Setting Up a Türkiye Subsidiary: Day-1 ERP & Compliance Checklist for Foreign HQs

If you've decided to incorporate a Turkish entity (an LLC — Limited Şirket — or JSC — Anonim Şirket), the temptation is to handle the first 6-12 months on spreadsheets, get traction, then "properly set up systems." This is almost always wrong. Türkiye's electronic-document mandate, statutory CPA requirement and KVKK obligations mean that your first invoice already triggers compliance touchpoints you cannot retroactively rebuild. This checklist covers what should be in place before your first invoice.

Note: Specific thresholds, forms and rates change — confirm each item with your CPA (SMMM) for your specific situation. This guide reflects general practice as of April 2026.

Phase 1: Pre-incorporation (weeks 1-3)

Before signing any tenancy or hiring anyone, get these decisions made:

• Entity type: LLC (Ltd. Şti.) for most foreign-owned subsidiaries; JSC (A.Ş.) only if you plan investor onboarding or stock issuance
• Capital structure: minimum capital is low (TL 50,000 for LLC as of 2026, subject to legislative updates), but operational capital should reflect 6 months of expenses
• Local director: non-Turkish nationals can serve as managing director; tax-residency implications differ — get tax advice for your country of residence
• Registered address: physical address required; virtual office providers exist but may complicate VAT registration
• Trade Registry (Ticaret Sicili) appointment booked
• CPA (SMMM) identified — ideally before incorporation; they often handle the formation paperwork
• Bank account preselected — Turkish banks have different documentation requirements for foreign-owned companies; Garanti BBVA, İş Bankası and HSBC are typically straightforward

Phase 2: Incorporation (weeks 3-6)

With the legal formation underway:

• Trade Registry registration complete; certified company extract obtained
• Tax Office registration — automatic from Trade Registry; tax number assigned
• Social Security Office (SGK) registration as employer
• VAT registration — typically immediate, but threshold-based exemption rarely applies to foreign-owned subsidiaries
• VERBİS registration with KVKK (Personal Data Protection Authority) — foreign-controlled entities processing Turkish citizen data must register regardless of size

Phase 3: Banking and treasury setup (weeks 5-8)

• Operating TL account opened
• EUR account if HQ funding comes in foreign currency
• USD account if any
• Online banking with API access — confirm with the bank that API/file integration is available for your account type. This is critical for ERP integration later.
• Foreign exchange office at the bank (for converting HQ funding)
• Forward and option desk introduction (if your business has FX exposure)
• Capital injection from HQ — ensure the wire is properly identified as capital contribution, not loan, to avoid CFC implications

Phase 4: ERP and electronic-document setup (weeks 6-10)

This is the critical phase where many subsidiaries lose months by under-investing.

• ERP selection completed (see our checklist for foreign investors)
• e-Fatura registration with GİB — automatic if your annual revenue threshold is exceeded; voluntary registration is also possible for credibility with corporate customers
• e-Arşiv capability configured for B2C and foreign-buyer invoices
• e-İrsaliye for shipping documents (if you do physical goods)
• e-Defter registration plan — typically required from year 2 if turnover triggers
• GİB Mali Mühür (digital tax seal) obtained — required for all electronic documents
• CPA (SMMM) seat in the ERP, with scoped permissions
• Chart of accounts mapped to Turkish standard (Tek Düzen Hesap Planı) and to HQ chart for consolidation
• Multi-currency configured (TL functional + reporting currency)
• VAT codes correctly configured (KDV 1, 10, 20 rates as of 2026; verify current rates with CPA)

Phase 5: HR and payroll (weeks 8-12)

• First hire start date confirmed
• Employment contract template approved by Turkish lawyer (mandatory clauses differ from EU standard)
• Payroll software / module integrated with ERP — Birasyo, Logo, Mikro all offer this
• SGK declarations automation (monthly filing required)
• Salary bank accounts opened (mass payroll typically uses one bank)
• Mandatory benefits configured: 14 days annual leave (rising to 20+ with seniority), 56-day maternity leave, paternity leave, religious holidays
• Workplace medical exam booked for employees (mandatory annual)
• OHS (occupational health and safety) compliance — outsourced provider engaged

Phase 6: First invoice readiness (weeks 10-14)

The moment your first invoice goes out, you've created lasting compliance trail:

• Customer master data (Turkish + foreign) loaded with correct VAT IDs
• Vendor master data loaded with KVKK-compliant data
• e-Invoice tested with a low-value transaction in production GİB environment
• Bank reconciliation automated for at least one TL account
• Audit log enabled by default (KVKK requirement, also general best practice)
• Backup retention policy confirmed: minimum 5 years, 10 for e-Defter
• CPA monthly close calendar agreed: cut-off date, supporting document handoff, declaration filing

Phase 7: Reporting to HQ (weeks 12-16)

• HQ chart of accounts mapping in place
• Monthly reporting package template agreed (TL + USD/EUR P&L, balance sheet, cash flow)
• Intercompany processes documented (transfer pricing, royalty, service fees)
• Local audit firm identified for year-end (independent audit may be mandatory once thresholds hit)
• Year-end closing calendar distributed (Turkish tax year is calendar year)

The 5 most common mistakes

1. Hiring a CPA at month 3, not pre-incorporation. The CPA's input on incorporation choices (entity type, capital, registered address) saves repeated paperwork.

2. "We'll do payroll on Excel for the first quarter." Excel-managed payroll virtually guarantees an SGK error within 6 months. Use a proper payroll module from day one.

3. Treating ERP as a year-2 project. Electronic invoicing is mandatory from day one. Implementing an ERP "later" means rebuilding everything.

4. No HQ chart-of-accounts mapping at start. Three months later you realise your local books don't aggregate cleanly to HQ chart, and you do a painful manual reconciliation every month for 18 months.

5. Underestimating KVKK / VERBİS. Penalties for non-compliance are real. Foreign-controlled entities process Turkish citizen data and the registration is mandatory; ignoring it is not a viable strategy.

Birasyo for Türkiye subsidiary setup

Birasyo's onboarding for foreign-owned subsidiaries:

• 5-business-day deployment with parallel-running phase
• Bilingual (TR + EN) interface and documentation
• HQ chart-of-accounts mapping pre-configured for major standards (US GAAP, IFRS, German HGB)
• Multi-currency P&L and balance sheet from day one
• All four electronic documents (e-Fatura, e-Arşiv, e-İrsaliye, e-Defter) included
• Free CPA (SMMM) seat in every plan
• KVKK / GDPR compliance documentation included

If you're planning a Türkiye subsidiary in 2026, book a 1-hour planning call — we'll walk through your specific situation and produce a custom checklist.

Related reads:

• ERP Selection Checklist for Foreign Investors in Türkiye
• Working with a Turkish CPA Inside Your ERP
• KVKK vs GDPR — ERP Compliance Cheat Sheet