Doing Business in Türkiye Without Incorporating

Legislation and official sources last checked: 2 September 2026.

A foreign company does not always need to incorporate a Turkish subsidiary. Cross-border sales, an independent distributor or commercial agent, a registered branch and a non-trading liaison office are distinct routes. The correct model depends on who contracts with customers, who controls price and personnel, whether stock or a fixed place exists in Türkiye, and whether the activity is regulated.¹

This guide compares when a foreign business may use cross-border sales and when a local operating model becomes more defensible. Tax, customs, consumer and sector licensing consequences should be integrated into, but not conflated with, the legal-structure decision.

Related practice: Corporate, Commercial & Contracts.

Core conclusion: Market-entry structure is not a cheapest-incorporation exercise; it is an allocation of control, liability, tax presence, customer contracting and exit capability.

Who is this guide for?

This guide is for foreign manufacturers, technology companies, regional legal teams, CFOs and market-entry managers testing or expanding into Türkiye. Tax, customs, consumer and sector licensing consequences should be integrated into, but not conflated with, the legal-structure decision.

Decision summary in one minute

1. When can the company sell cross-border without a local entity?

A foreign company may sell goods or services into Türkiye from abroad, but signing the contract offshore does not by itself eliminate Turkish legal or tax exposure. The analysis turns on who negotiates and finalises essential terms, whether local stock, premises or personnel exist, and whether a person in Türkiye habitually binds the foreign enterprise.²

In B2B contracts, governing-law and arbitration choices generally operate within a wider field, subject to overriding mandatory rules. Consumer-facing sales require a separate analysis under Article 26 of PILA, Law No. 6502, the distance-contract rules and e-commerce legislation. Pre-contractual information, withdrawal and returns, personal data and commercial electronic messages are separate compliance workstreams; any Turkish-language requirement must be confirmed against the transaction and the applicable language rules.³

• Local stock or warehousing
• A person exercising contract authority in Türkiye
• Regular and continuous activity
• Targeting Turkish consumers
• A regulated sector

2. The legal difference between a distributor and an agent

A distributor normally purchases and resells in its own name and for its own account, bearing inventory and customer-credit risk. A commercial agent continuously negotiates—and, if authorised, concludes—transactions on behalf of the foreign principal within a defined territory.⁴⁵⁶

The contract label is not conclusive. If the foreign company controls customer pricing, essential terms and order acceptance while the local party functions as a dependent sales arm, agency, competition and permanent-establishment issues may arise.⁷

3. Branch: an extension, not a separate subsidiary

A branch is registered with the trade registry and requires a local representative and separate accounting and tax records, but it has no legal personality distinct from the foreign head office. Branch liabilities therefore remain liabilities of the foreign company.⁸

A branch is operationally suitable for regular contracting and employment. A Turkish subsidiary may be structurally cleaner where the business expects new investors, clearer separation of liabilities or a later sale of the local operation.

4. Liaison office: licensed but non-commercial

A foreign company may establish a liaison office with Ministry authorisation, provided that it does not conduct commercial activity in Türkiye. Permitted functions can include market research, representation, supplier supervision, technical coordination and regional-management activities within the licence.

The initial licence may be granted for a maximum of three years for the activities stated in the application. A liaison office may not issue sales invoices, enter into customer contracts or carry on revenue-generating commercial activity. Email practices, incentive structures, job titles and authority matrices should remain aligned with the licensed activity.⁹

5. When is a Turkish subsidiary the better model?

A separate Turkish subsidiary generally becomes more predictable as local staffing, customer contracting, investment, inventory, licensing or product-liability exposure grows. Subject to sector-specific restrictions, foreign investors may use the same corporate forms as domestic investors.¹⁰

Companies registered on or after 1 January 2026 must keep the relevant non-accounting commercial ledgers in ETDS according to their company type. For a joint stock company, the share ledger, board-resolution ledger and general-assembly meeting and negotiation ledger are mandatory; for a limited liability company, the share ledger and general-assembly ledger are mandatory, while a separate managers’ board resolution ledger is optional.¹¹

6. Do not separate legal form from permanent-establishment analysis

Türkiye’s domestic-law place-of-business and permanent-representative rules must be analysed separately from the permanent-establishment and dependent-agent tests under the applicable double-tax treaty. The effect of a fixed place, contracting authority, service duration and employee functions depends on the text of that treaty.¹²

Labels such as “invoiced outside Türkiye” or “independent consultant” do not override substance. Legal, tax, transfer-pricing and payroll workstreams should be based on one consistent fact pattern.

7. Decision tree: define the activity before choosing the vehicle

The first question is not “which company type?” but which functions will be performed in Türkiye. Customer contracting, stock, personnel control, after-sales service, data processing, licensing and collections should be mapped before the vehicle is selected.

