Foreign investors may choose to invest in Turkey by establishing a branch office on behalf of an existing foreign business entity, established in another country, as an alternative to directly establishing or participating in a stock corporation.
Although being legally independent, branches are not considered as a legal person, and they are closely associated with their parent companies with respect to sharing their internal management. However, branch offices of non-resident companies in Turkey are independent in terms of accounting and conducting commercial transactions in Turkey. They are also subject to corporate taxes independently in Turkey.
Establishment of a branch in Turkey requires quite more formal requirements and documentation than establishing a new company in Turkey. In addition, only companies whose capital is divided into shares can open branches. (Joint Stock Company, Limited Liability Company, and Limited Partnership).
This process is more difficult for foreign companies that are not established in Turkey. In order for foreign companies to open branches in Turkey, it is also necessary to obtain permission from the Ministry of Trade of the Republic of Turkey.
All stages of the process are listed below along with the necessary documents.
1. First, the company must appoint a fully authorized representative, who is resident in Turkey, to open a branch in Turkey. The power of attorney, granted to the same, should include the powers, in particular on the following matters;
- To represent the company in order to fulfill the operations specified under the company's articles of association,
- To represent the company in cases arising from transactions on behalf of the company,
- To appoint an attorney in case of temporary leave from Turkey,
- To assign a representative to secondary branches that will be opened depending on the main branch
Note: This should be signed by the authorized person of the parent company and should be issued either before the Turkish Consulate and/or before the notary public. If it is issued before the notary public, it needs to be apostilled.
2. After the representative is appointed, it is necessary to apply to the Ministry of Trade for permission to be obtained by the company or the representative.
The documents sought for this application are as follows;
- The petition of application signed by the person who will be appointed as the director to the branch by the Parent Company
Such petition needs to include the Company’s Trade Name, the date of establishment of the company, the company’s nationality, the company’s capital, the name and surname of the fully authorized representative in Turkey, the commitment that the representative shall comply with the applicable laws and regulations in the transactions he will perform within the borders of Turkey, the branch’s address, the branch’s field of activity, and information on the branch’s capital.
- Branch opening declaration signed by the authorized person(s) of the Parent Company
It needs to be signed by the authorized person(s) of the Parent Company. It should be certified either by a notary public or the Turkish Consulate. If it is certified by the notary public, it needs to be apostilled accordance with the Hague Convention.
- Articles of Association of the Parent Company
It needs to be certified either by a notary public or the Turkish Consulate. If it is issued before the notary public, it needs to be apostilled.
- The certificate of establishment of the company, and the document showing that it is still operating. These documents need to be presented along with their originals and translations.
It needs to be certified either by a notary public or the Turkish Consulate. If it is issued before the notary public, it needs to be apostilled.
- The original and translation of the power of attorney granted to the representative in Turkey
It needs to be certified either by a notary public or the Turkish Consulate. If it is issued before the notary public, it needs to be apostilled.
3. After obtaining permission from the Ministry of Trade, it is necessary to apply to the respective Trade Registry Office along with the following documents:
- Documents showing that the permission has been obtained from the Ministry of Trade,
- Branch opening declaration signed by the authorized person(s) of the Parent Company
It needs to be certified either by a notary public or the Turkish Consulate. If it is issued before the notary public, it needs to be apostilled.
- Notarized power of attorney,
- Chamber of Commerce registration form,
- Statement of signature of the branch representative.
If the foreign director issues the statement of signature abroad, it needs to be issued before the notary public in Turkish (Apostille and/or translation is not acceptable.) The certified copy of the passport should also be added.
- Confirmation of the recognition in accordance with the Section 29 of the Trade Registry Regulations
- A notarized ID card if the branch representative is of Turkish national, a copy of the notarized passport if s/he is of foreign national.
Please Note: The title of the initial branches of foreign companies to be opened in Turkey must be as follows: “Parent Company’s title + country where the head office is situated + Main Branch in Istanbul".
Att. Serdar Darama
