A Turkish branch of a foreign company is closed on a resolution of the parent: the branch's tax and social security files are closed, the closure is registered with the trade registry and announced, and the branch's remaining funds are transferred to the parent. There is no separate liquidation because the branch has no legal personality of its own. A liaison office is closed by obtaining the tax office's cessation record and notifying the Ministry of Industry and Technology within one month; after closure the office may transfer abroad only its closing balance.
Foreign companies enter Türkiye in one of three forms, and they leave in three different ways. A subsidiary, meaning a Turkish joint stock or limited liability company owned by the foreign parent, is a legal person in its own right and is wound up through the liquidation procedure of the Turkish Commercial Code, Law No. 6102, with its creditor notices, its waiting period, and its closing balance sheet; that procedure is the subject of our liquidation service. A branch and a liaison office are not companies. Neither has legal personality separate from the foreign parent, and neither is liquidated; each is closed by the parent and removed from the relevant registers through a shorter procedure that has its own sequence, its own authorities, and its own traps, most of which concern the tax office and the timing of notifications. We compared the two structures at the point of entry in branch vs liaison office; this guide covers the exit, step by step, together with the timing each procedure requires, the liabilities that survive closure, and the planning needed when a parent closes one structure in order to replace it with another.
Quick Answer: A branch, şube, is registered in the Trade Registry as a place of business of the foreign parent under Article 40 of the Commercial Code and is closed, not liquidated: the parent's competent organ resolves to close it, the branch winds up its contracts and employment relationships, files its final corporate tax return and obtains the tax office's cessation record, closes its Social Security Institution workplace file, and is then deleted from the Trade Registry and announced in the Trade Registry Gazette, after which its remaining funds are repatriated to the parent. A branch with clean books is typically closed in three to five months, most of which is the tax office's review of the open years. A liaison office, irtibat bürosu, operates under a permission from the Ministry of Industry and Technology under the Foreign Direct Investment Law, Law No. 4875, and its Implementing Regulation, is barred from commercial activity, and is closed by ceasing activity, terminating staff, obtaining the tax office's cessation inspection record, işi bırakma yoklama fişi, and notifying the General Directorate of Incentive Implementation and Foreign Investment within one month, after which only the closing balance may be transferred abroad. A liaison office is usually closed within two to three months. In both cases employees are entitled to notice and severance pay under the Labour Law, Law No. 4857, books must be retained for ten years, and the parent remains liable for obligations the branch or office incurred.
The form in which a foreign company entered Türkiye determines how it leaves, and the differences are not matters of degree but of kind. A subsidiary is a separate legal person: it owns its assets, owes its debts, and employs its staff in its own name, and its existence can only be ended by the liquidation procedure in Articles 529 to 548 of the Commercial Code, which protects creditors by requiring three announcements in the Trade Registry Gazette and a waiting period before assets may be distributed. A branch and a liaison office, by contrast, are extensions of the foreign parent. Their assets belong to the parent, their debts are the parent's debts, and their staff are, in law, the parent's employees working in Türkiye. There is accordingly nothing to liquidate: the parent simply ceases to operate in Türkiye through that structure and removes it from the registers in which it was recorded. That is why closing a branch or a liaison office is faster than liquidating a subsidiary, and also why the liabilities of a branch or office do not disappear at closure in the way that a properly liquidated subsidiary's do; they remain with the parent.
| Element | Subsidiary | Branch | Liaison Office |
|---|---|---|---|
| Legal personality | Separate Turkish company | None; part of the foreign parent | None; part of the foreign parent |
| Governing framework at exit | Liquidation under Articles 529 to 548 of Law No. 6102 | Closure and deletion under Article 40 of Law No. 6102 and the Trade Registry Regulation | Closure under Law No. 4875 and its Implementing Regulation |
| Creditor notices and waiting period | Yes, three Gazette announcements and the statutory waiting period | No | No |
| Corporate tax file | Yes, full liability | Yes, limited liability on Turkish source income | No income; withholding file for staff only |
| Principal closing authority | Trade Registry and tax office | Trade Registry and tax office | Ministry of Industry and Technology and tax office |
| Typical duration with clean records | Eight to twelve months | Three to five months | Two to three months |
| Who bears surviving liabilities | Legal representatives and, for a limited liability company, shareholders, for public debts | The foreign parent | The foreign parent |
A branch is registered in the Turkish Trade Registry under Article 40 of the Commercial Code as a place of business of the foreign parent. It has a registered representative resident in Türkiye with full authority, a tax number, statutory books, a bank account and, usually, employees, but no legal personality of its own. Because the parent is the legal person, the branch is not liquidated; it is closed by the parent and deleted from the registry, and the steps follow a fixed order.
