59343 Turkey © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. 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ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Turkey. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the "good practice" economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Turkey is ranked 65 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Turkey - Compared to global good practice economy as well as selected economies: Turkey's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 65 Starting a Business 63 Dealing with Construction Permits 137 Registering Property 38 Getting Credit 72 Protecting Investors 59 Paying Taxes 75 Trading Across Borders 76 Enforcing Contracts 26 Closing a Business 115 2 Summary of Indicators - Turkey Starting a Business Procedures (number) 6 Time (days) 6 Cost (% of income per capita) 17.2 Min. capital (% of income per capita) 9.9 Dealing with Construction Permits Procedures (number) 25 Time (days) 188 Cost (% of income per capita) 231.4 Registering Property Procedures (number) 6 Time (days) 6 Cost (% of property value) 3.0 Getting Credit Strength of legal rights index (0-10) 4 Depth of credit information index (0-6) 5 Public registry coverage (% of adults) 18.3 Private bureau coverage (% of adults) 42.2 Protecting Investors Extent of disclosure index (0-10) 9 Extent of director liability index (0-10) 4 Ease of shareholder suits index (0-10) 4 Strength of investor protection index (0-10) 5.7 Paying Taxes Payments (number per year) 15 Time (hours per year) 223 Profit tax (%) 17.0 Labor tax and contributions (%) 23.1 Other taxes (%) 4.4 Total tax rate (% profit) 44.5 Trading Across Borders Documents to export (number) 7 Time to export (days) 14 Cost to export (US$ per container) 990 Documents to import (number) 8 Time to import (days) 15 Cost to import (US$ per container) 1063 3 Enforcing Contracts Procedures (number) 35 Time (days) 420 Cost (% of claim) 18.8 Closing a Business Recovery rate (cents on the dollar) 21.1 Time (years) 3.3 Cost (% of estate) 15 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy's regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy's business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.60 0.50 Doing business has 0.40 become easier (DB change 0.30 score) 0.20 0.10 0.00 Georgia Azerbaijan Russian Romania Bulgaria Turkey Federation 6 1. Benchmarking Starting a Business Regulations: Turkey is ranked 63 overall for Starting a Business. Ranking of Turkey in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Turkey compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Turkey 6 6 17.2 9.9 Comparator Economies Azerbaijan 6 8 3.1 0.0 Bulgaria 4 18 1.6 0.0 Georgia 3 3 5.0 0.0 Romania 6 10 2.6 0.9 Russian Federation 9 30 3.6 1.9 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Turkey Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 56 63 Procedures (number) 6 6 6 6 Time (days) 6 6 6 6 Cost (% of income per capita) 20.7 14.9 14.2 17.2 Min. capital (% of income per capita) 16.2 10.9 9.5 9.9 3. The following graphs illustrate the Starting a Business sub indicators in Turkey over the past 4 years: 9 Starting a Business Summary - Turkey This table summarizes the procedures and costs associated with setting up a business in Turkey. STANDARDIZED COMPANY Legal Form: Limited Sirket (LS) City: Istanbul Registration Requirements: No: Procedure Time to complete Cost to complete 1 Execute and notarize articles of association, signature declaration of 1 TRY 1,000 the managers, copies of each manager's identity card or passport and commercial books. 2 Deposit a percentage of capital to the account of Competition 1 TRY 50 Authority 3 Deposit the initial capital in a bank and obtain the certificate of paid-in 1 no charge capital 4 File the incorporation notice form, commitment letter, and Chamber 2 TRY 942 registration statement at the Trade Registry Office 5 * Have a notary certify the legal books 1 TRY 174 6 Follow up with the tax office on Commercial Registry's notification 1 no charge * Takes place simultaneously with another procedure. 10 Starting a Business Details - Turkey Procedure 1 Execute and notarize articles of association, signature declaration of the managers, copies of each manager's identity card or passport and commercial books. Time to complete: 1 Cost to complete: TRY 1,000 Comment: The following documents are required: - Notarized articles of association (three, one original). - Notarized signature declarations (two copies). - Notarized identity cards of company managers (two copies). According to amendments to the Stamp Tax Law (effective January 1, 2004), the incorporation documents are exempt from the stamp tax. The certification fee will be paid to the notary public for executing the articles of incorporation. The updated fee schedule for notarizing incorporation documents: - Articles of association (three copies, each of 10 pages): YTL 900 (estimate). - Signature declarations of company managers (two, each with five signatures): YTL 100 (estimate). Procedure 2 Deposit a percentage of capital to the account of Competition Authority Time to complete: 1 Cost to complete: TRY 50 Comment: To register with the Commercial Registry, founders must obtain the original receipt from Ziraat Bankasi. This receipt shows that 0.04% of the company's capital has been paid to the Competition Authority at the