Agent, Distributor, Liaison Office or Company: How an Indian Exporter Should Be Present in Türkiye

How does a commercial agent work under Turkish law?

The Turkish Commercial Code (TCC) defines the agent as a self-employed intermediary with continuous authority (Article 102), and Article 103 extends the rules to representatives of foreign companies without a Turkish branch [1]. Unless the parties agree otherwise in writing, the agent holds exclusive rights in its territory and earns commission on all sales there, even those it did not arrange [1]. A contract of indefinite term needs three months' written notice (Article 121) [4]. On termination the agent can claim goodwill compensation under Article 122 if you keep benefiting from customers it brought and it loses commission on them. The cap is the average annual commission of the last five years, the right cannot be waived in advance, and the claim expires after one year [2].

How is a distributor different?

A distributor buys and resells in its own name. The TCC has no dedicated distributor chapter, and notice periods are not set by statute [4]. Article 122(5) extends goodwill compensation to exclusive distribution, unless that would be inequitable [2][3]. A post-term non-compete is allowed only if separately agreed, for no more than two years [4]. Under competition law, a supplier may restrict active sales into another reseller's exclusive territory but not passive sales [5], and the block exemption applies only while the supplier's market share stays at or below 30% [6]. Law No. 805 requires foreign companies to use Turkish in dealings with Turkish companies, with the Turkish text prevailing, though whether it covers contracts is disputed [7].

What can a liaison office do?

A liaison office needs a licence from the Ministry of Industry and Technology and is prohibited from commercial activity [8][9]. It cannot invoice Turkish customers [10]. Permitted work includes representing the parent, inspecting and selecting suppliers, training distributors and passing on market information [9]. Applications are concluded in fifteen working days when documents are complete, and the first licence runs up to three years [8]. It suits a company that is still testing the market and has no Turkish revenue to book.

What does a Turkish company require?

Minimum capital is TRY 50,000 for an Ltd. Şti. (raised from TRY 10,000) [16] and TRY 250,000 for an A.Ş., set by Presidential Decree 7887 for companies established from 1 January 2024 [11]. Existing companies below these amounts must comply by 31 December 2026 [12]. A foreign company may own 100%, outside restricted sectors [8][10]. Steps run through MERSİS, notarised documents, a bank deposit and the Trade Registry, and the company then receives its tax registration [8]. Registration can finish in a few business days once documents are complete, and apostilles and translations usually set the pace [13]. The sources we read give a 25% corporate tax rate and 20% VAT (April 2025 data) [14].

Which model fits which stage?

This is our view, not a legal rule. For first shipments to a few buyers, a written distributor or agent contract is enough, with no Turkish entity. A liaison office helps when you want a named presence for supplier checks and market data but are not yet invoicing. When you hold stock, issue Turkish invoices or employ people in Türkiye, a company is the clean structure. One tax caution: an agent who habitually concludes contracts for you can create a permanent establishment, so keep signing and pricing with your Indian team [15].

Which mistakes cost exporters the most?

Signing an exclusive distribution agreement with no minimum purchase target, which leaves a partner holding the territory with no duty to sell. Relying on an English-only contract, which sits uneasily with the Turkish language rule [7]. Forgetting agency compensation: a waiver signed before the contract ends is invalid, and the claim arises within one year of termination [2]. Giving an agent authority to bind you, which carries tax risk [15]. Assuming a foreign governing-law clause removes the mandatory termination and compensation rules [3][4].

Key facts

• Commercial agent definition: TCC Article 102; goodwill compensation: Article 122 [1][2].
• Three months' notice applies to indefinite-term agency contracts (Article 121) [4].
• Goodwill compensation is capped at the average of five years' commission, and claims expire after one year [2].
• A liaison office may not engage in commercial activity; first licence up to three years [8][9].
• Minimum capital: Ltd. Şti. TRY 50,000; A.Ş. TRY 250,000 [11].
• Block exemption for vertical agreements applies up to a 30% market share [6].
• Corporate tax 25% and VAT 20% in the April 2025 guide [14].

Frequently asked questions

Can an Indian company own 100% of a Turkish company? Yes. Foreign investors have the same rights as local ones, outside sectors such as TV broadcasting, maritime and civil aviation [8][10].

Does a distributor get end-of-contract compensation? Possibly. Article 122(5) extends the agent's goodwill compensation to exclusive distributors, subject to equity [2][3].

Is an English-language contract valid? The point is disputed. A 2016 Supreme Court decision allowed recovery under an English contract, but a breach of the Turkish language rule creates no rights for the offending party and carries a judicial fine, so a bilingual contract with the Turkish text prevailing is the cautious choice [7].

What TurkIndia does here

We work from Istanbul and Ahmedabad. For Indian companies we find agents, distributors and buyers in Türkiye, check import regulations before shipment, arrange meetings and fairs, represent you on the ground, and guide you through company setup. We are not a law firm, so contracts and tax structure should be reviewed by a Turkish lawyer. We do not publish service prices here. For a quote, message us on WhatsApp at +90 530 991 37 21 or write to gamgamtuna@gmail.com.

Sources

This article is general information; rules and dates change. Sources are listed at the end.