The Difference Between a Liaison Office and a Branch in Turkey: Which One Suits You?

A liaison office is an office opened in Turkey, with the permission of the Ministry of Industry and Technology, by a company established under the laws of a foreign country, which carries out work such as representation, coordination, quality control or information gathering without engaging in commercial activity, and which cannot conduct business aimed at earning profit. Its name in the legislation is “irtibat bürosu” (liaison bureau). A branch (şube), on the other hand, is the arm of the foreign company in Turkey that can make sales, issue invoices and is registered with the trade registry. The choice between the two depends on whether you plan to earn money in Turkey.

In this article we explain the 5 requirements for opening a liaison office, the permitted activities and periods, how a branch is set up, and the difference between the two structures on the tax side. At the end of the article, we also add a third option, setting up a local company, to the comparison.

What is a liaison office, and what rules is it based on?

A liaison office is a foreign company’s eyes and ears in Turkey, but not its hands. The office makes contacts, gathers information and coordinates business relationships on behalf of the parent company. Signing contracts and earning revenue, however, is left to the parent company or to a separate structure to be set up in Turkey.

The legal basis is the implementing regulation issued under Foreign Direct Investment Law No. 4875. Article 6 of the Regulation states that the Ministry is authorized to grant companies established under the laws of foreign countries permission to open a liaison office in Turkey, on condition that they do not engage in commercial activity, and to extend these permits. You can access the current text of the Regulation on the Implementing Regulation of the Foreign Direct Investment Law (mevzuat.gov.tr) page.

Applications are reviewed by the General Directorate of Incentive Implementation and Foreign Capital within the Ministry. The General Directorate’s service standards table (sanayi.gov.tr) sets out the documents required for a liaison office permit and the completion period of 15 business days.

What is an irtibat bürosu, and is it the same as a liaison office?

Yes, we are talking about the same structure. The legislation and Ministry correspondence use the term “irtibat bürosu” (liaison bureau); in everyday language and investor correspondence, “irtibat ofisi” (liaison office) is also common. Using the term “irtibat bürosu” in application forms and official correspondence prevents possible confusion from the outset.

What is a liaison office, and what does the term mean abroad?

Our short answer to a foreign investor asking what a liaison office is: the Turkish equivalent of the structure known in English as a “liaison office” or “representative office” is the irtibat bürosu. Many countries have a similar representative office model; however, the scope of permitted activities and the periods vary from country to country. For this reason, the parent company’s experience with representative offices in other countries should not be transferred to Turkey one to one.

5 requirements for opening a liaison office

Reading the Regulation and the Ministry’s service standards together, a foreign company must meet the following five requirements to obtain a liaison office permit in Turkey.

1. Being a company established under the laws of a foreign country. The applicant is a company established and operating abroad. An individual living abroad cannot open an office through this route.
2. Undertaking not to engage in commercial activity in Turkey. A declaration showing the scope of the work the office will carry out and that it will not engage in commercial activity is attached to the application. This undertaking is the very reason the permit exists.
3. Operating in one of the permitted fields of activity. The office is limited to non-commercial work such as representation and hosting, supplier control, technical support, information transfer, market research, promotion or a regional management center.
4. Submitting complete and certified documents. The parent company’s certificate of activity with consular legalization or an apostille, its activity report or balance sheet and income statement, the letter of authority given to the office representative and the application form form the basis of the file.
5. Meeting a possible time requirement for newly established companies. For requests from newly established companies, the Ministry may, considering the field of activity, capital and number of employees, require that at least one year has passed since the company’s establishment.

Application documents and process steps

In practice, the file is prepared in the following order:

1. The parent company’s competent body resolves to open a liaison office in Turkey and to appoint the office representative.
2. The certificate of activity, financial statements and letter of authority are issued in the parent company’s country, apostilled or legalized by the consulate, and translated into Turkish.
3. The application form and the declaration that no commercial activity will be carried out are signed; if a representative will handle the procedures, a power of attorney is attached.
4. The file is submitted to the Ministry. Under the Regulation, formation and extension applications with complete documents are concluded within 15 business days of the application date.
5. After the permit is issued, the office registers with the tax office; the tax office registration document and a copy of the lease agreement are forwarded to the General Directorate within 1 month at the latest.

