LIAISON OFFICE REGULATIONS IN TURKEY

With the recent changing in global economy relations, most of countries started to regulate foreign invesment issues in their legal system. In order to encourage foreign invesment, law makers has reformed or established the legislations to make foreign invesment easy for foreign companies.

One of the important regulation is about setting up representative (Liaison) offices in host country for foreign companies. Due to importance of the liaison offices, Turkey have made setting up the liaison offices easy by recent foreign invesment laws and regulations.

Although, liaison offices are not allowed to engage in commercial activities and dealings in Turkey, they are stil very attractive option for companies in many ways. In line with this idea, foreign companies could gain regional expertise, develop locate networks and promote their goods to the local markets. Moreover, they benefit from tax exemptions which is released to the foreign companies by Turkish legislations.

However, it is important to emphasis that liaison offices are strictly forbidden to generate income in Turkey. As we stated before, liaison offices exempt from corporate tax. In this manner, liaison office of employees receive their salary in foreign currency account which is sent from abroad. Thus, liaison office employees are free to income tax.

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