central bank or a public bank. Procedure 3 Deposit the initial capital in a bank and obtain the certificate of paid-in capital Time to complete: 1 Cost to complete: no charge Comment: If the whole capital of the Company is not paid in advance, the capital of the Company can also be paid in within three months following the registration. Kindly note that another option is; 25% of the capital can be paid in the first 3 months following the registration of the company, and the balance of the subscribed capital shall be paid within 3 years of incorporation. Procedure 4 File the incorporation notice form, commitment letter, and Chamber registration statement at the Trade Registry Office Time to complete: 2 Cost to complete: TRY 942 Comment: Founders must submit the incorporation notice form, the commitment letter, and the chamber registration statement the Trade Registry Office. However, the formation of a limited liability company does not require a court application. Thus, upon gathering the following documents, founders may begin the registration process: 11 - For each individual shareholder who is not a Turkish citizen, one copy of the shareholder's passport notarized by a Turkish notary. - For each individual shareholder who is a Turkish citizen or for a Turkish representative of such shareholder, two certified copies of the identity card. - Three copies of an establishment notification form (kurulu bildirim formu). - Three copies of the notarized articles of association. - Bank deposit receipt from the Competition Authority Account (0.04% of the company's capital). - An undertaking (taahhütname) signed by the authorized company representatives. - For each person authorized to represent the founders of the limited liability company, two copies of the signature. The Commercial Registry Office notifies the Tax Office and the District Employment Office about the company incorporation. The Registry arranges for an announcement in the Commercial Registration Gazette within about 10 days of company registration. A tax identification plaque must be obtained from the local tax office after the Commercial Registry Office notifies the local tax office. The Registry Office also notifies the Ministry of Labor and Social Security, Directorate of the Social Security Institution of the incorporation. A social security number must be obtained from the relevant Social Security Administration office, and company employees must be registered with that administration. The registration fee for a limited liability company has been increased to YTL 555: - Publication or advertisement fee: YTL 0.23 per word. - Startup notice: YTL 38. - Trade Registry Gazette fee: YTL 1.50. - Publication: YTL 90­460. - Registration fee for manager's signature -- First manager's signature: YTL250. -- Each additional manager's signature: YTL 198.85. Fee schedule for annual membership in the Istanbul Chamber of Commerce (based on capital): - YTL 1 - 999 (capital): YTL 70 - YTL 1,000 - 24,999 (capital): YTL 100 - YTL 25,000 - 249,999 (capital): YTL 150 - YTL 250,000 - 999,999 (capital): YTL 200 - YTL 1,000,000 and up (capital): YTL 225 Procedure 5 Have a notary certify the legal books Time to complete: 1 Cost to complete: TRY 174 Comment: The founders must certify the legal books the day they register the company with the Commercial Registry. The notary public must notify the Tax Office about the commercial book certification. Fee schedule for legal book certification: - Certification up to 100 pages: YTL 45 -Certification up to 200 pages: YTL 56 Procedure 6 Follow up with the tax office on Commercial Registry's notification Time to complete: 1 Cost to complete: no charge Comment: The Commercial Registry Office notifies the Tax Office and the Social Security Administration of the company's incorporation. In practice, to expedite the registration process, company representatives follow up on whether the notification has been received. A tax officer comes to the company headquarters to prepare a determination report. There must be at least one authorized 12 signature in the determination report. According to "The Law Number 4884 Regarding the Amendments on Turkish Commercial Code, Tax Procedure Law, Stamp Act, Labor and Social Security Law" Trade Registry Officers send company establishment form which includes tax number notification to Tax Office. 13 14 1. Benchmarking Dealing with Construction Permits Regulations: Turkey is ranked 137 overall for Dealing with Construction Permits. Ranking of Turkey in Dealing with Construction Permits - Compared to good practice and selected economies: 15 The following table shows Dealing with Construction Permits data for Turkey compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Turkey 25 188 231.4 Comparator Economies Azerbaijan 31 207 388.9 Bulgaria 24 139 442.3 Georgia 10 98 23.2 Romania 17 228 73.9 Russian Federation 53 540 4141.0 16 2. Historical data: Dealing with Construction Permits in Turkey Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 133 137 Procedures (number) 25 25 25 25 Time (days) 188 188 188 188 Cost (% of income per capita) 369.9 249.3 218.8 231.4 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Turkey over the past 4 years: 17 Dealing with Construction Permits in Turkey The table below summarizes the procedures, time, and costs to build a warehouse in Turkey. BUILDING A WAREHOUSE City: