Türkiye Liaison Office 2026: Setup, Tax Treatment and Company Transition

Regulatory review — 11 September 2026: This guide was checked against Law No. 4875, its implementation regulation, the Ministry of Industry and Technology’s current liaison-office page, the Presidency Investment Office’s establishment guide, the Revenue Administration’s 2026 salary guide and Social Security Institution guidance. Recheck the Ministry’s current submission channel, forms and document list before filing.

Law No. 4875 permits a company incorporated under foreign law to open a liaison office in Türkiye only if it does not conduct commercial activity. A liaison office is therefore not a low-tax sales company. It is a limited presence for the non-commercial market research, representation, supplier-control or coordination activity stated in its permit.

The decisive question is not merely whether an office can be licensed, but what the Türkiye team will actually do. If the team will issue offers, bind contracts, generate revenue or run a local commercial operation, a branch or Turkish JSC/LLC should be modelled from the outset.

Quick decision table

Licensing authority, timing and filing package

The licensing authority is the General Directorate of Incentive Implementation and Foreign Investment within the Ministry of Industry and Technology. The Ministry’s current liaison-office page publishes a separate application form, undertaking, activity-information form and completion guide. Do not treat a liaison-office application as identical to the E-TUYS reporting process used for foreign-owned companies and branches; verify the current submission route with the Ministry on the filing date.

The initial permit is issued for the declared activity for up to three years. A complete establishment or extension application is expected to be decided within fifteen business days. Missing documents, sector licensing or an opinion from another authority can change that timetable; it is not an approval guarantee.

The core package includes:

1. The application form and a signed undertaking not to conduct commercial activity,
2. Evidence that the foreign-company signatory has authority,
3. The foreign company’s certificate of activity/good standing,
4. An activity report or balance sheet and income statement,
5. Authority granted to the person who will manage the office in Türkiye,
6. A power of attorney if another person will handle the filing.

For official documents issued abroad, test apostille or Turkish-consular legalisation, Turkish translation and Turkish notarisation requirements by document and jurisdiction. Follow the Ministry’s current list instead of assuming that every document for the previous three years must be apostilled.

Liaison offices in financial fields governed by specific legislation, such as capital markets and insurance, are assessed under the relevant authority’s rules. The Ministry may also request the licensing authority’s opinion in other regulated sectors.

Permitted activities and extension limits

The activity selected under the implementation regulation determines job descriptions, annual reporting and the extension analysis.

Market-research and product/service-promotion permits are not extended. At the end of year three there is no direct “conversion” into a company; the office closes or commercial activity begins through a separately established branch, JSC or LLC. A five- or ten-year extension for the other activities is not automatic. The Ministry considers past activity, the forward plan, expenditure and employment.

Testing the commercial-activity boundary

The statutory boundary is commercial activity. These actions can create a material gap between the permit file and the actual operation:

• Issuing an invoice or sales document for goods or services in Türkiye,
• Collecting sales proceeds in the office’s bank account,
• Giving the Türkiye team authority to bind prices, orders or commercial contracts,
• Linking employee bonuses directly to Türkiye sales,
• Providing paid services to group companies and recording the return as office or parent revenue,
• Continuously performing an operational activity outside the permit.

A title or email does not determine tax status on its own. Contracts, authority matrices, bank flows, employee targets and actual conduct are evaluated together. Job descriptions, signature authority, quotations and incentive policies should all remain consistent with the authorised activity.

The inspection consequences also require a distinction. If the office performs a non-commercial activity outside its permit, it is given thirty days to apply for that activity; a justified extension of up to another thirty days may be available. If commercial activity is identified, the permit is cancelled and the relevant authorities are notified. The tax outcome—permanent representation/business presence, income allocation and prior-period assessments—must then be determined from the facts.

2026 post-permit compliance calendar

Annex 4 records foreign currency brought into Türkiye, expenditure, personnel and actual activity. Where foreign currency is converted into TRY, retain the bank-certified list and foreign-exchange purchase documents requested by the form. Reconcile bank statements, parent transfer instructions, payroll, expense documents and Annex 4 annually.

Delete Form Ba and Form Bs from old 2026 checklists. Tax Procedure General Communiqué No. 565 ended those notifications from the September 2024 reporting period. A “2026 annual Ba-Bs filing” should not appear on a liaison-office compliance calendar.

Corporate tax, VAT and record keeping

In a published ruling, the Turkish Revenue Administration states that corporate-tax registration is not required where an office is established under Law No. 4875 and does not conduct commercial, income-generating or unauthorised activity. That conclusion does not mean the office has no tax or record obligations.

