What European Companies Get Wrong About Expanding into Turkey

Jan de Vries · 2026-09-21

Turkey has always been a bridge. Not just geographically, but commercially. It connects Europe to Asia and the Middle East in a way few other markets can. For European companies looking to grow beyond their home turf, Turkey offers a large domestic economy, solid manufacturing capabilities, and trade routes that put you right in the middle of things. But here's the thing: expanding into Turkey isn't just about spotting an opportunity. You need to think about legal structure, taxes, accounting, hiring, banking, and ongoing compliance long before you open your doors. Get those right early, and the whole process feels a lot less like guesswork. ### Why European Companies Are Looking at Turkey Turkey's location makes it a natural fit for companies already operating across Europe, the Middle East, and nearby markets. But the reasons vary. Some businesses go there to: - Set up a local sales operation - Manufacture or produce goods - Handle imports and exports - Run e-commerce - Offer tech and software services - Establish a regional headquarters - Manage logistics and distribution - Provide professional services What you need depends entirely on your business model. A company that only sells to Turkish customers has different requirements than one hiring employees, leasing warehouses, or building a full subsidiary. That's why market-entry planning should start with one simple question: what do you actually want to do in Turkey? ### Setting Up a Legal Presence One of the first decisions is whether you need a Turkish legal entity. Depending on your model, you might consider a subsidiary, a branch, or in limited cases, a liaison office. A Turkish subsidiary gives you a separate legal structure to run local business through. The most common types are the Limited Liability Company and the Joint Stock Company. Which one fits depends on: - How many shareholders you have - How much you're investing - What you plan to do - How you'll finance it - Your future expansion plans - Your management structure - Your hiring plans If you're planning to set up a local entity, it's worth reviewing a proper guide to company registration in Turkey. That'll give you a clear picture of the process and what foreign investors need to prepare. ### Subsidiary or Branch? Don't Guess. You don't always need a Turkish subsidiary. A branch can work when the parent company wants to operate in Turkey as an extension of the foreign entity. A subsidiary, on the other hand, is its own Turkish legal entity. That often makes more sense for long-term commercial operations. The decision should be based on what you plan to do, not on which structure sounds simpler. Look at the legal, tax, accounting, and operational consequences of each option before you commit. ### Taxation: What You Need to Know Tax is a big deal when you enter a new jurisdiction. A Turkish company can face several taxes depending on its activities and transactions. These may include: - Corporate income tax - Value Added Tax (VAT) - Withholding tax - Payroll-related taxes - Social security contributions - Customs duties - Other transaction-specific taxes Your tax position depends on the nature of your business and the deals you make. European parent companies should also think about how Turkish domestic tax rules interact with international tax arrangements. That's especially true where double taxation treaties or transfer pricing rules come into play. ### The Bottom Line Expanding into Turkey can be a smart move. But it's not a plug-and-play market. The companies that succeed are the ones that plan ahead, ask the right questions, and get local advice early. If you're serious about Turkey, start with your business model, then work through the legal, tax, and operational details. That's how you turn a bridge into a real opportunity.