Istanbul Registration Requirements: No: Procedure Time to complete Cost to complete 1 Obtain lot plan 7 days TRY 92 2 Obtain cadastral plan 3 days no charge 3 Obtain road datum document 2 days TRY 105 4 Hire an independent building inspector 4 days TRY 13,490 5 Obtain approval of architectural drawings from the municipality 30 days TRY 3,500 6 Obtain approval from the Fire Department 2 days TRY 1,860 7 * Obtain approval of technical drawings from the Turkish Electricity 1 day no charge Corporation (TEDAS) 8 * Obtain approval of technical drawings from the phone company 1 day no charge 18 9 Obtain contractor registration document from the chamber of commerce 1 day TRY 555 10 Obtain project approval from the civil defense directorate of the district 7 days TRY 30 governor's office 11 Obtain proof of payment and clearance of water and sewerage 20 days TRY 1,208 infrastructure 12 Receive foundation registration number from the Social Security 1 day no charge Institution 13 Obtain building permit 30 days TRY 5,000 14 Obtain proof of tax payment 1 day no charge 15 Request inspection from the civil defense experts 1 day no charge 16 Receive inspection from the civil defense experts in the district governor's 1 day no charge office 17 Receive final inspection from the municipality 1 day no charge 18 * Obtain occupancy permit 30 days TRY 2,000 19 * Obtain proof of real estate tax payment 10 days no charge 20 * Change the title deed from a land title deed to a building title deed 10 days TRY 300 21 Request water connection and permission for discharge of sewerage and 40 days no charge rainwater 22 Receive inspection and obtain connection from the water and sewerage 7 days no charge department 23 Obtain electricity connection 2 days TRY 1,000 24 * Obtain approval of telephone system from the Telephone Regional 3 days no charge directorate 25 * Obtain telephone connection 2 days TRY 7 * Takes place simultaneously with another procedure. 19 Dealing with Construction Permits Details - Turkey Procedure 1 Obtain lot plan Time to complete: 7 days Cost to complete: TRY 92 Agency: District Land Registry Comment: BuildCo applies to the Land Registry. Technicians from the Land Registry peg the corners of the plot, fix its location on the land, and prepare the plan for application. According to annual indexation of official fees for issuing the lot plan by the Land Registry there would be the following table: 1-1000 m2 .................................................92,00.TL. 1001-3000 m2 .................................................139,00.TL. 3001-5000 m2 .................................................290,00.TL. 5001- 10000 m2 ...............................................359,00.TL. 10001-20000 m2 .................................................488,00.TL. 20001-50000 m2 ...............................................637,00.TL. 50001-100000 m2 .............................................778,00.TL. 100001-200000 m2 .............................................922,00.TL. 200001-500000 m2 ........................................ 1.074,00.TL. The fee applied for BuildCo case is TYR 92, which may be multiplied by a ratio based on the actual location of the warehouse in certain district. Procedure 2 Obtain cadastral plan Time to complete: 3 days Cost to complete: no charge Agency: District Cadastral Office Comment: BuildCo submits an application to the Cadastral Plan Branch of the relevant municipality, along with the two documents described in the previous procedure, and obtains the Cadastral Plan Document. This document states the development conditions applicable to the plot. Procedure 3 Obtain road datum document Time to complete: 2 days Cost to complete: TRY 105 Agency: Road Datum Branch, Istanbul Metropolitan Municipality Comment: BuildCo must apply to the Road Datum Branch of the relevant municipality with the documents obtained in the previous procedures. The branch technicians set all the necessary levels--road, entrance, plot, building corners, and the like--to be the basis for the design process of the works that will follow, and issue a "road datum document." Procedure 4 Hire an independent building inspector Time to complete: 4 days 20 Cost to complete: TRY 13,490 Agency: Private Building Inspection Agency Comment: The company must select an independent building inspector and sign a service contract with this inspector. The inspector must check and approve all the project's plans before they are submitted to the municipality. The list of project plans is extensive and includes the architectural design of the building done by design consultants; the reinforced concrete and insulation project plans prepared by a civil engineer; the fire safety project plans prepared jointly by an architect and the mechanical engineer for utilities; the project plans and documents for hot water, and those of central heating facilities prepared by a mechanical engineer; the electrical wiring project plans prepared by an electrical engineer; the telecommunications system project plans prepared by an electrical engineer; and the landscape project plans prepared by a landscape engineer. Selecting an independent building consultant takes only a day. However, practitioners agree that it takes at least 3 days for the building inspector to review and approve all the documents before they are submitted to the municipality. Hence, for the case