Establishing a Liaison Office in Turkey and
Tailor-made solutions to your financial management needs from establishment to closure of a Liaison Office.
Our main answer to the question "What is a Liaison Office?" is before carrying out the commercial activity; activities such as market research, technical support, representation, and hosting should be carried out with a liaison office on behalf of the parent company.
The legislation regarding the establishing a Liaison Office in Turkey by foreign companies is regulated by the subparagraph (h) of the 3rd article of the Foreign Direct Investment (FDI) Law No. 4875 and the Regulation for Implementation of the Foreign Direct Investment Law published in the Official Gazette dated 20.08.2003 and numbered 25205. In addition, it has been amended with the amended 6th article of the legislation published in the Official Gazette dated 03.07.2012 and numbered 28342. You can visit the following link to access the quick facts.
One of the most important issues to be considered since the establishment of the Liaison Office is that the payments made should be compliant with the law. Within the scope of the laws and regulations mentioned above, the payments of the Liaison Office employees are exempt from the income tax. The continuity of this important tax advantage depends on the regulation of the payments made in accordance with the law and reporting them on a regular basis. Official ledgers are not certified for Liaison Offices, Liaison Offices do not issue invoices; however it is still important to keep bank records meticulously. Under normal circumstances, Turkish-capital companies are prohibited from paying foreign currency by the Presidential Decision No. 32. However, Liaison Offices within the scope of limited liability perform payments in foreign currency. On the other hand, Liaison Offices are required to open a public bank account for taxes that may occur other than personnel income tax (such as rent withholding) and social security premium payments. Another important responsibility of the Liaison Office representative at this stage is to ensure this bank account to be opened. You can access the document about the financial operation of the Liaison Offices here.
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