The opening of branches in Turkey by foreign companies has started to be applied very often with the development of the economy and our country’s becoming an important investment region. Although it is an advantageous situation for foreign companies to open branches in Turkey, it is a process that needs to be well-founded. Because the wrong or negligent legal actions made during the establishment of the branch cause legal problems in the long run.
The expansion of the activity carried out within the scope of commercial enterprise may make it difficult to manage the business from a single center, and in this situation, the trader may want to manage their business in that region through arid units instead of centrally managing them. This need leads to the opening of branches. It is possible to list the features of the branches as follows:
–The branch and the head office must belong to the same real or legal person.
-The scope of activity of the branch and the headquarters must be similar or the same.
-As a rule, the branch should actually operate in a separate location from the head office. However, the distance limit has no significance. For example, the upper floor of a building can be used as the company headquarters and the lower floor can be used as a branch.
-The branch has to use the trade name of the center by adding the branch attachment.
-Branches must be registered and announced in the trade registry of their location.
-Branches are required to register with the Chamber of Commerce and Industry of the place where they are located separately from the headquarters.
-Branches are attached to the center. Profits, losses, rights and debts provided by the branch are deemed to belong to the center.
-Branches do not have separate assets from the head office.
-Branches cannot be qualified as an independent commercial enterprise.
In addition to Turkish companies, it is possible for foreign companies to open branches in Turkey. As a matter of fact, this issue is regulated in Article 40 of the Turkish Commercial Code (TTK) and “The branches in Turkey of commercial enterprises whose headquarters are located outside of Turkey are registered as domestic commercial enterprises, provided that the provisions of their own country’s laws regarding the trade name are reserved. For these branches, a fully authorized commercial representative whose place of residence is in Turkey is appointed. If the commercial enterprise has more than one branch, the branches to be opened after the registration of the first branch are registered as the branches of the domestic commercial enterprises. is called.
The most important condition for foreign companies to open branches in Turkey is that the capital of the foreign company is divided into shares. Otherwise, it is not possible to open a branch. In order for a foreign company to open a branch in Turkey;
-First of all, T.C. It must obtain permission from the Ministry of Commerce.
-Secondly, registration must be made with the Chamber of Commerce and the Trade Registry.
After these two transactions are completed, the branch is deemed to have been established.
Required Documents for Foreign Companies to Open a Branch in Turkey
Foreign companies must submit the following documents to the Ministry of Commerce in order to open a branch in Turkey.
Application petition signed by the company or its representative. In this petition;
-Company establishment date,
-Name and surname of the fully authorized representative in Turkey,
-Commitment that the authorized representative will comply with the law and the provisions of the legislation in the transactions to be made within the borders of Turkey,
-Branch activity and
-Branch capital information is required.
-The original and translation of the decision of the authorized bodies of the company to open a branch (one copy)
-The original and translation of the company’s articles of association (as one copy)
-Incorporation document showing where, when and according to which state laws the company was established, and an operating document showing that the company is still operating. (Original and translated versions as a copy)
-Original and translation of the power of attorney of the authorized representative in Turkey (in two copies).
The said power of attorney must also include the following matters in addition to the necessary matters:
-Fulfilling the transactions shown in the company’s articles of association and representing the company,
-To represent the company in all courts as plaintiff, defendant and third party in cases arising from transactions to be made on behalf of the company,
-To appoint a proxy with the powers he/she has in case of temporary departure from Turkey,
-To be authorized to appoint a proxy to the sub-branches to be opened under the central branch.
After obtaining the permission to open a branch from the Ministry of Commerce, the following documents should be applied to the Trade Registry Office and the branch to be opened should be registered:
-Petition signed by the company official,
-Translated copy of the main contract (2 notarized)
-The decision taken by the authorized body of the company regarding the opening of the branch. In this decision; The title, full address, representatives, duration, form of representation and branch capital of the branch should be clearly written. (2 translated notarized)
-1 copy of the museum declaration and permission letter approved by the Ministry of Commerce
-Signature statement under the branch title (Original notarized)
-Power of Attorney issued for the representative of Turkey (2 copies notarized)
-Country of registration of the company
-Translated registration certificate obtained from the local authority (notarized with apostille annotation)
-Identity and residence of the branch representative (approved by notary public or headman), if the representative is foreign, a translated notarized passport copy
-Commitment according to article 29 of the Trade Registry Regulation
-Organization Notification Form
The documents and documents required for the above-mentioned foreigners to open a branch in Turkey must be collected and an application must be made to the relevant institutions.
Advantages of Foreign Companies Opening a Branch in Turkey
Turkey has a great importance due to factors such as its geopolitical position, workforce and investment potential. With the legislative changes, foreign investors were given the opportunity to establish all kinds of companies defined in the TCC, and in terms of opening branches, only the company’s capital was divided into shares. It is now possible to establish not only a joint stock or limited company, but also an ordinary company. With the regulation made, the pre-capital requirement for making investments has been removed. It is possible for foreign companies to easily transfer the payments arising from their activities abroad.
Turkey has agreements with many countries to avoid double taxation of foreign investors and companies. Thanks to this tax deduction, foreign investors are freed from the burden of double taxation. This situation encourages foreign companies and investors to invest in our country more and makes our country more attractive in terms of investment.
Long-term, permanent investments such as foreign companies opening branches in Turkey and foreign investors establishing a company in Turkey are supported by our country. In this way, investors who will make foreign direct investments have the same opportunities as domestic investors.