The model should include growth triggers. Revenue, headcount, contract volume or inventory thresholds can be used to determine when a distributor or cross-border model should migrate to a branch or subsidiary.

Documents and evidence the company should prepare

• Foreign-company constitutional and authority documents
• Türkiye activity and function map
• Customer and supplier contracting flow
• Local employee/consultant mandate matrix
• Inventory, warehousing and logistics arrangement
• Sector and licensing checklist
• Tax and transfer-pricing assumptions
• Personal-data and technology flows

Contract and governance controls

• Distributor/agent status and independence
• Order acceptance, pricing and customer contracts
• Brand, marketing and online sales
• Territory, exclusivity and competition
• Personnel and sub-agent use
• Data, confidentiality and cybersecurity
• Termination, inventory and customer transition
• Governing law, dispute resolution and notices

Red flags and recurring mistakes

• A liaison office operating against sales targets or commission
• A distributor signing customer contracts for the foreign company
• A local person habitually binding price and essential terms
• Local stock or personnel omitted from the legal and tax analysis
• A regulated activity described merely as software
• Failure to revisit the structure after scale changes

Three practical scenarios

1. German manufacturer testing the market through a distributor

The manufacturer sells to a Turkish distributor, which resells locally in its own name. The agreement should distinguish genuine recommended or maximum resale prices from prohibited fixed or minimum resale price maintenance; pressure or incentives must not convert a recommendation or cap into a fixed or minimum price. Brand and online-sales rules should be explicit, and foreign-company personnel should not habitually accept local orders.

2. US SaaS company hires a sales employee in Türkiye

If the local employee is described as promotional staff but routinely finalises price and contract terms, employment, payroll, privacy and dependent-agent risks converge. An employer-of-record (EOR) provider or Turkish subsidiary cannot be selected on payroll cost alone.¹³

3. UK group establishes a liaison office for regional sourcing coordination

The licence is confined to supplier supervision and quality coordination. The office does not sell to customers, personnel incentives are not linked to revenue, and the annual activity file is checked against the authorised scope.

A 30–60–90-day implementation plan

Days 1–30 — map the factual footprint

• Map customer contracting, pricing, order acceptance, inventory, personnel, collections and data processing in Türkiye.
• Test the existing activity against the cross-border sale, distributor, agent, branch, liaison-office and subsidiary models.
• Assign separate owners for treaty tax, work-permit, product and sector-licensing questions.

Days 31–60 — align authority and evidence

• Review distributor or agency terms for order acceptance, resale pricing, online sales and goodwill-indemnity exposure.
• Depending on the selected model, complete MERSİS, Ministry licence, work-permit and ETDS preparations.¹⁴
• Bring the signature matrix and the tax, customs, consumer, privacy and payroll assumptions into one decision memorandum.

Days 61–90 — test an end-to-end transaction

• Trace a sample customer order through quotation, signature, invoice, delivery, collection and data flow.
• Obtain management approval for migration triggers tied to revenue, headcount, inventory, contracting authority or licensing.
• Set quarterly controls and event-driven reviews for investment, acquisition, new products or new sales channels.

Frequently asked questions

Can a foreign company invoice Turkish customers without incorporating?

Cross-border invoicing is possible, but tax presence, customs, consumer, payment and permanent-establishment consequences depend on the operating model.

What is the main difference between a branch and a subsidiary?

A branch has no legal personality separate from the foreign company. A subsidiary is a separate Turkish legal entity.

May a liaison office make sales in Türkiye?

No. It is limited to licensed non-commercial functions and may not conduct commercial activity in Türkiye.

Does using a distributor remove all liability for the foreign supplier?

No. Product, consumer, competition, brand, privacy and de facto representation risks may remain.

Are an agent and a distributor the same?

No. A distributor buys and resells in its own name; an agent continuously acts as intermediary for the foreign principal.

Does hiring one person in Türkiye require a subsidiary?

Not automatically, but work permit, payroll, employment, permanent-establishment and contracting-authority issues must be analysed together.

Can a foreign investor own 100 per cent of a Turkish company?

The general foreign-investment framework allows equal treatment, subject to sector-specific restrictions and approvals.

Which structure has the lowest risk?

There is no universally lowest-risk model. The answer depends on functions, control, personnel, inventory, licensing, tax and exit objectives.

Conclusion

Türkiye market entry should not be reduced to a binary incorporate-or-not question. A defensible model makes local functions visible, controls authority, aligns contract and tax assumptions, and defines scale-up triggers. The decision should be recorded in a structured market-entry memorandum.

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Legal information notice

This article provides general information only. It is not a legal opinion for a particular company, transaction, tax position, licence application or dispute. Applicable sector, tax, employment and regulatory rules require a fact-specific review.

