Double Taxation Agreement (DTA) Benefit
Country-specific DTA
If Turkey has DTA with parent country, profit repatriation withholding may be reduced or eliminated. Example: Netherlands DTA, dividend withholding 5-15%.
Foreign Company Turkish Branch Formation
Operate in Turkey while retaining parent legal personality — apostille + translation-heavy process, 4-8 weeks.
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Key facts
- Setup time
- 4-8 weeks
- Allocated capital
- ~50,000 TRY equivalent+ (bank-confirmed)
- Est. cost
- ~45,000 TRY + translation/apostille
- Legal personality
- Parent (branch not separate)
- Tax base
- CIT (on Turkish earnings)
- Profit repatriation
- 15% withholding (reducible via DTA)
Overview
A Turkish branch is the operational extension of a foreign parent company conducting commercial activity in Turkey. The parent's legal personality is RETAINED; the branch is NOT a separate legal entity. Turkish earnings consolidate to the parent.
Apostilled parent documents (articles of association, certificate of incumbency, financial statements) + translation required. Registered under Trade Registry Regulation Art. 121-128. Allocated capital required (~50,000 TRY equivalent+, bank-confirmed).
In some cases, a subsidiary A.Ş. may be more advantageous than a branch for Double Taxation Agreement (DTA) purposes. For high-revenue projects, Pillar Two impact must be analysed — branch-attributable profit feeds group ETR.
Suitable for
- Foreign companies operating in Turkey without forming a subsidiary
- Parents in DTA-favourable countries (Netherlands, Luxembourg, Singapore)
- Turkish expansion in manufacturing, trade, services
- Operations preserving brand or patent protection
NOT suitable for
- Startups planning Turkish VC rounds (A.Ş. required)
- Structures wanting parent secrecy (branch reveals parent)
- Companies wanting independent Turkish legal personality (subsidiary fits)
Advantages
- Parent legal personality retained
- No separate legal entity — no share transfer concept
- Commercial activity permit in Turkey (can invoice, sell)
- Double Taxation Agreement (DTA) benefits
- Recognised foreign-capital investment structure
- Consolidated financial reporting under parent
Watch out
- Apostille + translation process 4-8 weeks
- Parent bears all Turkey liability
- Pillar Two impact — critical for €750M+ groups
- Turkish earnings consolidate to parent
- Bank account opening subject to foreign-capital AML review
- In some cases, subsidiary A.Ş. is more tax-efficient
Process
- 01
Document prep
Parent AoA, certificate, financials — apostilled + translated (2-3 weeks).
- 02
POA
Power of attorney to Turkish authorised representative (apostilled).
- 03
MERSİS application
Online application + document upload.
- 04
Trade Registry
Branch registration and gazette (1-2 weeks).
- 05
Tax + e-infrastructure
Tax number, e-signature, e-invoice.
- 06
Bank
Branch bank account + allocated capital deposit (incl. AML interview).
Deliverables
- Branch registration documents
- Trade Registry Gazette publication
- Tax number + certificate
- Authorised signature circular
- E-infrastructure activations
- AML interview preparation file
- Pillar Two impact note (if parent €750M+)
Required documents
- Parent AoA (apostilled + translated)
- Parent certificate of incumbency (apostilled)
- Last 3-year financials (apostilled)
- Authorised representative ID + residence
- POA (apostilled)
- Branch activity code (NACE)
- Bank confirmation (for allocated capital)
Cost
~45,000 TRY + translation/apostille costs (10,000-20,000 TRY); CPA monthly fee separate
Timeline
4-8 weeks (depends on apostille process)
Tax benefits and exemptions
Branch Profit Repatriation Withholding
CIT Art. 30
15% withholding on branch profit transferred to parent (reducible via DTA).
Legal references
- Turkish Commercial Code (TCC) No. 6102
- Trade Registry Regulation Art. 121-128
- Direct Foreign Investment Law No. 4875
- Double Taxation Agreements (DTA) — country-specific
- CIT Art. 32/D — Pillar Two QDMTT (if applicable)
Frequently asked
Branch or Subsidiary (A.Ş.)?
Branch: parent legal personality retained, profit consolidates. Subsidiary: independent legal entity, profit kept in Turkey or transferred as dividend. Decision: DTA position + Pillar Two impact + liability separation preference.
Who handles the apostille process?
In parent country: notary + apostille (if Hague Convention member) or Turkish consulate approval (if non-member). Process 5-15 business days depending on country.
How much allocated capital is required?
No specific amount in law; practice depends on bank. Typically 50,000 TRY equivalent and above is accepted. For high-volume operations, 200,000-500,000 TRY range is advisable.