considered here, it is assumed that 4 days are needed to complete this procedure. The building inspector charges a fee of 3% of the total building cost.On 5 February 2008, "Regulation on the mplementation of Building nspection" was adopted. According to it there have been several amendments in amount of the building inspector's fee. Accordingly, upon the period of the construction, the building inspector's fee changes between 2,57% and 5,31% of total construction cost. This fee is now paid in six installments whereas before was in four installments. The inspector receive the following payments at the following stages: -10% when the building permit is obtained. - 10% when the foundation is completed. -40% when the static structure is completed. -20% when the detailed works are completed. -15% when the mechinacal and electricity system are completed. -5 % when the construction completion minute is approved by the municipality. However, for the case considered here, it is assumed that any interaction with the independent building inspector is an internal process within BuildCo. Hence, the phased-out payment is included in this procedure as a one lump sum, for methodological reasons. Procedure 5 Obtain approval of architectural drawings from the municipality Time to complete: 30 days Cost to complete: TRY 3,500 Agency: District Municipality Comment: The company must submit the documents listed below along with the architectural drawings to the project branch of the municipality: - The authorization document of the architect. - The plan for the application. - The cadastral plan document. - The road datum document. - The title deed registration document. - The plot share distribution table, if there is more than one independent section on the land (for instance, an apartment building) - Built-up area breakdown table in square meters. - Ratified geological study. 21 - Three sets of the elevator preliminary report (not applicable in the warehouse case). The municipality must approve the project's proposed designs. The fire safety project should also be submitted to the municipality for approval and can be included in this procedure. If the municipality asks for changes to be made to the architectural designs during the approval process, these changes should be reflected in the engineering and landscaping projects as well. For final approval, these project plans are submitted to the municipal project branch, for static, sanitation facility, heating and heat insulation, and landscaping project plans to the Turkish Electricity Distribution Corporation (TEDAS), for the electricity project plans; and to the telephone company, for the telecommunication project plans. Fire-electricity and fire-mechanical project plans must be approved by the Fire Department. Article 22 of the Land Development Law establishes a 30-day statutory time limit for this procedure. Although in some cases the approval may be granted within 7 days, practitioners agree that most cases require the full 30 days allowed by law. The cost estimated for this procedure ranges from TRY 3,000 to TRY 3,500. The fees found on one district municipality's Web site show the cost breakdown to include fees for examination, approval, and various other taxes (e.g., sign posts, trees). Procedure 6 Obtain approval from the Fire Department Time to complete: 2 days Cost to complete: TRY 1,860 Agency: Fire Department, Istanbul Metropolitan Municipality Comment: BuildCo must apply for fire facilities approval to the Istanbul Metropolitan Municipality Fire Brigade. TAs of January 1, 2009 the fee schedule for issuing fire approval of construction projects has been updated: 1. group buildings: m² (exempted) 2. group buildings: m² 0.36 TRY 3. group buildings: m² 0.60 TRY 4. group buildings: m² 0.80 TRY 5. group buildings: m² 1.20 TRY 6. group buildings: m² 1.43 TRY 7. group buildings: m² 3.50 TRY 8. group buildings: m² 3.50 TRY In case of BuildCo it would classify into group 6 (factory buildings, hospitals, hotels, warehouses). So, in the present case the total cost is 1.300,6 X 1.43 = TRY 1.859. Procedure 7 Obtain approval of technical drawings from the Turkish Electricity Corporation (TEDAS) Time to complete: 1 day Cost to complete: no charge Agency: Turkish Electricity Corporation (TEDAS) Comment: If the building requires new electrical facilities from the Turkish electricity corporation (TEDAS), the TEDAS charges a fee for the new facilities. 22 Procedure 8 Obtain approval of technical drawings from the phone company Time to complete: 1 day Cost to complete: no charge Agency: Türk Telekom Comment: If the building requires new telecommunication facilities from the Post and Telephone Corporation (PTT), the PTT charges a fee for these new facilities. Procedure 9 Obtain contractor registration document from the chamber of commerce Time to complete: 1 day Cost to complete: TRY 555 Agency: Chamber of Commerce Comment: The contractor (BuildCo) must obtain the "contractor registration document" for the year in which the building permit is issued. Procedure 10 Obtain project approval from the civil defense directorate of the district governor's office Time to complete: 7 days Cost to complete: TRY 30 Agency: Civil Defense Directorate (District Governor's office) Comment: The company must submit the project to the civil defense directorate of the district governor's office for approval of the shelter provided in the designed building. Procedure 11 Obtain proof of payment and clearance of water and sewerage infrastructure Time to complete: 20 days Cost to complete: TRY 1,208 Agency: Water and Sewerage Department (Istanbul Metropolitan Municipality) Comment: The company contacts the water and sewerage department to pay the fees and participation share in the cost of the water and sewerage infrastructure. A clearance document is obtained, that shows that complete payment was made. Procedure 12 Receive foundation registration number from the Social Security Institution Time to complete: 1 day Cost to complete: no charge Agency: Social Security Institution Comment: The company must register the staff that will be working at the construction site with the Social Security Institution. 