What Is a Liaison Office in Turkey?
A liaison office (irtibat bürosu), also called a representative office, is a non-commercial presence that a foreign company can establish in Turkey to conduct market research, promotion, and coordination activities. Crucially, a liaison office cannot generate revenue in Turkey — it cannot issue invoices, enter into commercial contracts on behalf of the parent, or conduct any income-generating activity.
This structure is designed for foreign companies that want to explore the Turkish market, support their operations from abroad, or maintain a local coordination point without establishing a full commercial entity.
Permitted Activities
Liaison offices are strictly limited to the following non-commercial activities:
- Market research and feasibility studies
- Promotion and representation of the parent company’s products and services
- Technical support and after-sales service coordination (without direct billing)
- Information gathering and reporting
- Communication and coordination between the parent and Turkish customers or suppliers
- Managing supply chain logistics on behalf of the parent (without local sales)
Prohibited Activities
A liaison office may not:
- Issue invoices or collect payment from Turkish entities
- Enter into binding commercial contracts in its own name
- Generate any income or revenue in Turkey
- Import or export goods commercially
- Employ staff in income-generating roles
Violation of these restrictions is a serious legal matter and may result in revocation of the liaison office permit and significant penalties.
Ministry of Industry and Technology Approval
Unlike branch offices, liaison offices require approval from the Ministry of Industry and Technology (Sanayi ve Teknoloji Bakanlığı) before they can be established. This approval is granted for an initial period of three years and is renewable.
Application Requirements
The foreign parent company must submit to the Ministry:
- Application form (available from the Ministry)
- Certificate of activity of the parent company from the home country authority — apostilled or consularly legalized
- Articles of association of the parent company — apostilled/legalized
- Power of attorney granted to the liaison office’s local representative
- Commitment letter confirming that the office will not engage in commercial activities
- Proof of the foreign company’s financial capacity (recent audited financial statements or balance sheet)
- Passport copy of the appointed representative
All documents in foreign languages must be officially translated into Turkish by a sworn translator and notarized.
Permit Duration and Renewal
The initial Ministry permit is valid for 3 years. After three years, the company must apply for renewal. At renewal, the Ministry reviews whether the liaison office has complied with the permitted activity restrictions. Renewals are typically granted in 3-year increments.
Registration After Ministry Approval
Once Ministry approval is obtained, the liaison office must:
- Register with the local tax office — to obtain a tax identification number (required even though the office pays no corporate income tax, as it still needs a TIN for employment-related filings)
- Register with SGK if employing staff — social security obligations apply to employees regardless of the office’s commercial status
Note: Liaison offices are not registered with the Trade Registry. They are not commercial entities and are not entered into the Ticaret Sicili.
Financing a Liaison Office
Because a liaison office generates no revenue in Turkey, it must be funded entirely from abroad. The parent company transfers funds from overseas to cover:
- Staff salaries
- Office rent and utilities
- Administrative expenses
- Marketing and research costs
These transfers must be properly documented. The liaison office must maintain accounting records showing the source of funds and nature of expenditures.
Tax Status
No corporate income tax: A liaison office that strictly complies with the non-commercial activity restriction pays no corporate income tax in Turkey. It is not conducting a trade or business that generates Turkish-source income.
No VAT obligations: Liaison offices do not issue invoices and are not required to register for VAT.
Payroll taxes: If the liaison office employs staff, it must withhold income tax from salaries and pay employer and employee social security contributions to SGK. These are operational costs, not income taxes.
Potential permanent establishment risk: If a liaison office conducts activities beyond its permitted scope — such as finalizing contracts or taking orders — Turkish tax authorities may deem it a permanent establishment subject to full corporate taxation. This risk must be actively managed.
Staffing a Liaison Office
Liaison offices can hire both Turkish and foreign employees. Foreign employees require valid work permits. The liaison office must register as an employer with SGK before any employee starts work.
Salaries paid to employees are fully funded by remittances from the parent company abroad. The liaison office acts as a payroll entity, withholding income tax at source and making SGK contributions.
For foreign employees, see our Work Permits guide for permit types and processing timelines (typically 4–8 weeks).
Liaison Office vs. Branch Office vs. LLC
| Feature | Liaison Office | Branch Office | LLC Subsidiary |
|---|---|---|---|
| Can generate revenue | No | Yes | Yes |
| Requires Ministry approval | Yes (initial) | No | No |
| Registered in Trade Registry | No | Yes | Yes |
| Minimum capital required | None | None | 50,000 TRY |
| Corporate income tax | None | 25% | 25% |
| Formation complexity | Medium | Medium | Low–Medium |
| Best for | Market research, coordination | Direct commercial operations | Long-term Turkish business |
Transitioning to a Commercial Entity
Many foreign companies use a liaison office as a first step to assess the Turkish market before committing to a full commercial presence. When they are ready to generate revenue, they close the liaison office and establish an LLC or branch office.
The transition is straightforward:
- Close the liaison office (notify the Ministry and tax office)
- Establish the new entity (LLC, JSC, or branch)
- Transfer staff to the new entity (with employment contract updates)
Practical Tips
- Maintain clear records of all activities to demonstrate compliance with the non-commercial restriction
- Avoid wording in correspondence that could be interpreted as making binding commercial offers
- Renew the Ministry permit before expiration to avoid a gap in legal status
- Engage a local accountant to manage payroll tax filings even though no corporate tax is owed
Costs
| Cost Item | Estimated Amount |
|---|---|
| Ministry application (government fee) | Nominal (verify with Ministry) |
| Document apostille/translation | 500 – 3,000 TRY per document |
| Tax office registration | Free |
| Professional services | $1,000 – $2,500 |
| Office space | Varies by city and size |
Frequently Asked Questions
Can a liaison office sign contracts with Turkish suppliers? No. A liaison office cannot enter into binding commercial contracts. All contracts must be signed by the parent company. The liaison office may only facilitate communication.
What happens if a liaison office generates income in Turkey? This is a legal violation. The Ministry permit may be revoked, and Turkish tax authorities may assess corporate income tax, VAT, and penalties on the deemed commercial activity.
How many employees can a liaison office have? There is no legal cap on the number of employees, but the Ministry may review the scale of the office at renewal. All employees must be compensated through funds remitted from abroad.
Does a liaison office need to file annual reports with the Ministry? Yes. At renewal time (every 3 years), the company must submit activity reports and financial documentation to the Ministry demonstrating that the office operated within its permitted scope.