Total Expenses APPROXIMATELY : 1.970€ / 1.565£
Capital Undertaken minimum : 2.565 € / 2.040£
Important Note: Total amount of these expenses may be varied between -+10% ratio depending on the size of the “Articles of Association”, amount of the capital, number of signatures and POA.
OPENING A BRANCH FOR FOREIGN COMPANIES
A- GENERAL INFORMATION
Foreign companies based abroad and their capital divided into shares can open a branch (branches) in Turkey with getting a permission form the Ministry of Commerce and Industry (MoCI).
Following transactions are subject to the approval of the MoCI:
-Opening a branch,
-Opening secondary branches associated with the main branch,
-Substitution of the Company representative in Turkey,
-Changing title, business type or address of the main branch,
-Increasing the branch’s capital,
-Closing down or liquidation of the branch.
B- GETTING PERMISSION FROM THE MOCI
Before starting any transaction pursuant to opening a branch in Turkey, the Foreign company should have a fully authorized company representative assigned who is resident of Turkey.
Then the following documents should be prepared and delivered to the Directorate General of the Domestic Trade of the MoCI.
C- NECESSARY DOCUMENTS TO PREPARE AND TO DELIVER
The petitions required to be stamped by the company or signed by the authorized representative and should include the following required information:
-Title of the Company,
-Establishment date of the Company,
-Nationality date of the Company,
-Capital amount of the Company,
-Name, Nationality and Address of the authorized representative residing in Turkey,
-A letter of commitment pledges that authorized representative shall obey all relevant regulations and laws concerning their activites in Turkey,
-Address of the branch,
-Field(s) of activity of the branch
C-2- Following Documents Should Be Attached To The Petition:
Company‘s written confirmation of the decision to open a Branch (4 copies)
Original and a copy of the company‘s apostilled Articles of Association (2 copies)
Establishment and Current Status Documents showing establishment place, time, followed Law and current legal status of the Company (original documents and 2 certified copies)
A Power of Attorney drawn by the Company in favor of its resident representative, assigning full representation and accountability.(2 copies)
* Certified Turkish translations of documents prepared in a foreign language are required.
D-TRADE REGISTRY OFFICE PROCEDURE
Certain documents, including the branch-opening permit from the Ministry of Industry and Trade, must be submitted to the Trade Registry Office. These documents are listed in the document section below
An application in the Turkish language signed by an authorized person
Branch-opening permit obtained from the Ministry of Industry and Trade
2 notarized and legal copies of the Power of Attorney
Turkish document ‘ Müzeyyel Beyanname ve ilanı‘
If the branch representative is a Turkish national, a notarized copy of his ID card, if not, a notarized copy of the passport of the foreign authorized representative
Company signature authority showing the representative‘s signature on file and title (2 copies)
Letter of Commitment in accordance with Article 29 of the Trade Registry Regulation
A Chamber Registry Declaration Form, obtained from Trade Registry Office
All documents and forms required by the Ministry of Industry and Trade. Must be submitted to the Directorate General of Domestic Trade at:
Sanayi ve Ticaret Bakanlığı, İç Ticaret Genel Müdürlüğü Eskişehir Yolu 7. Km.
REPRESENTATIVE OFFICE ESTABLISHMENT IN TURKEY
A- GENERAL INFORMATION
A representative office established by non-resident individuals and legal entities with social, cultural or economical purposes conducting such market research at the country of investment, close follow up of business opportunities at the country of investment and offering information to the main company.
The representative offices cannot carry out any commercial activities in any case and cannot have activities in other fields, which is outside the terms of given permission
Companies based abroad can promote their business by opening a Representative Office. For matters of establishing a representative office in Turkey, the following conditions should be present:
1- The legal entities who wish to establish a representative office in Turkey should be founded upon Foreign Legislation and the founded legal entity should be a corporate entity.
2- The representative office to be established in Turkey shall not conduct commercial activities in Turkey.
The permit issuing authority for opening a Representative Office in Turkey is the Directorate General of Foreign Investments, Undersecrerariat of Treasury.
The requests of foreign companies for opening representative offices for fields such as capital markets, insurance trade are assessed by organizations and institutions which are authorized upon specific legislation.
B-1-Necessary Documents For Application:
With the following documents, to the GDFI will be applied for establishing a representative office in Turkey:
-Apostilled original commercial activity certificate belonging to the main company
-The activity report or balance sheet or income table prepared for the main company (of the previous year),
-The original certificate of authority given to the person entitled to act on behalf of the representative office,
-In case the establishment procedure is carried out through the mediation of another person, the original power of attorney.