23 Procedure 13 Obtain building permit Time to complete: 30 days Cost to complete: TRY 5,000 Agency: District Municipality, Licensing Branch Comment: The company requests a building permit from the licensing branch of the municipality. The approved design, engineering drawings, and other necessary documents (described in Procedures 7 to 16) must be attached to this request. The company must pay the fees before receiving the building permit and starting foundation work. Building permits are usually issued 1­2 months after submission of the application. The law provides for a statutory time limit of 30 days for the municipality issuing the permit. There are frequent complaints from applicants about not receiving the building permit within the specified time. Following the building permit issuance, the municipal building control authority will randomly conduct inspections during the construction on site, in addition to private inspection. Procedure 14 Obtain proof of tax payment Time to complete: 1 day Cost to complete: no charge Agency: Tax Department Comment: The company must pay all taxes owed, and obtain a tax clearance document from the appropriate tax departments. This document states that all taxes owed have been paid. Procedure 15 Request inspection from the civil defense experts Time to complete: 1 day Cost to complete: no charge Agency: Civil Defense Directorate (District Governor's office) Comment: BuildCo must first request an inspection that takes a day. Depending on the availability of inspectors, it takes approximately a week to receive the final inspection from the district governor's office. Procedure 16 Receive inspection from the civil defense experts in the district governor's office Time to complete: 1 day Cost to complete: no charge Agency: Civil Defense Directorate (District Governor's office) Comment: The civil defense experts of the district governor's office determine (on site) whether the property conforms to the project, documenting its conformity with a report. Procedure 17 Receive final inspection from the municipality 24 Time to complete: 1 day Cost to complete: no charge Agency: District Metropolitan Municipality Comment: Procedure 18 Obtain occupancy permit Time to complete: 30 days Cost to complete: TRY 2,000 Agency: District Metropolitan Municipality Comment: Land Development Law No. 3194 requires an occupancy permit for all new constructions. The company applies for the occupancy permit by submitting the following documents: - The invoice for the building. - The building permit. - The built-up area breakdown table in square meters. - The original copy of the plot title deed. - The real estate tax declaration. - The real estate tax receipt. An authorized commission from the municipality inspects the building and verifies that it complies with the project. This commission then issues the occupancy permit. The law specifies a statutory time limit of 30 days for the municipality to issue an occupancy permit. Practitioners observe that this statutory time limit is not frequently observed, and so, this process can take on average 2 months. Procedure 19 Obtain proof of real estate tax payment Time to complete: 10 days Cost to complete: no charge Agency: District Metropolitan Municipality Comment: Real estate taxes must be submitted to the tax office within 3 months of receipt of the title deeds. The company must obtain a copy of the real estate tax form and a tax clearance statement from municipal accounting office. Procedure 20 Change the title deed from a land title deed to a building title deed Time to complete: 10 days Cost to complete: TRY 300 Agency: Title Deed Department Comment: The company must submit the following documents to the title deed department in order to register the building: - The title deed. - The plot share distribution table. - The occupancy permit. 