The competent organ of the parent under its own law, typically the board of directors or the shareholders depending on the parent's constitution, resolves to close the Turkish branch and authorises a named representative to carry out the closure, including signing before the Trade Registry, the tax office, the Social Security Institution, and the banks. The resolution is notarised in the parent's country, apostilled under the Hague Convention of 5 October 1961 or legalised through the Turkish consulate where the country is not a party, and translated into Turkish by a sworn translator with the translation notarised, in the same way as the documents filed at registration. Where the parent's own existence or signature authority has changed since registration, a current register extract and signature evidence are also required.
Before the formal steps, the branch's commercial affairs are brought to an end. Customer and supplier contracts are terminated or assigned to the parent or to a successor entity, receivables are collected and payables settled, the office lease is terminated in accordance with its notice provisions, and the bank account is reduced to the funds needed for the closing costs. Employees' contracts are terminated with the notice periods required by Article 17 of the Labour Law, Law No. 4857, or payment in lieu, and with severance pay under the former Article 14 of Law No. 1475 for employees with at least one year of service, since closure is a termination by the employer and not a resignation. Throughout this period the branch continues to file its monthly VAT and withholding tax returns and its monthly social security declarations, because the obligation to file ends only with the tax office's cessation record, not with the cessation of trading.
The branch notifies the tax office of its cessation of activity under Article 160 of the Tax Procedure Law, Law No. 213, within one month, and files its final corporate tax return for the short period from the beginning of the financial year to the closure date within the period prescribed for cessation, together with the final VAT and withholding returns. The tax office then reviews the branch's open years, which in practice means the five years within the assessment period under Article 114 of the Tax Procedure Law, and issues a cessation inspection record. A branch is subject to corporate tax on a limited liability basis on its Turkish source income under Article 3 of the Corporate Tax Law, Law No. 5520, and the two matters the tax office examines most closely before closing the file are transfer pricing between the branch and the parent under Article 13 of that law, including management fees, cost allocations, and interest on intra-group balances, and the withholding tax on profits remitted to the parent. Any assessment arising from the review must be settled, or challenged before the tax court, before the registry deletion can proceed, because the Trade Registry requires evidence that the tax file is closed.
After the last employee has been deregistered through the Social Security Institution's e-declaration system, with the exit declarations filed within the statutory ten days, the branch files its final monthly premium and service declaration and applies for the closure of its workplace file. The Institution confirms that no premium, penalty, or unemployment insurance contribution is outstanding and closes the file. Where the branch had no employees, a declaration to that effect is filed instead.
With the parent's resolution, the tax office's cessation record, and the Social Security Institution's closure confirmation, the closure is registered with the Trade Registry directorate of the branch's seat through MERSİS and announced in the Trade Registry Gazette. From the date of registration the branch no longer exists as a registered place of business and its representative's authority ends. The branch's remaining funds are then transferred to the parent through the bank as repatriated capital and, to the extent they represent accumulated profit, as a profit remittance subject to the withholding tax under Article 30 of the Corporate Tax Law at the rate applicable, reduced where a double tax treaty provides. The bank will require the registry deletion and the tax clearance before executing the transfer.
Under Article 82 of the Commercial Code and Article 253 of the Tax Procedure Law, the branch's books, records, and supporting documents must be retained for ten years from the end of the year to which they relate and produced to the authorities on request. Because the branch's representative will no longer be registered after deletion, the parent should designate in the closing resolution who holds the records and where, and should ensure that the person remains reachable at a Turkish address for the retention period, since a tax inspection of a closed branch is served on the parent through its last known representative.
A liaison office operates under a permission granted by the Ministry of Industry and Technology under Article 3 of the Foreign Direct Investment Law, Law No. 4875, and Articles 6 to 9 of its Implementing Regulation, for an initial period of up to three years that may be extended. It is barred from commercial activity: it may conduct market research, represent the parent, coordinate, and provide technical support, but it may not invoice, take payment, or sign contracts generating income in Türkiye. It therefore has no income and no corporate tax file in the ordinary sense, but it does have a tax registration, a withholding file for the salaries of its staff, which are exempt from income tax under Article 23 of the Income Tax Law where paid in foreign currency from abroad, and, usually, a Social Security Institution workplace file. Its closure is governed by Article 8 of the Implementing Regulation and follows a sequence that satisfies both the Ministry and the tax office.
The office ceases its activities on a defined date, which becomes the closure date for all subsequent filings, and terminates the employment contracts of its staff. Although the staff's salaries may have been exempt from income tax, the employment relationship is an ordinary one under the Labour Law, and notice pay and severance pay are due in the ordinary way; the Social Security exit declarations are filed within ten days of termination.