The public notary certified translations of these documents should be presented during application. In addition, a detailed petition containing the presentation of the company demanding to establish a representative office in Turkey and the planned future activities for the representative office should also be produced.
When the necessary documents are presented and the required forms are complete, the permission is given within 5 business days.
A copy of the registration certificate to the Tax Department for the representative offices who has the establishment permission is sent to the GDFI within a month. In case of an address change, the new address shall be informed to the GDFI within a month.
C- SOME ISSUES WHICH WORTH MENTIONING
The following procedures should be complied:
C-1- Registration To The Tax Department
After the permission is obtained from GDFI, an identity number should be obtained from the tax department and a tax liability of income tax (witholding tax) for the representative office should be created. After the “Registration Form for Legal Entities” is filled out at the tax department, its copy should be sent to the GDFI within a month. If the representative office rents its office in Turkey, the rent contract shall be sent to the GDFI as well.
In case of address changes, GDFI and the tax department should be informed regarding the new address within a month.
C-2- Sending The “Information Form About Activities” By The Representative Offices
Every year, through the end of May, an “Information Form About the Activities of Representative Offices” which is attached to the relevant by-law (Appendix 4) is filled out and sent to the Undersecretariat. With these forms, the documents proving that the expenses of the past year were allowed by the foreign currency, sent from abroad.
C-3- Expenses Of The Representative Offices
All expenses of the representative offices are allowed with the foreign currency which is brought into Turkey from abroad. Moreover, these offices cannot claim transfers for profit and similar earnings, other than close-out and liquidation.
C-4- Profit Transfer
The representative offices in Turkey shall not have any income gearing activities, therefore they cannot claim any profit transfers.
C-5- Necessary Permission Given By GDFI
A maximum activity permission of 3 years is given to the representative offices. For the duration extension requests, the past activities, future plans and targets of the representative office are taken into consideration and a maximum duration of a 3 year extension is granted each occurence. In addition, the representative offices can be converted into companies as well as branches, at the end of the permission period.
In case a representative office terminates its activities, for the closing transaction, the cease-work – inspection record obtained from the relevant tax department is sent to the GDFI. The offices are not entitled to any transfer claims except for the remainder amount which is a result of liquidation.
FREE ZONES IN TURKEY AND THE ESTABLISHMENT OF A COMPANY IN THE FREE ZONES
The free zones are regulated with the Free Zones Act, The Free Zones Implementing Regulation, The Establishment, Duty, Authority and the Working Basis for the Free Zone Managements, the Decision about the Matter of Payments which can be made with Turkish Lira in the Free Zones and The Free Zones General Management Notice.
If needed to summarize in general the Free Zones; may be defined as the places which although are in the country�s political borders are excepted as outside the customs frontier, and while valid in the country the legal and administrative regulations on commercial, financial, and economics are not applied or partially applied, where encouragement for industrial and commercial activities is given more widely and are places which are physically apart from the country�s over parts. The definition of the free zones is made in the 3218 numbered Free Zones Act under the title of EXEMPTIONS AND INCENTIVES in article 6( alteration article 29.01.2004-5084 numbered ), (Alteration paragraph: 12/11/2008-5810 numbered /Article 4) in this way : Free zones while being parts of the Turkish customs area; goods which are not in free movement without being subjected to any customs regime and without being put into free movement, not to be used outside the frame of the customs regulation or which is put with the condition of not to be consumed, in the execution of the rules on import tax and commercial politics precautions and exchange legislation is excepted as outside the Turkish Customs area and also a object which is in free movement after being put into a free zone understandably benefits from the resources which comes from to the export of the goods.
In the 3218 numbered Free Zone Act altered by the 25/11/2008 dated and 5810 numbered Act article 1, it is expressed that the reason of the establishment of the free zones, is to encourage the investment and production which is in the direction of export, to directly hasten foreign investments and the input of technology, to direct businesses in the direction of export and to improve international trade.
In this frame, in order to do business in the free zones while evaluating of the necessary applications for a business licence(including renewal and expansion applications). By the General Manager of Free Zones keeping in mind the regional and sectional differences the following points are taken into account. 1. The activities should have a productive character and mostly be in the direction to sell abroad. 2. Also in purchase and sale activities the principle is to sell abroad. But with priority it may be permitted in certain proportions to sell raw materials, intermediate goods and investment goods in Turkey. 3. The activities applied for a) Should not be harmful for human health and the environment. b) Should not include the delicate materials determined by the Head office. c) In the domestic market should not be destructive and should not have a character which creates an unfair competition environment. 4. The activity; a) Should have the nature of creating employment at a certain capacity. b) Must have a direct foreign investment characteristic. c) Must include new or/and high technology. d) The service must have the nature of supporting international trade. e) Must be compatible with the specialization of sector and aggregation in the free zone. Theses are kept in mind in the assessment period.