25 - The cadastral survey pages. Registering the warehouse takes some time due to backlogs and long waiting times at the Land Registry. However, with connections at the Land Registry, the process may take as little as 3 days. Procedure 21 Request water connection and permission for discharge of sewerage and rainwater Time to complete: 40 days Cost to complete: no charge Agency: Istanbul Water Supply and Sewerage General Directorate (ISKI) Comment: The company must request permission from the water and sewerage department to discharge sewage and rainwater. The technicians from this department perform their inspections at the site and grant permission for connection of wastewater and rainwater to the system. The company can also request the water connection at the same time. The technicians from the same department check that the canal connections comply with the approved design. The technicians then issue a letter of approval for connection. Procedure 22 Receive inspection and obtain connection from the water and sewerage department Time to complete: 7 days Cost to complete: no charge Agency: Istanbul Water Supply and Sewerage General Directorate (ISKI) Comment: Procedure 23 Obtain electricity connection Time to complete: 2 days Cost to complete: TRY 1,000 Agency: Turkish Electricity Corporation (TEDAS) Comment: Procedure 24 Obtain approval of telephone system from the Telephone Regional directorate Time to complete: 3 days Cost to complete: no charge Agency: Telephone Regional Directorate Comment: Procedure 25 Obtain telephone connection 26 Time to complete: 2 days Cost to complete: TRY 7 Agency: Türk Telekom Comment: 27 28 1. Benchmarking Registering Property Regulations: Turkey is ranked 38 overall for Registering Property. Ranking of Turkey in Registering Property - Compared to good practice and selected economies: 29 The following table shows Registering Property data for Turkey compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Turkey 6 6 3.0 Comparator Economies Azerbaijan 4 11 0.2 Bulgaria 8 15 3.0 Georgia 1 2 0.1 Romania 8 48 1.3 Russian Federation 6 43 0.1 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 30 2. Historical data: Registering Property in Turkey Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 35 38 Procedures (number) 6 6 6 6 Time (days) 6 6 6 6 Cost (% of property value) 3.1 3.0 3.0 3.0 3. The following graphs illustrate the Registering Property sub indicators in Turkey over the past 4 years: 31 Registering Property in Turkey This topic examines the steps, time, and cost involved in registering property in Turkey. STANDARDIZED PROPERTY Property Value: 629,667.49 City: Istanbul Registration Requirements: No: Procedure Time to complete Cost to complete 1 The buyer conducts a non-encumbrance check on the 1 day no cost property 2 Managers obtain an authorization certificate of their 1 day TL 21 authority to conduct transactions on companies' behalf 3 Obtain an earthquake insurance policy, or amend the 1 day no cost (unless a new existing one insurance is needed) 4 Parties apply for registration and obtain tax payment 1 day no cost assesment 5 Registration fee is paid at a commercial bank 1 day TL 135(registration fee) + 3% of declared transaction price (mortar dues) or 3% of the taxable value of the real estate (whichever is higher) 6 Transaction is completed at the registry office 1 day Already paid in Procedure 5 32 Registering Property Details - Turkey Procedure 1 The buyer conducts a non-encumbrance check on the property Time to complete: 1 day Cost to complete: no cost Agency: Registry Office Comment: Although not mandated by law, non-encumrance check is a must procedure without which buyers do not proceed with the transfer process. The buyer almost always checks whether or not the property is free of liens and encumbrances. For this, the seller would need to obtain the document showing that the property is free of disputes. By law, the records are not open to public: the buyer can obtain this document only with a power attorney of the seller. Therefore, this document is typically obtained by the seller who is often accompanied by the buyer. For transactions that are undertaken by lawyers, this procedure is taken care of by lawyers (who have the power of attorney from the seller and have a legal right to search titles). The information is computerized, takes minutes to check and is free of charge. Procedure 2 Managers obtain an authorization certificate of their authority to conduct transactions on companies' behalf Time to complete: 1 day Cost to complete: TL 21 Agency: Company Registrar Comment: If the sale transaction will be made in person by the company signatories, the managers should obtain a separate document from the trade registry, showing that they have the authority to conduct transactions before land registry on companies' behalf. If the sale transaction will be made in proxy given by the company signatories, the representatives should be given special proxies, which will be issued before the notary and inclusive of the authorized managers' statement as well as the photographs. The notary might ask the manager to show the above mentioned authorization document or a signature circular of the company. Procedure 3 Obtain an earthquake insurance policy, or amend the existing one Time to complete: 1 day Cost to complete: no cost (unless a new insurance is needed) Agency: Insurance Company Comment: If a "compulsory earthquake insurance policy" had not been issued for the building, one must be prepared since in practice, when selling the building or asking for a loan on it, it is usually required. The cost of this insurance policy depends on the features such as the area of the building and the place thereof, and the insurance brokers automatically calculate it. If there is an existing "compulsory earthquake insurance policy" which is still valid at the date of the sale (i.e. if the term of the insurance policy has not yet expired), then there is no need to issue another one just as a result of the change of ownership. However, the new owner of the property shall have the insurance policy amended to indicate his own name under the policy, which will be arranged between the insurance company and the new owner. 