Opening a Branch in Turkey: Legal Compliance and Strategic Setup for Foreign Companies

Business team opening a foreign company branch in Turkey with legal counsel

Expanding into Turkey through a legally registered branch allows foreign companies to operate commercially while remaining tied to their home jurisdiction. Opening a branch in Turkey is a strategic choice for companies that want to test the market, avoid full incorporation, and retain centralized control. Istanbul Law Firm, a top-tier Turkish Law Firm, guides international clients through the branch registration Turkey process with precision and speed. Our experienced Turkish Lawyers prepare all documentation, liaise with the Turkish Trade Registry and Tax Office, and ensure local compliance. Recognized as the best lawyer firm in Turkey for corporate establishment, we offer full-service legal solutions for branch setup, governance, and operation. Our English speaking lawyer in Turkey coordinates with your HQ, interpreters, and advisors for seamless cross-border implementation.

1. Legal Definition of a Branch under Turkish Commercial Law

Under Turkish Commercial Law, a branch (şube) is a secondary establishment of a foreign company that engages in commercial activity in Turkey while remaining legally dependent on the main entity. Istanbul Law Firm helps clients understand the rights and obligations of branches as non-autonomous business units. Our Turkish Lawyers explain that branches do not have separate legal personality but can sign contracts, invoice customers, and employ staff in Turkey. The branch acts under the authority of the parent company and is fully liable for its debts and obligations. As a regulatory-aware Turkish Law Firm, we ensure your branch structure is compliant with Article 40 of the Turkish Commercial Code. Our English speaking lawyer in Turkey breaks down legal status and practical implications for international corporate teams.

A branch must be registered with the Turkish Trade Registry and obtain tax numbers and operational permits under its parent company name. Istanbul Law Firm prepares the branch charter (şube iç tüzüğü), appoints the legal representative, and drafts board resolutions authorizing the opening. Our Turkish Lawyers ensure all official translations, apostilles, and notarizations are in order. We also assist with Chamber of Commerce coordination and publication in the Turkish Trade Gazette. Our English speaking lawyer in Turkey keeps foreign stakeholders informed at each regulatory milestone.

Once registered, the branch operates as an extension of the foreign legal entity and is subject to Turkish law for labor, tax, and commercial transactions. Istanbul Law Firm structures your branch to optimize legal control, operational efficiency, and compliance. Our Turkish Lawyers also advise on risk mitigation, legal liability, and cross-border reporting obligations. As the best lawyer firm in Turkey for foreign enterprise structuring, we help you launch with legal confidence. Our English speaking lawyer in Turkey ensures your global and local teams speak the same legal language.

2. Branch vs. Subsidiary: Key Legal Differences

Foreign companies entering Turkey must choose between opening a branch or incorporating a subsidiary. Istanbul Law Firm outlines the legal and operational distinctions to help you select the optimal structure. A branch is not a separate legal entity, while a subsidiary (typically a limited company) is fully incorporated under Turkish law. Our Turkish Lawyers explain that subsidiaries offer more legal autonomy but involve greater compliance, capital, and governance requirements. Branches provide quicker setup, less formality, and centralized decision-making. Our English speaking lawyer in Turkey provides decision matrices for boards weighing both options.

Taxation also differs between branches and subsidiaries. A Turkish branch is taxed as a permanent establishment of the foreign entity and must submit corporate tax returns in Turkey, while profits may be remitted abroad without dividend withholding tax. In contrast, a subsidiary is subject to dividend tax and is treated as an independent taxpayer. Istanbul Law Firm works with your tax advisors to model financial outcomes and regulatory impact. Our Turkish Lawyers guide clients on profit repatriation, tax optimization, and legal risk exposure. Our English speaking lawyer in Turkey supports CFOs and legal counsel in choosing a tax-efficient route.

Branch governance is simpler, but it limits local equity investment, licensing flexibility, and liability shielding. Istanbul Law Firm advises clients launching in regulated sectors or with Turkish shareholders to consider subsidiary formation. Our Turkish Lawyers also structure phased market entry with initial branch operations followed by conversion into a subsidiary. As the best lawyer firm in Turkey for comparative market entry, we help clients align corporate strategy with legal form. Our English speaking lawyer in Turkey ensures clear comparisons across jurisdictions.

