Liaison Office Setup
Setting up a liaison office in Turkey for non-commercial representation, coordination and market research on behalf of a foreign company.
Scope
Established under Law No. 4875 on Foreign Direct Investment and its Implementing Regulation, with permit from the General Directorate of Foreign Investment (YSGM) under the Ministry of Industry and Technology. Initial 3-year permit (extendable); commercial activity is prohibited — only representation, coordination, market research and feasibility. The personnel income tax exemption requires evidence of FX inflow from the parent.
- Eligibility analysis — match between parent activity and the liaison office's stated purpose in Turkey
- YSGM filing dossier: apostilled parent activity certificate, balance sheet, business plan, POA
- Application tracking via YSGM E-TUYS online portal
- Securing the initial 3-year permit + extension strategy
- Tax number, MERSİS registration, opening filings
- Bank account opening — FX inflow protocol
- Personnel hiring + income tax exemption filing (parent must remit salaries in FX)
- Annual activity report preparation (filed with YSGM by end of May each year)
- Capital transfer monitoring — non-commercial activity audited annually
- Extension filing — 5-year extension at year three; conversion roadmap if investment thesis matures
Process
- 01
Eligibility
Match between parent activity and the Turkish purpose; commercial-activity risk reviewed.
- 02
Documentation
Apostilled parent activity certificate, balance sheet, POA, business plan.
- 03
YSGM filing
Submission via E-TUYS; typical 30-45 business days.
- 04
Registration + operations
Post-permit MERSİS, tax number, banking, personnel — 2 weeks.
Frequently asked
Can a liaison office make sales or issue invoices?
No. Liaison offices cannot conduct commercial activity — no invoices, no client collections. All expenses must be funded from FX remitted by the parent. Breach triggers permit revocation and retroactive corporate tax assessment.
Is personnel salary tax-exempt?
Yes, under Income Tax Act Art. 23/14: if the liaison office personnel's salary is remitted from abroad in foreign currency, it is exempt from income tax. Stamp duty and social security contributions still apply. Documentation is mandatory — if FX inflow cannot be evidenced in audit, the exemption is lost.
How do you transition from a liaison office to a company?
When Turkish operations become commercial, the liaison office is closed and a new A.Ş./Ltd. or foreign branch is incorporated — there is no automatic continuity. Typical transition takes 6-8 weeks.