33 Procedure 4 Parties apply for registration and obtain tax payment assesment Time to complete: 1 day Cost to complete: no cost Agency: Registry Office Comment: The seller and the purchaser (or their representatives) meet at the registry office and fill in an application form. Once the required documents are presented, the parties declare the consideration to be paid by the purchaser. The officer calculates the mortar dues, and gives the account details of the registry office for the payment, and makes an appointment on the very day or on the consecutive day for the parties to pay the dues and come back again for signature. The documentation shall include: Tax registration certificates of the companies. The Authorization Certificate of the manager obtained from trade registry, if transactions are carried out by the company signatories. The notarized proxies of the representatives (if they will perform the transaction) The identity cards of signatories (passport for foreigners) Two photographs of each person who would actually sign the registry documents. Signature Circular Title deed copy or information regarding the title deed of the property Procedure 5 Registration fee is paid at a commercial bank Time to complete: 1 day Cost to complete: TL 135(registration fee) + 3% of declared transaction price (mortar dues) or 3% of the taxable value of the real estate (whichever is higher) Agency: Commercial Bank Comment: Mortar dues are paid to the bank account of the land registry, and the bank will give a receipt of the payment. The mortar due is equal to 3% of the declared amount in Turkish Lira, collected 1.5% each from the parties, but in practice usually the purchaser pays all. The parties also pay a registration fee to cover overall expenses of Land Registries in Turkey. This is usually paid by the purchaser. Procedure 6 Transaction is completed at the registry office Time to complete: 1 day Cost to complete: Already paid in Procedure 5 Agency: Registry Office Comment: Once all the above procedures are fulfilled, the parties meet at registry office before the registry manager or his deputy at the appointment hour decided previously. The purchaser pays the consideration at that time. If it is already paid, the seller declares that it is fully paid. Then the parties both sign the land record sheet as well as the photographs of each other that are stuck to the document. Each person witnesses that he/she had made the transaction mutually with the person in the picture, the transfer of the title is then completed. The documentation shall include: payment receipts . 34 35 36 1. Benchmarking Getting Credit Regulations: Turkey is ranked 72 overall for Getting Credit. Ranking of Turkey in Getting Credit - Compared to good practice and selected economies: 37 The following table shows Getting Credit data for Turkey compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Turkey 4 5 18.3 42.2 Comparator Economies Azerbaijan 6 5 7.0 0.0 Bulgaria 8 6 37.0 13.1 Georgia 7 6 0.0 16.4 Romania 8 5 13.0 33.3 Russian Federation 3 5 0.0 14.4 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 38 2. Historical data: Getting Credit in Turkey Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 69 72 Strength of legal rights index (0-10) 4 4 4 4 Depth of credit information index (0-6) 5 5 5 5 Private bureau coverage (% of adults) 27.0 26.3 42.9 42.2 Public registry coverage (% of adults) 10.3 12.7 15.9 18.3 3. The following graphs illustrate the Getting Credit sub indicators in Turkey over the past 4 years: 39 Getting Credit in Turkey The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Turkey. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 5 bureau registry Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative data distributed? Yes Yes 1 Does the registry distribute credit information from retailers, trade No No 0 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? Yes No 1 Is data on all loans below 1% of income per capita distributed? Yes No 1 Is it guaranteed by law that borrowers can inspect their data in the Yes Yes 1 largest credit registry? Coverage 42.2 18.3 Number of individuals 20,000,000 7,799,160 Number of firms 3,000,000 2,148,810 40 Strength of legal rights index (0-10) 4 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, No without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without No requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, No proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the No grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? Yes Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? Yes Does the law authorize parties to agree on out of court enforcement? No 41 42 1. Benchmarking Protecting Investors Regulations: Turkey is ranked 59 overall for Protecting Investors. Ranking of Turkey in Protecting Investors - Compared to good practice and selected economies: 43 The following table shows Protecting Investors data for Turkey compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Turkey 5.7 Comparator Economies Azerbaijan 6.7 Bulgaria 6.0 Georgia 6.7 Romania 6.0 Russian Federation 5.0 44 2. Historical data: Protecting Investors in Turkey Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 57 59 Strength of investor protection index (0-10) 5.3 5.7 5.7 5.7 3. The following graph illustrates the Protecting Investors index in Turkey compared to best practice and selected Economies: 9.7 6.7 6.7 6.0 6.0 5.7 5.0 ia ia n rg nd ey ia ja an ra n ar eo rk ai a de sia om n al lg G rb tio Tu Fe us Ze Bu R ze R A ew N Note: The higher the score, the greater the investor protection. 