A foreign company that wants to trade in Türkiye has three structural options: form a subsidiary, open a branch, or establish a liaison office. The branch sits in the middle — it trades, invoices and employs like a subsidiary, but it is not a separate legal person, and that single fact drives almost every practical consequence. This article sets out what a branch requires, what it costs in exposure, and when it is the right choice.
What a branch is
A branch (şube) is an extension of the foreign parent company operating in Türkiye. It is registered with the trade registry, obtains a tax number, may invoice customers, employ staff and enter into contracts. It has no separate legal personality and no share capital of its own.
Everything that follows from that: the parent is liable for the branch's obligations without limit; the branch has no shareholders; and there is no corporate veil between Turkish operations and the parent's assets.
What registration requires
Establishing a branch involves documentation from the parent's home jurisdiction, all of which must be apostilled — or consular-legalised where the country is not party to the Hague Convention — and translated by a sworn translator in Türkiye:
- Certificate of incorporation or registry extract, current, showing the company's existence and good standing.
- Articles of association of the parent.
- A resolution of the competent organ of the parent deciding to open a branch in Türkiye, specifying the branch's address, its allocated capital, its field of activity and the appointment of the branch representative.
- The power of attorney appointing the fully authorised representative resident in Türkiye, with defined powers.
- Evidence of signature authority for those signing on the parent's behalf.
The Turkish steps — MERSIS entry, trade registry registration, Trade Registry Gazette announcement, tax office registration with a premises inspection, social security registration where there are employees — follow quickly once the documents are ready.
As with every remote structure, the timetable is set abroad. A parent whose home registry is slow, or whose signatories are dispersed, should begin document collection before anything else.
The representative
A branch must have a fully authorised representative resident in Türkiye, with authority to bind the branch. The appointment is registered, and the scope of authority is a matter for the parent to define carefully — this person can commit the parent, not merely the branch.
Where the representative is a foreign national working in Türkiye, a work permit is required. Where a Turkish resident is appointed, no permit issue arises but the choice of person becomes a governance question of real significance.
Branch, subsidiary or liaison office?
| Subsidiary | Branch | Liaison office | |
|---|---|---|---|
| Separate legal person | Yes | No | No |
| Parent liability | Limited to capital | Unlimited | Not applicable |
| May trade and invoice | Yes | Yes | No |
| Corporate tax | On worldwide income | On Turkish-source income | Exempt, subject to conditions |
| Capital requirement | TRY 50,000 / 250,000 | Allocated capital, no statutory minimum | None |
| Permission required | No | Registration only | Ministry permission |
| May employ | Yes | Yes | Yes, for representative activity |
| Set-up complexity | Moderate | Moderate to high | Moderate |
The row that decides most cases is parent liability. A subsidiary confines Turkish risk to the capital committed to it. A branch does not: a judgment against the branch is a judgment against the parent, enforceable against the parent's assets.
For that reason, the subsidiary is the default recommendation for most foreign groups, and the branch is chosen where there is a positive reason to prefer it.
When a branch makes sense
- Regulatory requirements. Certain licensed activities, particularly in financial services, may be conducted through a branch under sectoral rules.
- Tender and contract requirements. Some counterparties require contracting with the parent entity rather than with a subsidiary, and a branch preserves that identity.
- Credit standing. A branch trades on the parent's balance sheet, which can matter where a newly formed subsidiary would have no track record.
- Tax treatment of losses. Depending on the parent's home jurisdiction, branch results may be consolidated with the parent's in a way a subsidiary's are not. This is a home-country question and should be answered there.
- Short or defined-term operations. A project of limited duration may not justify a subsidiary.
Where none of these applies, the unlimited liability is difficult to justify.
Tax
A branch is taxed as a non-resident taxpayer on income derived in Türkiye, at the corporate tax rate. Profits transferred to the parent may attract withholding, subject to any applicable double taxation treaty between Türkiye and the parent's jurisdiction.
Transfer pricing applies to dealings between the branch and the parent, and the allocation of head office expenses to the branch is an area that receives attention on audit. Documentation of the basis of allocation should exist contemporaneously rather than being constructed later.
VAT applies to the branch's supplies in the ordinary way, and the branch registers and files like any other taxpayer.
Ongoing obligations
- Monthly withholding and VAT declarations.
- Quarterly advance corporate tax; annual corporate tax return.
- Social security declarations where there are employees.
- Statutory books maintained by a licensed accountant.
- Registry filings for changes to the representative, address or authority.
- Notification of changes at parent level that affect the branch's registration.
That last item is regularly missed. A change of the parent's name, address or authorised signatories has consequences for the Turkish registration, and the branch's records should be kept consistent with the parent's.
Closing a branch
Closure requires a resolution of the parent, registration of the closure, deregistration with the tax office and the social security institution, and settlement of outstanding liabilities. Employment obligations — notice, severance — must be met.
Because the parent is liable without limit, an abandoned branch is a live exposure rather than a dormant registration. Closure should be completed properly.
Frequently asked questions
Is there a minimum capital for a branch? No statutory minimum, but capital is allocated in the parent's resolution and should be adequate for the activity.
Can a branch own property? Property acquisition by foreign entities is subject to specific rules; take advice before committing.
Can a branch employ foreign staff? Yes, subject to work permits and the applicable employment criteria.
Is the parent really liable for everything? Yes. There is no separate legal personality.
Can a branch be converted into a subsidiary? Not by conversion. A subsidiary is formed and the business transferred, with tax and employment consequences to plan for.
How long does registration take? Days in Türkiye once documents are apostilled and translated; the preparation abroad determines the timetable.
Does a branch need a Turkish resident representative? Yes, a fully authorised representative resident in Türkiye.
Choosing the structure deliberately
The branch is a legitimate and sometimes necessary structure, and it is chosen too often by default — because it sounds simpler than forming a company. It is not simpler, and it exposes the parent without limit.
Dural Hukuk advises foreign companies on the choice between subsidiary, branch and liaison office, prepares the documentation required from the parent's jurisdiction, and completes registration and ongoing compliance in Türkiye. Call +90 535 260 74 54 or use the contact form on this site.
This article is general information on Turkish law as at August 2026 and is not legal or tax advice. Structural choices have consequences in the parent's jurisdiction too; take advice in both.