What Is a Branch Office in Turkey?
A branch office (şube) is an extension of a foreign parent company rather than a separate legal entity. The parent company bears unlimited liability for the branch’s activities. Foreign companies choose branch offices when they want a direct commercial presence in Turkey without creating a new legal structure.
Unlike a subsidiary (which is an independent Turkish company), a branch operates under the parent company’s name and legal identity, and all profits, debts, and obligations flow directly to the parent.
Branch Office vs. Subsidiary: Key Differences
| Feature | Branch Office | Subsidiary (LLC/JSC) |
|---|---|---|
| Legal entity | Extension of parent | Separate Turkish entity |
| Parent liability | Unlimited | Limited to capital |
| Minimum capital | None required | 50,000 TRY (LLC) / 250,000 TRY (JSC) |
| Corporate tax | 25% on Turkish profits | 25% on Turkish profits |
| Profit remittance tax | 15% withholding | 15% withholding (dividends) |
| Formation time | 10–20 business days | 5–10 business days |
| Management | Resident representative required | Manager (can be non-resident) |
Who Can Open a Branch Office in Turkey?
Any foreign legal entity (company, corporation, or equivalent) that is incorporated and legally existing in its home country can open a branch in Turkey. The parent company must be legally authorized to conduct business in its home jurisdiction.
Individual foreign entrepreneurs cannot open a branch office — this structure is exclusively for legal entities. If you are an individual, consider forming a Turkish LLC instead (see our LLC formation guide).
Registration Requirements
To establish a branch office in Turkey, the foreign parent company must prepare and submit the following documents:
- Notarized and apostilled certificate of incorporation of the parent company
- Apostilled articles of association (or equivalent charter document) of the parent company
- Board resolution authorizing the opening of a Turkish branch and appointing a resident representative
- Power of attorney granted to the branch’s resident representative in Turkey
- Passport copy of the appointed resident representative
- Evidence of the parent company’s legal existence (good standing certificate, recent trade registry extract)
- Proof of registered address in Turkey for the branch
All foreign-language documents must be officially translated into Turkish by a sworn translator and notarized.
Registration Process
Step 1: Document Preparation Abroad
The parent company’s board must pass a resolution authorizing the branch formation. All constitutional documents and the board resolution must be notarized in the home country and apostilled (or consularly legalized for non-Hague Convention countries).
Step 2: Appointment of a Resident Representative
A branch office in Turkey must have at least one resident representative (yetkili temsilci) who is authorized to bind the branch in legal transactions. This representative does not need to be a Turkish national but must reside in Turkey.
Step 3: MERSIS Pre-Registration
Complete the MERSIS (Central Registry System) online pre-registration with the branch’s details, including the parent company’s information, the branch’s business activities, and the representative’s credentials.
Step 4: Trade Registry Application
File the application with the Trade Registry Office (Ticaret Sicil Müdürlüğü) at the Chamber of Commerce in the city where the branch will operate. The trade registry will publish the branch’s establishment in the Turkish Trade Registry Gazette (Türkiye Ticaret Sicili Gazetesi).
Step 5: Tax and Social Security Registration
Register the branch with the local tax office for corporate income tax, VAT, and withholding tax obligations. If the branch will employ staff, register with SGK (Social Security Institution).
Tax Obligations of a Branch Office
Corporate Income Tax
Branch offices pay corporate income tax at 25% on profits generated in Turkey. The branch must maintain separate accounting records in Turkish and file annual corporate tax returns.
VAT (KDV)
Branch offices must register for VAT and file monthly VAT declarations. The standard VAT rate is 20%, with reduced rates of 10% and 1% for specific goods and services.
Profit Remittance Withholding Tax
When branch profits are remitted to the foreign parent company, a 15% withholding tax applies under domestic Turkish law. This rate may be reduced under applicable double taxation treaties — Turkey has an extensive treaty network covering over 90 countries. See our Double Taxation Treaties guide for treaty-reduced rates.
Transfer Pricing
Transactions between the branch and the parent (or affiliated entities) are subject to Turkey’s transfer pricing rules. Documentation must be prepared to demonstrate arm’s length pricing.
Ongoing Compliance
A branch office must comply with all standard Turkish tax and commercial law obligations:
- Monthly VAT declarations and payments
- Quarterly advance corporate tax payments (based on current-year income)
- Annual corporate tax return (filed by April 30 of the following year)
- Annual general financial statements submitted to the Trade Registry
- Maintenance of Turkish-language accounting records compliant with Turkish Accounting Standards
Practical Considerations
Unlimited parent liability is the most significant disadvantage of a branch. If the branch incurs debts or faces legal claims, the foreign parent company’s assets can be reached directly.
Reputation and operations: Clients and counterparties in Turkey may find it easier to contract with a locally incorporated entity. For businesses planning significant Turkish operations, forming an LLC or JSC subsidiary often makes more practical sense.
Regulatory sectors: Some regulated industries (banking, insurance, capital markets) have specific rules for foreign branches that differ from general commercial law. Always check sector-specific requirements.
When to Choose a Branch vs. a Subsidiary
Choose a branch office if:
- You want the simplest direct presence without a separate Turkish legal entity
- The parent company wants to directly absorb Turkish profits and losses
- Operations will be temporary or limited in scope
- Tax treaty benefits make the withholding tax rate competitive
Choose a subsidiary (LLC or JSC) if:
- You want to limit the parent company’s liability
- Long-term Turkish operations are planned
- You want operational independence from the parent
- Ownership of Turkish real estate or significant assets is anticipated
Costs
| Cost Item | Estimated Range |
|---|---|
| Document apostille/legalization abroad | Varies by country |
| Sworn Turkish translation | 500 – 2,000 TRY per document |
| Notary fees in Turkey | 1,500 – 3,000 TRY |
| Trade Registry fees | 1,500 – 3,500 TRY |
| Professional services | $1,500 – $3,500 |
| Registered address | $50 – $200/month |
For full cost details, see our Company Formation Costs in Turkey guide.
Frequently Asked Questions
Does a branch office need minimum capital? No. Turkish law does not require a branch office to have a minimum registered capital, unlike LLC (50,000 TRY) or JSC (250,000 TRY) formations.
Can a branch office hire employees? Yes. A branch office can hire Turkish and foreign employees. Foreign employees will need valid work permits. See our Work Permits guide for details.
How long does branch registration take? Typically 10–20 business days after all apostilled and translated documents are ready in Turkey. Document preparation abroad may add several additional weeks.
Is the branch a separate legal entity from the parent? No. A branch is legally part of the parent company. The parent bears full responsibility for all branch obligations, debts, and liabilities.