The office notifies the tax office of its cessation under Article 160 of the Tax Procedure Law, files its final withholding and stamp tax returns, and requests a cessation inspection. The tax office conducts the inspection, confirms that the office has ceased activity at the registered address, and issues the cessation inspection record, işi bırakma yoklama fişi. This document is the key to the Ministry stage, because the Ministry will not process the closure without it.
Under Article 8 of the Implementing Regulation, the office must inform the General Directorate of Incentive Implementation and Foreign Investment of the closure within one month, attaching the tax office's cessation inspection record and the closing documents, which include the parent's resolution to close the office and the final activity report for the period since the last annual report. The Ministry records the closure and cancels the permission. Failure to notify within the month does not prevent closure, but it leaves the permission open on the Ministry's records, exposes the office to the annual reporting obligation it would otherwise have ceased, and complicates any later application by the same parent for a new permission or a branch.
After the closure date, the office may not transfer any funds abroad other than its closing balance. Liaison offices fund their expenses with foreign currency brought in from the parent, and the unspent portion of those funds is returned to the parent through the bank on presentation of the closing documents. Nothing else may be moved out under the office's name, and a transfer that cannot be reconciled with the funds brought in and the expenses documented raises precisely the question the tax office is most concerned with: whether the office earned income in Türkiye that it was not permitted to earn.
Two matters account for most of the difficulty in liaison office closures. First, the Ministry's file and the tax office's file are separate, and each expects the other's paperwork: the Ministry wants the cessation inspection record, and the tax office wants to know that the Ministry has been informed. The sequence set out above, tax office first and Ministry within the month, is the one that satisfies both without circularity. Second, an office that has quietly begun to trade, by invoicing customers, taking payments on the parent's behalf, negotiating and signing contracts, or providing services for a fee, has created a permanent establishment of the parent in Türkiye and a corporate tax exposure for the period concerned, and that exposure surfaces precisely at closure, when the tax office reviews what the office actually did against what its permission allowed. The consequences include the assessment of corporate tax and VAT on the income attributable to the office, penalties, and in serious cases the cancellation of the permission with effect for the parent's future applications. An office whose activities have drifted towards commerce should take advice before, not after, notifying the tax office of cessation.
Closure of a branch or liaison office is a termination of employment by the employer for a reason relating to the workplace, and the employees' rights follow the ordinary rules of the Labour Law. Each employee with at least one year of service is entitled to severance pay of 30 days' gross wages for each year of service, capped at the severance ceiling updated twice a year, and to notice pay for the notice period in Article 17 of the Labour Law or to work the notice period, together with accrued annual leave pay. Foreign employees holding work permits tied to the branch or office lose the basis of those permits when the workplace closes; the employer must notify the Ministry of Labour and Social Security of the termination within 15 days under Law No. 6735, and the employees' residence rights derived from the work permit end with it, so the closure should be planned around their onward arrangements. Where the parent is replacing the branch or office with another structure, as described in section 6, the employees may be transferred to the new entity with the continuity of their service recognised, which avoids the severance payment and preserves the foreign employees' permits through a change of employer application.
A branch with clean books is typically closed in three to five months from the parent's resolution, most of which is the tax office's review of the open years; a branch with transfer pricing issues, unfiled returns, or a dispute with the tax office takes correspondingly longer, and the deletion cannot proceed until the tax file is closed. A liaison office can be closed within two to three months of ceasing activity, provided the tax office inspection is requested promptly and the Ministry notification is made within the one month window. Both are considerably faster than the liquidation of a subsidiary, which is bound by the creditor waiting period following the third Gazette announcement and by the tax office's review of a full corporate tax file, and which rarely completes in less than eight months. In all three cases the apostille and translation of the parent's documents, which must be obtained abroad, should be started first, since they are on the critical path and are outside the control of anyone in Türkiye.
Parents sometimes close a branch in order to replace it with a subsidiary, usually because the business has grown to the point where limited liability and a Turkish counterparty are commercially necessary, or close a liaison office in order to replace it with a branch or a subsidiary because the office's activities have outgrown the restrictions of its permission. Neither is a conversion. Turkish law provides no procedure for transforming a branch into a company or a liaison office into a branch; the old structure is closed and the new one is formed, and the two procedures run in parallel so that the business is not interrupted.
The matters that must be handled across the overlap are the transfer of employees, who move to the new entity by agreement with their service continuity preserved and their work permits amended; the lease, which is assigned to the new entity or replaced with the landlord's consent; the customer and supplier contracts, which are assigned or novated; the bank accounts, which are opened for the new entity before the old ones are closed; and the tax and social security registrations, which are opened for the new entity before the old ones are ceased, so that there is no period in which the business operates without a registered Turkish presence. We plan this overlap so that nothing is left uncovered on either side, and so that the closure of the old entity does not trigger a severance liability or a permit cancellation that the formation of the new one could have avoided. For the new entity, see company establishment.