• Employees, rent, professional services and foreign services may require withholding, social-security or reverse-charge VAT analysis.
• The inability to issue sales invoices does not eliminate the need to retain purchase and expense evidence.
• Bank, payroll, lease, expense and Ministry-reporting records should reconcile.
• A drift into commercial activity can change the corporate-tax and VAT position for prior periods.

The accurate description is therefore limited tax, payroll and Ministry compliance for a non-revenue presence, not “no tax and no accounting.”

Article 23/1-14 salary exemption

An employee’s salary may qualify for the Income Tax Act Article 23/1-14 exemption when three core conditions are met together:

1. The employer has neither legal seat nor business centre in Türkiye and is a non-resident taxpayer,
2. The salary is funded from income earned by the employer outside Türkiye,
3. The salary is paid in foreign currency.

The statute does not require the employee to be a foreign citizen. A Turkish citizen may qualify if the substantive conditions are satisfied. Conversely, charging the salary to a Turkish company or branch, failing to evidence the funding source, or allowing the office to conduct commercial activity can undermine the position.

A bank transfer alone is not a complete evidence file. The employment agreement, employer identity, parent financials, payroll, foreign-currency transfer chain and records showing that the cost was not deducted in Türkiye should support the same conclusion. The exemption concerns income tax; social-security and stamp-tax treatment require separate review.

Transition to a JSC, LLC or QSC

A liaison office has no legal personality or share capital, so it cannot use the Turkish Commercial Code’s company type-conversion rules to become a JSC or LLC. A new capital company is incorporated separately. Commercial contracts, employees, the lease, equipment, banking and the closing balance are then handled under a controlled transition plan.

Two routes are possible:

Sequential transition: Close the office, complete closure obligations and then commence company activity. This produces a cleaner structure but may interrupt operations.

Parallel transition: Incorporate the JSC/LLC while the office stays within its permit. Commercial activity starts only in the new company, and the two entities’ personnel, banking, contracts and expenses remain separated. This may reduce interruption but requires stronger controls.

For a Qualified Service Centre, incorporating the company is only the first step. Additional Article 1 of Law No. 4875 separately requires a capital company, an affiliated group operating actively in at least three countries, listed qualifying services and at least 80% of annual revenue from foreign related entities, among other conditions. A liaison-office permit does not carry these conditions into the company.

Sector and activity fit

Action list

1. Classify every Türkiye-team duty as “information/representation” or “sale/performance.”
2. Align the board resolution, job descriptions and authority matrix with the Ministry’s current form and undertaking.
3. Build the apostille/consular, translation and notarisation chain for the activity certificate, financial report, authority document and power of attorney by jurisdiction.
4. For market research or promotion, set the year-three closure or separate-company timetable on day one.
5. Track the one-month tax-registration/lease filing and the end-May Annex 4 deadline with an owner and evidence.
6. Reconcile payroll, social security, salary-exemption and foreign-funding evidence every month.
7. When the business decides to earn revenue, keep that activity outside the liaison office and compare a Türkiye branch with a foreign-owned JSC/LLC.

Frequently asked questions

Can a liaison office issue invoices? No. It is not a vehicle for commercial activity or revenue. Local sales or service invoices require a branch or capital company.

Does the first permit extend after three years? It depends on the activity. Market-research and product/service-promotion permits are not extended. Other activities may receive an extension of up to five or ten years, subject to Ministry review.

Is the salary exemption limited to foreign employees? No. Article 23/1-14 does not impose a citizenship condition. The employer, foreign-earnings and foreign-currency-payment tests control the result.

Is the liaison office established through E-TUYS? The Ministry publishes separate liaison-office application forms and an undertaking. Do not assume that company/branch E-TUYS reporting is the same process; verify the live submission route with the Ministry when filing.

Can it convert directly into a QSC or JSC? No. A capital company is incorporated separately, and activities, employees, contracts, banking and closure steps are transitioned file by file.

Official sources

• Ministry of Industry and Technology — Liaison-office procedures and current forms
• Ministry of Industry and Technology — Direct Foreign Investments Law No. 4875
• Presidency Investment Office — Establishing a business and liaison offices in Türkiye
• Turkish Revenue Administration — corporate-tax registration ruling for liaison offices
• Turkish Revenue Administration — 2026 Salary Income Tax Guide
• Turkish Revenue Administration — Article 23/14 salary and stamp-tax ruling
• Turkish Revenue Administration — 2024 Activity Report; termination of Forms Ba/Bs
• Social Security Institution — employer obligations

For a file-specific structure test covering activity limits, the three-year exit plan, payroll/social security and a possible company transition, share the facts through the short form.