In financial fields with special legislation, such as banking, capital markets and insurance, liaison office requests are assessed by the competent authority for that field. In other sectors requiring a license, the Ministry may also decide after obtaining the opinion of the relevant authority. If your field of activity falls into one of these groups, we recommend allowing a longer timeline accordingly.

What can a liaison office do, and how many years is the permit valid?

On the initial application, a liaison office obtains a permit of up to 3 years within the declared scope of activity. An extension application made before the period expires is assessed by the General Directorate based on the office’s activities in previous years, the parent company’s business plan for Turkey, the amount of expenditure and the number of employees. The periods provided on extension differ according to the type of activity.

The last row of the table is the point most often overlooked in the field. A company that opens a liaison office only to get to know the Turkish market cannot continue with the same office at the end of 3 years. This period should be thought of as a preparation period set aside for deciding between a branch and a new company.

What notifications are made after the permit?

Obtaining the permit is only the beginning. Under Article 8 of the Regulation, when the address, the office representative or the parent company’s trade name changes, the office reports the change to the General Directorate with the relevant documents within 1 month at the latest. Every year, by the end of May at the latest, it also sends the Ministry the ANNEX-4 information form and its attachments showing the previous year’s activities.

Extension requests of offices that do not send this form are not considered, and their activity permits may be canceled ex officio. The Ministry may also inspect whether the office operates in line with the field of activity in its permit. If activity outside the permit is identified, the office is given 30 days to apply for the work it actually carries out; if commercial activity is identified, the permit is canceled and the matter is reported to the relevant authorities.

When the office is closed, the business closure inspection slip obtained from the tax office is sent to the General Directorate. The Regulation also provides that offices cannot request transfers abroad other than the balance resulting from closure and liquidation.

What is a branch, and how does it differ from a liaison office?

A branch is a business unit without separate legal personality that, while attached to the head office, conducts its commercial transactions independently. The Turkish branch of a foreign company can make sales, issue invoices and earn revenue. This is the fundamental difference from a liaison office: a branch exists for commercial activity, a liaison office for non-commercial representation work.

Since a branch has no separate legal personality, the parent company is liable for the branch’s debts and obligations. From a risk management perspective, this is the most significant difference between setting up a new company and opening a branch. The parent company’s balance sheet directly bears the risk of the activity in Turkey.

How is a branch set up for a foreign company?

The formation of a branch is completed not with a Ministry permit but with registration in the trade registry. Under Article 40 of Turkish Commercial Code No. 6102, Turkish branches of commercial enterprises headquartered outside Turkey are registered like local commercial enterprises, and a fully authorized commercial representative residing in Turkey is appointed for these branches. Article 48 of the Code also requires the branch’s trade name to show the locations of the head office and the branch and that it is a branch.

In practice, the process proceeds with the parent company’s resolution to open a branch, the designation of the commercial representative, the preparation of certified and translated formation documents, and an application to the trade registry office where the branch will be located. Since registry offices may request the document list according to their own practices, confirming the current list before applying saves time. Registration is followed by tax office registration, opening of the books and, if there are employees, social security notifications.

After registration, an obligation also arises on the foreign investment side. Under Article 5 of the Implementing Regulation of the Foreign Direct Investment Law, a branch within the scope of the Law enters its information into E-TUYS (Electronic Incentive Application and Foreign Capital Information System) through the user it has authorized. It also completes the activity information form electronically every year by the end of May at the latest.

How do a liaison office and a branch differ on the tax side?

According to the Revenue Administration’s (GİB) 2026 Corporate Income Tax Filing Guide, if a foreign company’s only activities in Turkey are those of a liaison office, a tax registration is opened in the name of the liaison office only for personal income tax withholding purposes, i.e. for the withholding and social security premium return (muhtasar, the return in which the employer reports the taxes and social security premiums it has withheld). The same guide states that a foreign company opening a branch in Turkey must be registered for corporate income tax, value added tax and advance tax.