3. Step-by-Step Process for Branch Registration in Turkey

Establishing a branch in Turkey requires a structured, multi-step procedure before the Trade Registry and Tax Office. Istanbul Law Firm manages the entire process for foreign companies, starting with the preparation of a branch charter and notarized documents from the parent company. Our Turkish Lawyers prepare the board resolution authorizing the branch opening and appointing a local legal representative. We also assist in drafting powers of attorney and internal regulations (şube iç tüzüğü). Our English speaking lawyer in Turkey ensures proper legal interpretation of every document and requirement for global headquarters.

Once documents are ready, the application is filed with the Trade Registry Office where the branch will operate. Istanbul Law Firm coordinates with Chamber of Commerce officials, pays required fees, and tracks approval status. Our Turkish Lawyers ensure that company statutes, apostilled certificates, and translated materials are accepted without delay. Following approval, the branch is registered in the Turkish Trade Gazette and issued a registration number. Our English speaking lawyer in Turkey keeps foreign teams updated on every registration milestone with bilingual reports.

After registry approval, operational registration steps follow: tax number acquisition, workplace registration, and, if applicable, municipal licenses. Istanbul Law Firm handles tax office notification, social security registration, and bank account opening support. Our Turkish Lawyers file final registration documents with tax authorities and oversee completion. As the best lawyer firm in Turkey for corporate registration, we execute full establishment in a timely and legally sound manner. Our English speaking lawyer in Turkey assists in ongoing compliance, payroll setup, and regulatory communication.

4. Required Documents and Notarization Procedures

Branch registration requires both Turkish and foreign-origin documents to be prepared, translated, and notarized. Istanbul Law Firm provides a complete checklist including: parent company’s articles of association, certificate of incorporation, board resolution for branch opening, appointment of branch representative, and authorized signature list. Our Turkish Lawyers ensure all foreign documents are apostilled or legalized, translated into Turkish by sworn translators, and notarized locally. Our English speaking lawyer in Turkey coordinates with your home country counsel and Turkish notaries to ensure accuracy and compliance.

Notarization is required for translations, declarations of signature (imza beyanı), and Power of Attorney if the branch representative is not present during the application. Istanbul Law Firm works with notaries and translation offices to expedite documentation. Our Turkish Lawyers attend notary appointments and validate each document’s compliance with Turkish registry format. As a document-precision Turkish Law Firm, we prevent rejection or return due to formatting errors. Our English speaking lawyer in Turkey ensures that each document submitted aligns with both Turkish and international corporate standards.

All documents are submitted as a single bundle to the relevant Trade Registry, including company structure charts and signature circulars. Istanbul Law Firm packages each submission professionally and manages any follow-up clarifications. Our Turkish Lawyers also track expiration dates for apostilles or notarized documents. Our English speaking lawyer in Turkey organizes documentation for your internal records and maintains digital archives for post-registration use.

5. Tax Registration, Social Security and Operational Setup

After the branch is registered, it must be registered with the local tax office and social security institution to become fully operational. Istanbul Law Firm completes these registrations on behalf of the foreign company. Our Turkish Lawyers file tax registration forms (vergi levhası), notify the corporate income tax system, and secure a Turkish tax identification number (VKN). We also advise on the branch’s accounting method, tax representative designation, and financial reporting obligations. Our English speaking lawyer in Turkey supports your global finance and tax compliance teams.

Social security (SGK) registration is necessary if the branch will employ staff in Turkey. Istanbul Law Firm handles workplace registration, e-declaration access, and employee onboarding procedures. Our Turkish Lawyers also advise on payroll, insurance coverage, and employer contributions. We assist in preparing employment contracts aligned with Turkish Labor Law. As the best lawyer firm in Turkey for corporate operations, we align legal structure with HR compliance. Our English speaking lawyer in Turkey supports employment onboarding, templates, and benefits registration for international HR teams.

Additional operational steps may include commercial signage registration, municipal approvals, and lease registration if the branch has a physical office. Istanbul Law Firm ensures compliance with zoning, environmental, and occupational safety laws. Our Turkish Lawyers coordinate with local municipalities and prepare lease annotation filings with the land registry. Our English speaking lawyer in Turkey ensures seamless communication and documentation for opening physical locations under a branch structure.