Because a branch and a liaison office have no legal personality, their closure does not extinguish any liability; it transfers nothing, because the liabilities were always the parent's. Tax assessments for the branch's open years may be raised against the parent after deletion and collected through the parent's remaining assets in Türkiye or, under the mutual assistance provisions of the applicable double tax treaty, abroad. The branch's registered representative, as the person who signed the returns, is a legal representative for the purposes of Article 10 of the Tax Procedure Law and Repeated Article 35 of Law No. 6183 and may be pursued personally for public receivables of his or her period that cannot be collected from the parent, which is a point the representative should consider before accepting the role and before signing the final returns. Employment claims by former staff, filed within the limitation periods of the Labour Law, are brought against the parent. The ten year retention obligation for books and records continues. A parent that intends to return to Türkiye in a different form should therefore close the old structure cleanly, since the tax and Ministry records of the closed branch or office will be the first thing the authorities consult when the new application arrives.
No. A branch has no legal personality, so it is closed by a resolution of the parent company and deleted from the Trade Registry after its tax and social security files are closed. There are no creditor notices and no waiting period.
A resolution of its competent organ to close the branch and authorise a representative, notarised, apostilled or legalised, and translated by a sworn translator, together with a current register extract and signature evidence where these have changed since registration.
The open years within the five year assessment period, with particular attention to transfer pricing with the parent, including management fees and intra-group interest, and to the withholding tax on profits remitted abroad.
No. Monthly VAT, withholding, and social security filings continue until the tax office issues the cessation record and the Social Security Institution closes the workplace file.
Through the bank after registry deletion and tax clearance, as repatriated capital and, for accumulated profit, as a profit remittance subject to withholding tax under Article 30 of the Corporate Tax Law, reduced where a treaty applies.
One month from ceasing activity. The notification goes to the General Directorate of Incentive Implementation and Foreign Investment with the tax office's cessation inspection record attached.
Only the closing balance, being the unspent portion of the funds brought in from the parent. After the closure date no other transfer abroad may be made in the office's name.
The office has created a permanent establishment of the parent, and the tax office assesses corporate tax and VAT on the income attributable to it, with penalties. The exposure surfaces at closure, and advice should be taken before the cessation is notified.
Yes. Closure is a termination by the employer, so notice pay and severance pay are due under the Labour Law in the ordinary way for employees with at least one year of service, and the final premium declaration must be filed with the Social Security Institution.
They lose their basis when the workplace closes. The employer notifies the Ministry of Labour within 15 days, and the employees' derived residence rights end, unless they are transferred to a successor entity through a change of employer application.
Typically three to five months for a branch with clean books, most of it spent on the tax office's review of the open years. A liaison office is usually closed within two to three months.
No. There is no conversion procedure. The branch is closed and the subsidiary is formed, with the two procedures run in parallel so that employees, the lease, and contracts move across without interruption.
Ten years from the end of the year to which they relate, under Article 82 of the Commercial Code and Article 253 of the Tax Procedure Law. The parent should designate who holds them at a reachable Turkish address.
Yes, within the assessment period, against the parent, which remains liable because the branch was never a separate person. The branch's registered representative may also be pursued personally for public receivables of his or her period.
Not if it complied with its permission, since it had no income. It files final withholding and stamp tax returns and obtains the cessation inspection record. Corporate tax arises only where the office in fact traded.
The parent's resolution and its apostille and translation, since they must be obtained abroad, are on the critical path, and nothing in Türkiye can be filed without them.
Closing a branch or a liaison office in Türkiye is faster and simpler than liquidating a subsidiary, because there is no legal person to wind up and no creditor procedure to observe, but the simplicity is procedural rather than substantive. The branch's tax file is reviewed in full before it can be deleted, with transfer pricing and profit remittances under particular scrutiny; the liaison office's closure turns on a one month notification to the Ministry and on whether the office stayed within its permission; and in both cases the employees are entitled to notice and severance, the records must be kept for ten years, and every liability remains with the parent and, for public receivables, potentially with the registered representative personally. A parent that follows the sequence described in this guide, tax office first, then the Social Security Institution, then the registry or the Ministry, with the parent's apostilled documents obtained at the outset, will close either structure within a few months and leave a clean record for any future return to Türkiye.
We close branches and liaison offices for foreign parents from the resolution to the final transfer of funds, handle the tax office review and any assessment that arises from it, manage the termination or transfer of employees and their work permits, and, where the parent is replacing one structure with another, plan the overlap so that the business is not interrupted. For a review of the exit from your Turkish branch or liaison office, or of the structure that should replace it, our legal team can examine the position and set out the steps required under the current law.
Liquidation, deregistration and the obligations that survive closure: guides for foreign shareholders.
