- Initial liaison office permit term
- 3 yearsInitial liaison office permit term
- Commercial activity permitted
- 0Commercial activity permitted
- Employee service continuity
- PreservedEmployee service continuity
Challenge
A liaison office established for market research starts receiving purchase orders. Continuing to operate as it stands would place the office outside the terms of its permit and expose the parent to a permanent establishment argument.
Our approach
A limited şirket is incorporated in parallel with the office's wind-down, employees are transferred with their service continuity preserved, and the office's permit is closed properly rather than allowed to lapse.
Result
Commercial activity conducted through an entity licensed to conduct it, with employee entitlements carried across intact and no gap in social security registration.
What a liaison office may and may not do
A liaison office (irtibat bürosu) is licensed by the Ministry of Industry and Technology to carry out non-commercial activity on behalf of a foreign parent: market research, representation, supplier liaison, quality control. It may not trade, invoice, or earn revenue in Türkiye. Its costs are funded entirely by transfers from abroad, and that funding is what makes its favourable payroll position possible.
Permits are granted for an initial term and extended on application, with the extension weighed against what the office has actually been doing. An office that has quietly begun taking orders is not merely at risk of non-renewal — it invites the argument that the parent has a permanent establishment in Türkiye and is taxable here on the profit attributed to it.
The trigger is commercial, not legal
Companies rarely decide to convert. They discover they already should have. The signals are consistent: a customer asks for a Turkish invoice, the office starts holding stock, staff begin negotiating price rather than relaying it, or a tender requires a locally registered supplier.
Each of those crosses the line. The useful question at that point is not whether to convert but how to do it without losing the things that are easy to lose in transition.
What has to be protected in the move
Employee continuity. Staff moving from the liaison office to the new company carry accrued entitlements — severance, notice, annual leave — that depend on unbroken service. Handled as a resignation and a new hire, that history is lost and the company acquires a dispute. Handled as a transfer, it carries across.
Social security registration. The new entity needs its own SGK workplace registration in place before anybody’s first day under it. A gap in registration is visible and penalised.
The expatriate’s permit. A work permit is tied to the employer. Where a foreign employee moves to the new company, a new application is required, and the new entity must satisfy the employment ratio in its own right.
The office’s closure. Liaison offices are closed formally, with the Ministry notified and final payroll and reporting obligations settled. An office simply abandoned leaves an open registration and an unfinished file.
Choosing the structure that follows
Most conversions land on a limited şirket for its simpler governance, but the choice is worth making deliberately. An anonim şirket carries a higher minimum capital and more formality, and is the right answer where the plan involves outside investment, share transfers, or an eventual sale — the share transfer mechanics and the tax treatment on exit differ materially between the two. Choosing on the basis of setup cost alone is the decision most often revisited later, and revisiting it is far more expensive than getting it right at formation.