Branches of Foreign Companies in Turkey Opening Process

According to the Turkish Commercial Code, it is mandatory that each establishment has a center. The headquarters of the business enterprise refers to the place where the business’s administrative, legal and commercial activities are collected and carried out. This location may be different from where the technical activities of the entity are carried out.

As the scope of their activities increases, commercial enterprises operating in Turkey and abroad prefer to manage their business through the semi-independent units they will establish, ie branches, instead of managing them centrally. Branches are as follows;

• Branch and headquarters must belong to the same real or legal person.

• Field of activity similarity: The field of activity of the branch and headquarters should be similar or the same.

• Headquarters and branches should be in separate places. As a rule, the branch should operate in a separate place from the center. However, the distance limit does not matter. For example, while the upper floor of a building is the headquarters of the company, the lower floor can also function as a branch.

• The branch has to use the trade name of the center by adding a branch attachment.

• Branches must be registered and announced in the trade registry of their location.

• Branches must register to the chamber of commerce and industry of their location separately from the center and pay dues.

• Branches are connected to the center. The profit, loss, rights and debts provided by the Branch are deemed to belong to the center. The branch does not have any assets apart from the center, only a certain asset is allocated to the branch by the center. Therefore, branches cannot be considered as an independent commercial enterprise.

In accordance with the loyalty relationship, the branches may operate only in matters that fall within the field of activity of the center based on the authority they have received from the center.

Branches are also attached to the center in terms of operational policy. The business policy is the personnel, price, management, etc. that an enterprise follows during the activity. refers to policies. In accordance with the loyalty relationship, the branches must comply with this operating policy determined by the center.

The organization of the branches is subject to the center. For example, the recruitment or promotion of the branch personnel is done from the center. However, if the branch has been authorized by the center in this regard, it will be able to use this authority.

• Separation of management: Since it is authorized to conduct branch transactions alone, it must have a separate accounting from the headquarters. Therefore, it is necessary to keep the commercial books separate from the center. However, it is considered possible that the records related to the branch can be passed by the center provided that a separate book is kept.

• Branches are independent in external relations: The Branch is authorized to carry out all transactions that the head office is authorized to perform with third parties. The independence of the branch in external relations is limited by the authority given to it by the center. If the branch exceeds the authority limit given by the center, the center shall be responsible to third parties against the transactions performed by the branch.

In the light of these features, it is seen that the branch has absolute independence in the external relationship, whereas in the internal relationship it is seen that there is a complete commitment to the center.

a duly authorized attorney in the first place of residence in Turkey to open a branch in Turkey foreign companies are required to appoint. After this proxy is appointed, all necessary documents and the Ministry of Industry and Trade, General Directorate of Internal Trade should be applied.

documents to be submitted to the Ministry of Industry and Trade of the foreign companies to open branches in Turkey include:

1. Petition written by the company or its representative. This petition; company name, company history, company nationality, capital of the company, the name of a duly authorized proxy surname in Turkey, attorney’s commitment to comply with the laws and legislation in the transactions to be made within the borders of Turkey, branch address, branch of activity and branch capital information is required the presence of.

2. Original and translation of the decision to open branches of the authorized bodies of the company (establishment notification form)

3. Original and translation of the Articles of Association

4. Establishment documents showing where, when and under which state laws the company was established and the activity certificate of the company that is still operating. These documents are required to be translated as well as the originals.

5. Translation of the original power of attorney and proxy of Turkey. This power of attorney should include the following issues in addition to the issues needed;

– Performing the transactions indicated in the 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 on behalf of the Company,

To appoint an attorney instead of the powers which it has in the case of temporary separation for in Turkey

OlmaTo be authorized to assign proxy to the secondary branches to be established under the central branch.

Translations of documents required to be translated in the list shall be certified in one of the following ways;

– By the Turkish consulate in the country to which the Company is subject,

– Turkey by the Ministry of Foreign Affairs

– According to the provisions of the “Convention on the Elimination of the Obligation of Approval of Foreign Official Documents çevresinde prepared around the Hague Conference on Private Law.

After obtaining the permission to open a branch from the Ministry of Industry and Trade, it is necessary to apply to the Trade Registry Office with the following documents and to register the branch:

1. Permission of the Ministry of Industry and Trade,

2. The petition signed by the company official,

3. Notarized power of attorney,

4. Auction declaration and announcement approved by the Ministry of Industry and Trade,

5. Trade room registration form,

6. Signature circular of the branch representative,

7. Commitment in accordance with Article 29 of the Company’s registration regulation,

8. If the representative of the branch is Turkish, a notarized identification card and if a foreigner, a notarized passport copy.

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