Bibliography

• Invest in Türkiye — Establishing a Business — Investment Office guide
• Law No. 5718 on Private International Law and International Civil Procedure (PILA) — 5718 sayılı Kanun
• Consumer, distance-contract, e-commerce and data-protection legislation — 6502 sayılı Kanun; Mesafeli Sözleşmeler Yönetmeliği; 6563 sayılı Kanun; 6698 sayılı Kanun
• Turkish Commercial Code No. 6102 — Türk Ticaret Kanunu
• Turkish Code of Obligations No. 6098 — Türk Borçlar Kanunu
• Goodwill Indemnity in Exclusive Distribution Agreements — DOI
• Turkish Competition Authority — Guidelines on Vertical Agreements — Kılavuz
• Foreign Companies and Branches under Turkish Commercial Law — DOI
• Invest in Türkiye — Liaison Offices — Investment Office guide
• Foreign Direct Investment Law No. 4875 — 4875 sayılı Kanun
• Ministry of Trade — Electronic Commercial Ledger System (ETDS) — 100 Soruda ETDS
• Tax place-of-business and permanent-representative source set — 5520 sayılı Kurumlar Vergisi Kanunu; 213 sayılı Vergi Usul Kanunu; GİB 2026 Kurumlar Vergisi Rehberi
• International Workforce Law No. 6735 — 6735 sayılı Kanun
• Ministry of Trade — Central Registry Record System (MERSİS) — MERSİS

Footnotes

1. Invest in Türkiye — Establishing a Business — Investment Office guide. Accessed 2 September 2026. Compares companies, branches and liaison offices in Türkiye, including the prohibition on commercial activity by liaison offices. ↩︎

2. Law No. 5718 on Private International Law and International Civil Procedure (PILA) — 5718 sayılı Kanun. Accessed 2 September 2026. Articles 24 and 26 address governing law for contracts and consumer contracts respectively. ↩︎

3. Consumer, distance-contract, e-commerce and data-protection legislation — 6502 sayılı Kanun; Mesafeli Sözleşmeler Yönetmeliği; 6563 sayılı Kanun; 6698 sayılı Kanun. Accessed 2 September 2026. Requires separate analysis of pre-contract information, withdrawal, electronic marketing and personal data in consumer-facing sales. ↩︎

4. Turkish Commercial Code No. 6102 — Türk Ticaret Kanunu. Accessed 2 September 2026. Articles 40(4), 102 and 122 address branches, commercial agents and goodwill indemnity. ↩︎

5. Turkish Code of Obligations No. 6098 — Türk Borçlar Kanunu. Accessed 2 September 2026. Provides the general framework for contracts, representation, services, liability and termination. ↩︎

6. Goodwill Indemnity in Exclusive Distribution Agreements — DOI. Accessed 2 September 2026. A recent doctrinal comparison of goodwill indemnity in agency and exclusive-distribution relationships. ↩︎

7. Turkish Competition Authority — Guidelines on Vertical Agreements — Kılavuz. Accessed 2 September 2026. Explains the distinction between recommended or maximum prices and fixed or minimum resale price maintenance. ↩︎

8. Foreign Companies and Branches under Turkish Commercial Law — DOI. Accessed 2 September 2026. A doctrinal analysis of branches and other Turkish establishment models for foreign companies. ↩︎

9. Invest in Türkiye — Liaison Offices — Investment Office guide. Accessed 2 September 2026. States that a liaison office may not conduct commercial activity and that the initial licence is limited to a maximum of three years for declared activities. ↩︎

10. Foreign Direct Investment Law No. 4875 — 4875 sayılı Kanun. Accessed 2 September 2026. Article 3 establishes equal treatment for foreign investors, subject to sector-specific rules. ↩︎

11. Ministry of Trade — Electronic Commercial Ledger System (ETDS) — 100 Soruda ETDS. Accessed 2 September 2026. Explains which non-accounting commercial ledgers must be kept in ETDS for companies registered on or after 1 January 2026. ↩︎

12. Tax place-of-business and permanent-representative source set — 5520 sayılı Kurumlar Vergisi Kanunu; 213 sayılı Vergi Usul Kanunu; GİB 2026 Kurumlar Vergisi Rehberi. Accessed 2 September 2026. Supports separate analysis of domestic-law place-of-business and permanent-representative rules and treaty permanent-establishment and dependent-agent tests. ↩︎

13. International Workforce Law No. 6735 — 6735 sayılı Kanun. Accessed 2 September 2026. Governs the work-permit and exemption framework for foreign nationals working in Türkiye. ↩︎

14. Ministry of Trade — Central Registry Record System (MERSİS) — MERSİS. Accessed 2 September 2026. Explains the electronic handling of trade-registry transactions through MERSİS. ↩︎