The branch’s profit is taxed through the place of business in Turkey under the parent company’s limited tax liability. Under Corporate Income Tax Law No. 5520, the general rate is 25%; a higher rate applies to banks and certain financial institutions. Withholding also comes into play on the profit the branch transfers to the head office, and the double taxation treaty with the parent company’s country may change this burden; we recommend calculating the rate separately at the decision stage.

There is also a special rule on the wages of liaison office employees. According to the Revenue Administration’s (GİB) employment income guide, item (14) of the first paragraph of Article 23 of the Personal Income Tax Law exempts from personal income tax the wages paid in foreign currency, out of earnings derived outside Turkey, by a limited taxpayer employer that has no profit-generating activity in Turkey. The conditions of the exemption must all be met together; one of them is that the payment is not recorded as an expense in accounts in Turkey. The payroll should be structured from the start according to these conditions.

Comparison of a liaison office, a branch and a new company

A foreign company actually has three options: a liaison office, a branch, and a limited liability or joint stock company to be set up in Turkey. The table below places the criteria affecting the decision side by side.

With the local company option, capital rules come into play. Under Presidential Decree No. 7887, the minimum capital for companies established as of 1 January 2024 is 50,000 TL for limited liability companies and 250,000 TL for joint stock companies. We explained how a structure in which the foreign parent company is the sole shareholder works in our what is a joint stock company article.

Which one suits you? Three investor profiles

The decision should be made based on what the activity in Turkey looks like today and two or three years from now. The profiles below are fictitious examples; your structure needs to be assessed separately for a definitive choice.

A manufacturer wanting to get to know the market. For example, a European company working with suppliers in Turkey may only want to inspect the quality of manufacturers here without making sales. For this profile, a liaison office is often sufficient; sales are carried out by the parent company, while the office handles control and coordination.

A company that will sign contracts and issue invoices in Turkey. As soon as sales, project or service activity begins, a liaison office is no longer sufficient. If the parent company is ready to carry its risk in Turkey on its own balance sheet, a branch is considered; if it wants to separate the risk, a local company is considered.

A group considering taking on a local partner or investor. A branch cannot take on shareholders, because a branch is part of the parent company. For investors who want to work with a local partner in Turkey, transfer shares in the future or apply for an incentive certificate, a limited liability or joint stock company offers a more flexible basis. We covered the formation steps in order in our how to set up a company guide.

Mistakes we often see in practice

Some false assumptions come up repeatedly in our discussions with foreign companies:

• Thinking that an office opened with a market research permit will easily be extended after 3 years. The Regulation states explicitly that the term of these offices will not be extended.
• The office representative negotiating prices with customers or collecting orders. Such work may be considered commercial activity and puts the permit at risk.
• Postponing the end-of-May ANNEX-4 notification on the grounds that there is little activity in Turkey. Failure to submit the notification may lead to the permit being canceled ex officio.
• Reporting a change of address or office representative only to the tax office and forgetting to report it to the General Directorate within 1 month.
• Thinking that opening a branch is a way of limiting the parent company’s debt risk in Turkey. Since a branch has no separate legal personality, the risk is reflected directly on the parent company.

Wrong: “A liaison office is a small-scale branch.” Right: A liaison office is a representative unit opened with an undertaking not to engage in commercial activity; a branch is the commercial enterprise itself. The difference is not size but the nature of the activity.

The one question to ask before deciding

The choice between a liaison office and a branch is really the answer to the question of what you will do in Turkey. For representation, control and information gathering only, an office may be sufficient; from the day you start earning money, a branch or a local company comes into play. Setting up the structure correctly from the start protects you from the cost of closing the office and setting up a company from scratch a few years later.

You can find our articles on branches, liaison offices and other formation options in our Company Formation in Turkey category. Establishment of branches and liaison offices in Turkey service covers the process end to end, from the Ministry application to trade registry registration, and from annual notifications to closure procedures.

Last updated: 17.10.2026