Repatriation of Profits
"Can foreign companies freely repatriate profits from Turkey?"
Quick Answer
Repatriation is generally permitted for dividends, royalties, service fees, loan interest, and capital, but payments must be properly documented and tax compliant. Withholding tax can apply, treaty relief may reduce it, and banks often request agreements, invoices, and corporate approvals.
Repatriation of Profits in Turkey
Repatriation is mainly governed by foreign investment rules, tax legislation, and banking compliance practice. The key questions are (i) what type of payment is being made (dividend, royalty, interest, service fee, capital repayment), (ii) whether corporate law prerequisites are met (for example dividend distribution approvals), and (iii) whether the payment is supported by valid contracts and invoices.
Key Points to Remember
- Permitted channels: dividends, royalties, interest, service fees, capital transfers
- Tax impact: withholding tax may apply; treaties can reduce rates
- Documentation: agreements, invoices, board or general assembly resolutions, proof of underlying transaction
- Bank practice: AML and compliance checks can affect timing and requested documents
Practical Steps and Common Pitfalls
Ensure the payment basis matches the documentation (for example, management fee under a services agreement with transfer pricing support, or royalty under an IP license). For dividends, confirm distributable profits and required corporate approvals. For cross border fees, consider transfer pricing and permanent establishment risks. In practice, clean documentation and tax filings reduce delays during bank compliance reviews.
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We share general information on profit transfer channels and banking compliance in Türkiye. Contacting us does not create a lawyer client relationship.
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