6. Legal Responsibilities of the Branch Representative

The branch representative in Turkey holds significant legal responsibilities on behalf of the foreign company. Istanbul Law Firm helps clients appoint a qualified representative who will act under the parent company’s authority but in compliance with Turkish commercial and civil law. Our Turkish Lawyers ensure the representative’s name, scope of authority, and liability are clearly defined in the registration documents. We also file the official signature declaration (imza beyanı) and Power of Attorney before a Turkish notary. Our English speaking lawyer in Turkey explains these responsibilities in detail to international clients and corporate boards.

The branch representative must act within the authorized scope, sign contracts, manage bank accounts, submit tax declarations, and represent the company in administrative or legal proceedings. Istanbul Law Firm provides ongoing legal guidance to branch managers to prevent unauthorized transactions or liability breaches. Our Turkish Lawyers monitor compliance with regulatory filings, annual reporting, and employment contracts. As the best lawyer firm in Turkey for corporate representation, we ensure that your appointed branch manager operates with legal protection and oversight. Our English speaking lawyer in Turkey provides management briefings and legal opinion letters when needed.

If the branch representative is changed or resigns, immediate notification to the Trade Registry and Tax Office is required. Istanbul Law Firm handles resignation procedures, new representative appointments, and registry updates. Our Turkish Lawyers also prepare resignation acceptance resolutions and signature circulars for continuity. We ensure a smooth leadership transition and preserve operational legality. Our English speaking lawyer in Turkey provides instructions to HR and management on maintaining uninterrupted branch operations during such transitions.

7. Financial Reporting, Taxation and Transfer of Profits

Even though a branch is not a separate legal entity, it is still subject to Turkish tax law and must maintain independent books and financial records. Istanbul Law Firm assists clients in registering with the tax office and establishing financial reporting structures in line with Turkish standards. Our Turkish Lawyers coordinate with certified public accountants (SMMM) to prepare monthly VAT filings, annual income tax returns, and payroll declarations. As a tax-aware Turkish Law Firm, we ensure accuracy, compliance, and alignment with the parent company’s financial strategy. Our English speaking lawyer in Turkey liaises with international finance teams to align Turkish operations with global reporting cycles.

Branches pay corporate tax on profits earned in Turkey, typically at 25%. Unlike subsidiaries, branches may remit their profits abroad without being subject to dividend withholding tax, as long as relevant documentation is filed. Istanbul Law Firm advises on repatriation procedures, intercompany charges, and double taxation treaties. Our Turkish Lawyers assist in drafting profit distribution reports, currency conversion declarations, and bank transfer approvals. Our English speaking lawyer in Turkey explains the entire process and prepares bilingual documents for foreign head offices and auditors.

Branches must also comply with audit requirements if they exceed financial thresholds set by the Ministry of Trade. Istanbul Law Firm helps prepare for statutory audits and advises on risk areas such as expense allocation, transfer pricing, and non-deductible expenses. Our Turkish Lawyers liaise with CPAs and legal auditors to ensure transparency. As the best lawyer firm in Turkey for corporate taxation and financial structuring, we reduce the risk of tax penalties and administrative fines. Our English speaking lawyer in Turkey provides compliance calendars and audit readiness checklists in English and Turkish.

8. Common Pitfalls and Legal Risks in Branch Operations

Despite its simplified structure, operating a branch in Turkey carries specific legal risks that must be proactively managed. Istanbul Law Firm identifies and addresses frequent issues such as unauthorized transactions, labor law non-compliance, tax misfiling, and late registry updates. Our Turkish Lawyers review internal controls, approval hierarchies, and document retention policies to limit exposure. As a risk-mitigation-driven Turkish Law Firm, we help build compliance programs that match both Turkish legal standards and global corporate governance. Our English speaking lawyer in Turkey conducts compliance audits and staff briefings in multinational settings.

One of the most overlooked risks is lack of clarity in the relationship between the branch and the parent company. Istanbul Law Firm drafts internal agreements that define financial flows, management responsibilities, and service expectations. Our Turkish Lawyers also assist in cross-border contract review, licensing limits, and employment structuring. We ensure that Turkish courts and authorities recognize the foreign company’s legal authority while limiting liability spillover. Our English speaking lawyer in Turkey prepares internal policy manuals and training for branch staff.

