Liaison Office Establishment
Turkey’s critical location, bridging between East and West, enables CottGroup to offer our years of experience on liaison offices to many foreign investors who seek to represent their HQ in the region and explore developing Turkish markets.
Our consultants are specialized on establishment, permit renewal and closure processes of liaison offices. Thanks to our long-lasting presence in the field and familiarity with the processes, we are fully capable to operate as an intermediary between the client and government offices. Therefore, our clients are not required to deal with the complexities of the processes, while CottGroup manages all official transactions on clients’ behalf.
Global companies can establish liaison offices without engaging in commercial activities by receiving permit from the Ministry of Industry and Technology, within the scope of the Law on Direct Foreign Investments. By abstaining from commercial activities, liaison offices in Turkey are able to perform duties such as representation and hosting, controls/inspections in terms of quality and standards, provision of suppliers, communication and transfer of information, planning and research for their parent companies. As liaison offices and their employee salaries are exempt from taxes, establishment of this type of entities is a common choice of foreign investors who would like to explore Turkish markets without taking commercial risks.
The Ministry will pay attention to the details below:
- Parent company shall be established at least 1 year ago.
- Parent company’s financial tables shall be prepared for at least 1 financial year. During the application of liaison office establishment, financial reports certified by an auditor shall be presented.
- The authorities will request a capital investment in parent company’s financial tables. In certain countries, there aren’t any requirements of capital investment. In this case, the Ministry should be informed in advance accordingly.
- In case of the parent company is operating within the field of consultancy, it might be an issue during establishment and permit renewal applications of liaison offices in Turkey.
- The liaison office to be established in Turkey shall not participate in commercial and consultancy activities in any case.
- Following the establishment of the liaison office in Turkey, TL and foreign currency bank accounts must be activated immediately. Please note that any delays with the process might cause the liaison office to be shut down.
- Expenses to be made for liaison office must be processed from the local bank accounts in Turkey. Headquarters located abroad must not interfere with payments and bank accounts of the liaison office.
- If the liaison office to be established will choose the activity of “Technical Support”, parent company should have distributors in Turkey, before applying for permit renewal. The ministry will request distributorship agreements during permit extension.
- All expenses and payments of the liaison office must be paid from the foreign currency funding transferred by the parent company. All fund transfers are cross checked annually in May.