Nowadays, it is very important to adapt to competition in the global order. This adaptation process has been greatly expanded by exceeding certain limits in today’s order. In addition to its activities in its own countries, companies are expanding their corporate networks by having a presence in foreign countries. There is no doubt that it is imperative to keep up with the changing and developing world order in order for real and legal persons to remain active.
In this changing and developing order Turkey; It is one of the countries highly preferred by foreign investors due to its expanding economy, workforce, geopolitical position, etc. With the “Foreign Direct Investments Law”, the number of foreign investments in the country has increased rapidly. With this arrangement, the Turkish market has become very attractive to foreign investors. After these exemptions, it has become easier for foreign companies to establish branches in our country. After this convenience, the concept of branches has become very popular for pitcher investors. In this article, information will be given about the procedures required for foreign companies to establish branches and the documents required for this.
First of all, it will be important for the general characteristics of commercial enterprises and the general elements of the branches connected to the commercial enterprise to be mentioned in terms of editorial integrity. Commercial enterprise is regulated in Article 11 of our Turkish Commercial Code. In article 11 of the TTK; “The business in which the activities aimed at generating income exceeding the prescribed limit for the trades business are carried out continuously and independently.” In this respect, it is seen that there are three elements that are important. These are the ones that are going to income that exceeds the trades business, i.e. profit target, continuity and independence. Every commercial enterprise needs to have a headquarters. The center of the commercial enterprise refers to the place where the administrative, legal and commercial activities of the enterprise are collected and carried out. Companies operating in Turkey eliminate the disadvantages of institutionalization by branching method. Although the concept of branches has a certain structure that facilitates management; their autonomy is limited. Branches are autonomous in foreign relations while connected to the center in internal relations.The branch also has a separate accounting and commercial books from the center as a result of its authority to conduct commercial transactions on its own.
2- BRANCH BUILDING OF FOREIGN COMPANIES IN TURKEY
There are some qualifications and procedures that must be followed in order for foreign companies to start the branch restructuring process in Turkey. One of these requirements is that the capital of the foreign company is divided into shares. Another of the obligations is the commercial representative. Foreign companies must appoint a commercial representative based in Turkey for their branches opened in Turkey.
- Permits to be obtained if foreign companies open branches in Turkey;
In order for companies originating from abroad to open branches in Turkey, permissions must be obtained from a number of authorities. The Ministry of Commerce of the Republic of Turkey is one of the leading authorities. Foreign investors of foreign origin must obtain the necessary permissions from the T.C. Ministry of Commerce in order to establish a branch in Turkey. After this permission, it is necessary to register in the chamber of commerce and trade register of the region to be established. As a result of these permissions and registrations, branch installation procedures have been completed in Turkey.
It is also possible for foreign companies to establish more than one branch in Turkey; this situation has found its presence in Article 40 of the Turkish Commercial Code. In the event that there are more than one branch of foreign-owned companies in accordance with this article of law; The registration provisions of domestic commercial enterprises are applied in the registration of the branches opened after the registration of the first branch. The registration of branches related to domestic commercial enterprise is made to the trade register by referring to the registration record of the commercial business center.
- Required Documents in case foreign companies open branches in Turkey;
The documents required for foreign companies to open branches in Turkey are as follows:
- Application Petition,
- Declaration of The Establishment,
- If the representative is a foreign national, the passport and residence certificate of the representative,
- Certified sample of the company contract and Turkish translation with the document containing the current records of the company headquarters,
- Turkish translation of the letter and notarized from the competent authority showing that the conditions sought for the company that will open a branch according to the law of the country where the company’s headquarters is located have been fulfilled and the documents that must be submitted for the registration of the branch,
- The decision to open a branch in Turkey, taken by the competent body of the company’s headquarters,
- Original and translation of the power of attorney to be issued for the person who will represent the Turkish branch of the company,
- The title, type, subject matter, type and amount of the capital, date of establishment, registration number, legal order to which it is subject, whether it is a member of the EU, website, title of the branch, capital allocated to the branch, persons or persons who will represent the branch as fully authorized and their addresses are the original and translation of the declaration signed by the officials of the center containing the address of the branch.
Although the scope and nature of the documents requested by the registry directorates are essentially the same, different documents may be requested by some registry directorates. For this reason, it is strongly recommended that the lists of documents announced by each registrar’s office regarding the opening of branches of foreign companies in Turkey be followed up-to-date and that the documents be prepared in the form and number requested by the relevant trade registry directorate to be applied.
Another thing to note is that the documents to be issued abroad, such as the decision of the foreign company to open a branch in Turkey and the declaration of the branch organization to be signed by the authorized representatives of the foreign company, are approved by notaries in the country to which the foreign company is subject and approved by apostille. After these requirements, the documents mentioned will become official and valid in Turkey.
In addition to the many results of opening branches in Turkey, the issue of taxation is also important. In order to exempt foreign investors in Turkey from heavy taxes, a number of agreements have been made. With these agreements, it is aimed to overcome the problem of double taxation; tax exemptions have been raised according to the scope and type of business activities. Tax exemptions have also been one of the applications that make the Turkish market attractive.
It has become a common situation for foreign companies to organize branches in Turkey. The above explanations regarding the opening of branches of foreign companies in Turkey should be noted with great importance that they are of a general nature. These processes, which are followed by foreign investors who want to open branches in Turkey, may vary in terms of their legal dimensions. In this process, it is important to professionalize the business in order to avoid legal problems. Therefore, professional follow-up of the business by obtaining legal assistance will prevent the parties from losing rights and save investors time.