures clarity on local business practices, legal structures, and risk assessment.
Branch Registration Process
Registration involves appointing an authorized local representative, securing a tax number, gathering necessary documentation, and filing these with the Trade Registry Office. Essential documents typically include:
- Notarized copy of the parent company's articles of association.
- Resolution from the parent company’s board authorizing branch establishment.
- Power of attorney for the branch representative in Turkey.
- Proof of adequate branch capital from a recognized bank.
Bank Account Setup
Selecting a reputable bank in Turkey is crucial for managing financial transactions efficiently. The branch must establish a corporate bank account tailored to its operational needs.
Taxation for Branches in Turkey
Branches of foreign companies are subject to Turkish corporate taxation. Income generated by the branch in Turkey is taxed at the corporate tax rate of 25%. Branches must also comply with VAT and other applicable taxes. Consulting a Turkish tax lawyer ensures effective compliance and tax planning.
For expert guidance on establishing your business branch in Turkey, consult ER&GUN&ER, an experienced Istanbul Lawyer Firm, offering specialized legal assistance tailored to international companies.
You may also read our previous article: Changing Name After Acquiring Turkish Citizenship