Establishment of Liaison Offices in Turkey

Many foreign companies have discovered the Republic of Turkey as a rewarding place for investments because of Turkey’s rapidly expanding economy, political and economic stability and the possibility of European Union membership. As foreign investors may not be familiar with the Turkish market, they may prefer not to enter the market by immediately establishing a joint stock or a limited liability company. Another option is the establishment of a liaison office,
which enables the company to acclimate to the market and acquire a range of customers.The main difference between a Branch and a Liaison Office is that the Liaison Offices cannot carry out any activity through their offices in Turkey to generate revenue. Another difference is that the expenditures of a liaison office must be met entirely from foreign currency brought in from abroad. Liaison Office permits are granted for a period up to three years, and extension applications must be made at the end of each period or permit.

Applications of foreign companies to establish liaison offices so as to operate in sectors subject to special legislation, such as money and capital markets, insurance, etc., will be assessed by authorities and institutions authorized by the relevant special legislation. Within the context of liasion office applications of foreign companies operating in specific sectors which are required to obtain permits, licence and other authorizations in Turkey, the Ministry, where deemed necessary, may consult with the relevant instutions that are authorized to grant such permits.

Liaison offices shall send the “Data Form for Liaison Office Activities” given as Annex IV of the Regulation and its accompanying documents to the Ministry every year latest until the end of May, so as to inform the Ministry about their activities of the previous year. The extension applications of the liaison offices which do not send this Form and its accompanying documents shall not be evaluated. Furthermore, operation permits may be cancelled ex officio.

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