Can a Foreign App Hire Commission-Based Sales Agents in Turkey Without a Company? PE & SGK
What UAE and other foreign software businesses should check before appointing Istanbul sales representatives to sign up restaurants, clubs, event promoters or other Turkish merchants.
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Three local sales models — and why they are not interchangeable
An established Turkish agency invoices multiple clients, controls its own workflow, bears its own business expenses and has no authority to bind the foreign app operator unless expressly analysed. Independence must be real, not cosmetic.
A Turkish-resident individual sources venues and earns a commission. Whether this is commercial self-employment or in substance employment depends on how the work is actually organised, not merely on the payment method.
The foreign company directs schedules, territories, reporting, scripts and methods and manages a continuing local sales operation. Employment/SGK and PE risk typically require closer scrutiny.
The representative negotiates key terms or habitually concludes venue contracts for the foreign principal. Dependent-agent permanent establishment and treaty attribution need a specific review.
Independent contractor or employment? Examine the factual relationship
| Operational question | Why it matters |
|---|---|
| Who chooses working days, hours and place? | Extensive direction may signal a relationship closer to employment than independent business. |
| Does the representative have other paying clients? | Commercial independence is a relevant factor; exclusivity can increase dependence concerns. |
| Who supplies CRM systems, equipment and workspace? | Control and integration into the foreign company’s local organisation deserve review. |
| Who bears commercial expenses and the risk of no sales? | Relevant to whether the supplier is operating an independent enterprise. |
| Can the agent offer discounts or accept contracts? | Material for the corporate-tax dependent-agent analysis; the precise treaty wording matters. |
| How are commissions documented and invoiced? | Check the agent’s business tax registration, invoicing status, VAT and local withholding/SGK responsibilities. |
The Social Security Institution distinguishes insurance under 4/1(a) for persons working pursuant to a service contract and 4/1(b) for qualifying independent self-employed persons. A foreign agreement stating that “no employment exists” cannot, by itself, displace the underlying legal relationship.
Can a commission-based agent create a Turkish permanent establishment for a UAE company?
Possibly. Permanent establishment (PE) analysis depends on Turkish domestic law, the Türkiye–UAE double-tax treaty and any applicable treaty modifications. A local agent who solicits prospects without contracting authority is not necessarily treated the same as someone who regularly negotiates decisive terms, signs or effectively concludes customer agreements, or operates through premises at the foreign company’s disposal.
Several important questions need factual answers:
- Which entity appears on the signed venue agreement and invoice?
- Who agrees subscription pricing, annual renewal, cancellation and discounts?
- Does a UAE director routinely approve contracts without material changes, or actively negotiate them?
- Is the representative authorised to make binding statements for the foreign company?
- Is there a regular Istanbul office, desk, coworking arrangement or other place used for the enterprise?
- Is the agent working in the ordinary course of an independently operated agency?
The Revenue Administration has published a ruling explaining the relevance of a fixed place under the Türkiye–UAE treaty and how regular business use of premises may matter. It should not be interpreted as a ruling on all mobile-app or agency arrangements.
Read GİB’s Türkiye–UAE PE discussion and see our Foreign Company Turkish Tax Filing Guide.
Who invoices whom for the commission?
For a properly independent Turkish commercial agent, the practical starting point is a written agency/services contract and compliant invoices reflecting actual work. The Turkish supplier’s tax regime, the recipient’s country, where services are enjoyed and the character of the commission all influence VAT and tax treatment. A foreign payer should not assume that a commission is exempt from Turkish VAT solely because payment arrives from outside Türkiye. Determine whether any service-export requirements are met or whether the service is materially used in Türkiye.
Also distinguish commission for acquiring venues from commission on paid subscriptions, from a separate management service. These different fees may need different commercial terms and accounting treatment.
How should the independent-agent agreement be drafted?
A qualified Turkish lawyer should address at least these commercial and labour-law elements, while a CPA assesses the tax consequences:
- Scope: lead-generation, introduction, onboarding support and services the representative may not perform.
- Contract authority: whether the agent may negotiate, discount, accept or sign a venue contract on the principal’s behalf.
- Fee: what constitutes an accepted lead, when commission is earned, invoice requirements, clawbacks and nonpayment events.
- Independent-business reality: how the supplier runs its own operations, its equipment, other clients, costs and tax registrations.
- Data processing: venue contact details, consumer leads, CRM rights, confidentiality and KVKK roles.
- Advertising compliance: restrictions on statements about nightlife venues, regulated products and consumer promotions.
- Exit: termination rights, return of credentials, non-solicitation or exclusivity restrictions where lawful and enforceable.
Practical comparison: minimal-investment pilot versus local sales organisation
| Pilot scenario | Primary exposure to review | Decision point |
|---|---|---|
| A UAE company retains independent Istanbul agencies to refer venues | Genuine agency independence, customer-contract process, proper commission invoicing and KVKK | Can work be confined to introductions without a continuing dependent local operation? |
| One individual acts exclusively as the app’s city sales manager | Service-contract/SGK classification, office, managerial control and PE | Is this in substance employment or a dependent agent arrangement? |
| Several local reps sign paid venue subscriptions and collect payments | Onshore contractual authority, local taxable presence, VAT and invoicing framework | Has the business reached the point where a local entity and compliant payroll arrangement is more appropriate? |
Appointing local venue agents? Have them use legally reviewed marketing scripts: see the nightlife-app advertising/KVKK checklist and the foreign-app subscription/advertising tax guide.
Frequently asked questions
Does paying only commission remove employer SGK obligations?
No. Compensation structure alone does not determine whether an employment relationship exists. Turkish law looks at the facts and the applicable contractual/legal relationship.
Can a foreign company pay an agent’s Turkish bank account directly?
Payment mechanics do not determine the underlying tax or employment classification. Review the service, invoices, residency, and currency/payment rules where relevant.
Is a written “no authority to sign” clause sufficient to avoid a PE?
Not necessarily. The real activities and the applicable treaty wording matter, including how contracts are negotiated and concluded in practice.
Does a single independent Turkish agency automatically require incorporation?
Not automatically. A genuine independent relationship can differ from a dependent sales organisation, but the complete business model and legal requirements must be assessed.
Can a UAE company directly hire Turkish employees without a Turkish company?
This requires specialist labour, payroll, SGK and corporate-registration analysis; the absence of a subsidiary does not remove employer obligations or guarantee that the arrangement is workable.
Assess your Turkish representative model before contracts are signed
SystemsCPA can assess the proposed foreign-platform tax position, agent payments and potential Turkish taxable presence. Employment classifications and agency agreements should be reviewed by qualified Turkish legal counsel. Send us anonymised draft contractual terms and a description of the sales process for a scoped written tax assessment.
Request an agent/PE tax review →Contact our team →
SystemsCPA · OZM Consultancy · Reviewed 14 October 2026. General information; specialist labour-law advice is separate from CPA tax advice.
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SYSTEMS CPA supports foreign-owned companies with company formation, accounting, tax compliance and payroll in Turkey — one accountable local partner. Reviewed by Evren Özmen, SMMM (Certified Public Accountant), TÜRMOB Reg. No. 35675.
