Business Structures in Turkey
1. Representative Office
A representative office allows companies to establish a minimal presence in Turkey, focusing on non-revenue-generating activities such as market research, promotional efforts, and liaison with local partners.
Key Features:
- Restricted to non-transactional activities (no sales or contracts).
- Exempt from corporate taxes, as no income is generated locally.
- Simple and quick setup process, ideal for exploratory market entry.
ÖzbekCPA’s Role:
We provide end-to-end support for setting up your representative office, ensuring compliance with Turkish regulations while you focus on building connections and understanding the market.
2. Branch Office
A branch office serves as an extension of the parent company, enabling core activities such as sales and transactions while operating under the parent company’s legal and financial structure.
Key Features:
- Not a separate legal entity; the parent company assumes all liabilities.
- Requires tax registration and compliance with local laws.
- Allows for revenue generation and contractual engagements in Turkey.
Considerations:
The lack of legal separation means that liabilities in Turkey directly affect the parent company.
3. Foreign Subsidiary
A foreign subsidiary is a separate legal entity, providing autonomy and liability protection while allowing full-scale operations in Turkey.
Key Features:
- Limited liability for the parent company.
- Eligible for local tax benefits and incentives.
- Requires a more involved setup process, including minimum capital requirements and multiple registrations.
Who Should Consider This?
Businesses planning long-term operations in Turkey with significant local autonomy and control.
Comparing Structures: Key Points
| Feature | Representative Office | Branch Office | Foreign Subsidiary |
|---|---|---|---|
| Legal Entity | Not separate | Not separate | Separate |
| Liability | Parent company liable | Parent company liable | Limited liability |
| Activities Allowed | Non-transactional | Revenue-generating | Full operations |
| Tax Obligations | None | Local taxes | Local taxes |
| Setup Complexity | Low | Moderate | High |
Employer of Record (EOR): An Alternative Approach
For businesses hesitant to commit to a full entity setup, an Employer of Record (EOR) solution offers a practical alternative.
How It Works:
- A local partner employs staff on your behalf, ensuring compliance with Turkish laws.
- Your organization retains full control over employee roles and operations.
- The EOR handles payroll, benefits, and tax filings, reducing administrative burdens.
Advantages:
- Rapid market entry without lengthy setup processes.
- Reduced liability and compliance risks.
- Flexibility to transition to a subsidiary or branch as your business grows.
Why Choose ÖzbekCPA?
At ÖzbekCPA, we are committed to being more than just a service provider. We are your trusted partner for navigating Turkey’s business landscape.
What We Offer:
- Comprehensive Expertise – Over 20 years of experience supporting international clients across diverse sectors.
- End-to-End Support – From entity selection and registration to compliance and operational management, we cover every aspect.
- Regulatory Knowledge – Deep understanding of Turkish tax laws, labor regulations, and corporate compliance.
- Tailored Solutions – Customized services aligned with your business goals and industry requirements.
- Ongoing Advisory – As your business evolves, we adapt our services to meet your changing needs.
Your Journey to Success in Turkey Starts Here
Setting up a business in Turkey can be complex, but with the right partner, it becomes an opportunity to thrive. At ÖzbekCPA, we combine local expertise with a global perspective to deliver solutions that support your growth.
Whether you’re exploring market entry through a representative office, engaging in commercial activities with a branch office, or establishing a fully-fledged subsidiary, our team is here to guide you.
Contact ÖzbekCPA today to discuss your expansion plans and discover how we can help you achieve long-term success in Turkey. Together, we’ll build the foundation for your growth.
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