Failure to comply with regulatory updates, tax reform, or trade registry obligations may result in fines, closure, or criminal exposure. Istanbul Law Firm tracks all legal changes affecting foreign branch operations and issues timely compliance alerts. Our Turkish Lawyers submit amendments, renewal filings, and registry corrections to prevent legal issues. As the best lawyer firm in Turkey for proactive compliance, we support our clients in avoiding problems before they arise. Our English speaking lawyer in Turkey ensures all notifications and government correspondence are managed effectively.

9. Sector-Specific Considerations and Licensing Requirements

Certain industries in Turkey require additional licenses and regulatory approvals for branch operations. Istanbul Law Firm advises foreign companies in sectors such as banking, insurance, telecom, energy, education, and healthcare on the relevant authority filings. Our Turkish Lawyers liaise with the Banking Regulation and Supervision Agency (BDDK), Energy Market Regulatory Authority (EPDK), Information Technologies Authority (BTK), and other bodies to obtain sectoral licenses. We ensure your branch complies with licensing rules, minimum capital, and local staffing obligations. Our English speaking lawyer in Turkey provides foreign clients with licensing flowcharts and sector-specific guidance in English.

Branches in regulated industries may also be required to submit periodic reports, appoint compliance officers, and maintain additional capital buffers. Istanbul Law Firm prepares internal policies, compliance documentation, and periodic reporting templates. Our Turkish Lawyers help clients implement anti-money laundering (AML), data protection, and competition law frameworks. As the best lawyer firm in Turkey for regulated market entry, we help you meet all sectoral compliance expectations. Our English speaking lawyer in Turkey facilitates regulatory inspections and provides ongoing bilingual support for risk and compliance teams.

Failure to secure the right permits may result in branch closure or prosecution. Istanbul Law Firm conducts pre-entry due diligence and regulatory checklists for each industry. Our Turkish Lawyers advise on cross-border licenses, reciprocal recognition, and local representation. We also help prepare project-specific authorization files. Our English speaking lawyer in Turkey helps multinationals open legally sound and regulator-approved branches in Turkey.

10. Why Choose Istanbul Law Firm for Branch Setup in Turkey

Istanbul Law Firm offers end-to-end legal support for opening and operating a branch in Turkey. Our Turkish Lawyers handle incorporation, registry filings, tax and SGK registration, representative appointment, and all supporting documentation. We serve as your legal partner from decision to operation. As the best lawyer firm in Turkey for foreign business setup, we provide reliable, timely, and bilingual execution. Our English speaking lawyer in Turkey ensures your global teams receive real-time updates and legal clarity at every step.

We don’t just register—we advise, manage, and protect. Istanbul Law Firm supports ongoing compliance, contract drafting, regulatory filings, and dispute resolution. Our Turkish Lawyers ensure your branch operates with full legal confidence and strategic efficiency. Whether you’re testing the Turkish market or managing large-scale operations, we deliver solutions aligned with global corporate strategy. Our English speaking lawyer in Turkey builds legal bridges between your head office and Turkish authorities.

Open your Turkish branch with Istanbul Law Firm—and do business legally, efficiently, and confidently.

Frequently Asked Questions (FAQ)

  • Can a foreign company open a branch in Turkey? – Yes, with required documents and trade registry approval.
  • Does a branch need capital? – No minimum capital is required, but sufficient operational funds are expected.
  • Is a branch a legal entity? – No. It operates under the foreign company’s legal personality.
  • How long does it take to register a branch? – Typically 2–4 weeks, depending on document readiness and translation.
  • Can a branch hire employees? – Yes. Branches must register with SGK and can employ local or foreign staff.
  • What taxes does a branch pay? – Corporate tax on Turkish income, plus VAT, stamp duty, and payroll taxes.
  • Can a branch repatriate profits? – Yes. With proper documentation, profit transfer abroad is allowed tax-free.
  • What documents are required? – Incorporation certificate, articles, board resolution, POA, and translations.
  • Who is responsible for branch actions? – The branch representative and ultimately the parent company.
  • Is a physical office needed? – Yes. A local address is required for registry and tax purposes.
  • What if we operate in a regulated sector? – We help secure all required sector-specific licenses and permissions.
  • Why choose Istanbul Law Firm? – We provide expert, bilingual, and strategic legal support from setup to compliance.

Open Your Turkish Branch with Legal Precision

Istanbul Law Firm helps foreign companies establish branches in Turkey efficiently and lawfully. Our Turkish Lawyers and English speaking lawyer in Turkey handle every legal and regulatory detail, from documentation to tax and operations.