Along with providing contribution to the Turkish economy, with their flexible and modern administrative structure the Free zones create the necessary investment enviroment to companies who want to head towards foreign trade also as logistic bases their importance in our country is increasing.
The free zone managements found in Turkey: Adana-Yumurtal�k free zone(Ceyhan/Adana), Antalya Free Zone Management (Antalya), Europe Free Zone Management (Corlu/Tekirdag), Bursa Free Zone Management (Gemlik/Bursa), Denizl Free Zone Management(Cardak/Denizli), Eastern Anatolian Free Zone Management(Erzurum), Ege Free Zone Management(Gaziemir/�zmir), Gaziantep Free Zone Management (Cakmak/Gaziantep), Istanbul Ataturk Airline Free Zone Management(Havaliman�/Istanbul), Istanbul Leather and Industry Free Zone Management(Tuzla/Istanbul), Istanbul Trakya Free Zone Management(Catalca/Istanbul), Izmir Menemen Leather Free Zone Management(Menemen/Izm�r), Kayseri Free Zone Management(Kayseri) Kocaeli Free Zone Management(Izmit/Kocaeli), Mardin Free Zone Management (Istasyon/Mardin), Mersin Free Zone Management(Mersin), Rize Free Zone Management (Rize), Samsun Free Zone Management (Limanici/Samsun), Trabzon Free Zone Management (Limanici/Trabzon), Tubitak Mam Teknoloji Free Zone Management (Gebze/Kocaeli).
- The activity areas of the companies established in the free zones may be, Production, Storage management, Banking, Renting a workplace, Assembling- Dissembling, Maintenance-Repairs, Insurance trade, Trading(purchase-sale), Offshore Banking and Leasing.
Although the production of goods in the free zone is unrestrained, some goods are forbidden and some need a special permit.
The goods which are illegal to be brought into the free zone or goods which need special precautions are arranged like this; Inflammable, explosive, ignitable, combustive goods or materials which are dangerous to the goods when they are in the same place, with the condition that special precautions are made may be brought into the zones. The entering and exiting of Narcotic substances (drugs), psychotropic substances and chemical substances which are involved with these and also their pharmaceutical preparations are subjected to the regulations that the Minister of Health applies.
From the point of companies which will show activity in the free zones there is no restriction for foreign or domestic capital. A %100 domestic capital company or a 100% foreign capital company may be active in the free zones. Also from the point of exemptions and encouragements a distinction between domestic and foreign capital companies is not made.
With the purpose of being able to be active in the free zones the procedures needed to be followed in order to get the necessary licence are as follows:
1. An application for an activity licence is made. The activity licence application may be done to the Foreign Trade Undersecretary ( Inonu Bulvar�, 06510 Emek / ANKARA � T�RK�YE) or also may be done to the Free zone Management Office.
The duration of the activity licence, for rent users who do business by renting a workplace it is 10 years, for investment users who do business by building their own workplace it is 20 years. But, this duration; for the rent users who do business regarding production it is 15 years, and for Investment users it is 30 years but in order for this to be valid the mentioned production must be continuous.
2. A 5000USD application fee is paid (in case the application is refused the fee is returned)
3. An application form is filled (here the activity area of the company should be notified in detail.)
4. The application is evaluated by the Head Office. If is denied then the application fee is given back. If it is accepted:
5. A rent or sale contract is made( user investors-people who build on the property- that are active in the free zone may be rented land, estate and buildings which is the Treasury�s personal property or may gain the right to constitute a servitude on these for up to 49 years).
6. The head office is applied to with the rent contract.
7. An activity licence is drawn up.
8. A certificate is given concerning that the activity licence is suitable for a company to be established. And with these and the other necessary certificates an application is made to the trade register for the establishment of the company.
9. In order to get a work permit for a foreign manager or qualified personel an application is made to the regional or the Head Office. From the employees perspective The TR social security legislation rules are enforced and insurance premium is paid to the social security establishments.
Source: T.C. Undersecretariat of Foreign Trade of the Prime Ministery
Free Zones General Management