45 Protecting Investors in Turkey The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Turkey. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 9 2 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 2 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 2 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 1 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 4 1 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 1 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 1 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 46 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 0 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 4 3 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 0 Whether the plaintiff can directly question the defendant and witnesses during trial? 1 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 0 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 0 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 5.7 47 48 1. Benchmarking Paying Taxes Regulations: Turkey is ranked 75 overall for Paying Taxes. Ranking of Turkey in Paying Taxes - Compared to good practice and selected economies: 49 The following table shows Paying Taxes data for Turkey compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Turkey 15 223 44.5 Comparator Economies Azerbaijan 18 306 40.9 Bulgaria 17 616 29.0 Georgia 18 387 15.3 Romania 113 222 44.9 Russian Federation 11 320 46.5 * The following economies are also good practice economies for : Payments (number per year): Qatar 50 2. Historical data: Paying Taxes in Turkey Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 73 75 Total tax rate (% profit) 45.1 45.5 44.5 44.5 Payments (number per year) 15 15 15 15 Time (hours per year) 223 223 223 223 3. The following graphs illustrate the Paying Taxes sub indicators in Turkey over the past 4 years: 51 Paying Taxes in Turkey The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Turkey, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Value added tax (VAT) 1 online 97 18.0% value added filing Advertising tax 2 various rates advertising expenses Stamp duty on contracts 1 0.8% transaction value Environment tax 2 fixed fee 0.00 (TRY 2,375) with 25% surcharge Transaction tax on 1 TRY 3.10 number of 0.10 checks per check checks Vehicle tax 1 fixed fee 0.40 (TRY 1,703) Tax on interest 0 withheld 15.0% interest 0.40 income Stamp duty on property 1 0.8% sale price 0.50 sale 52 Property transfer fee 1 1.5% sale price 0.90 Property tax 2 0.2% and value of 0.90 0.3% building and (doubled in land Istanbul) (reevaluated each year) Fuel tax 1 included in 1.50 fuel price Unemployment insurance 0 paid jointly 2.0% gross salaries 2.30 contributions Corporate income tax 1 online 46 20.0% taxable profit 17.00 filing Social security 1 online 80 18.25% gross salaries 20.80 contributions filing (19.5% January - September, 14.5% October - December) Totals 15 223 44.5 53 54 1. Benchmarking Trading Across Borders Regulations: Turkey is ranked 76 overall for Trading Across Borders. Ranking of Turkey in Trading Across Borders - Compared to good practice and selected economies: 55 The following table shows Trading Across Borders data for Turkey compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Turkey 7 14 990 8 15 1063 Comparator Economies Azerbaijan 9 43 2980 14 46 3480 Bulgaria 5 23 1551 7 21 1666 Georgia 4 10 1329 4 13 1316 Romania 5 12 1275 6 13 1175 Russian Federation 8 36 1850 13 36 1850 * The following economies are also good practice economies for : Time to export (days): Estonia 56 2. Historical data: Trading Across Borders in Turkey Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 72 76 Cost to export (US$ per container) 865 940 990 990 Cost to import (US$ per container) 1013 1063 1063 1063 Documents to export (number) 7 7 7 7 Documents to import (number) 8 8 8 8 Time to export (days) 14 14 14 14 Time to import (days) 15 15 15 15 3. The following graphs illustrate the Trading Across Borders sub indicators in Turkey over the past 4 years: 57 58 Trading Across Borders in Turkey These tables list the procedures necessary to import and export a standardized cargo of goods in Turkey. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 6 220 Customs clearance and technical control 3 200 Ports and terminal handling 3 270 Inland transportation and handling 2 300 Totals 14 990 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 8 280 Customs clearance and technical control 3 200 Ports and terminal handling 3 183 Inland transportation and handling 1 400 Totals 15 1063 59 Documents for Export and Import Export Bill of lading Certificate of origin Commercial invoice Customs export declaration Packing list Preferential certificate Technical standard/health certificate Import Bill of lading Cargo release order Certificate of origin Commercial invoice Customs import declaration Import license Technical standard/health certificate Terminal handling receipts 60 61 1. Benchmarking Enforcing Contracts Regulations: Turkey is ranked 26 overall for Enforcing Contracts. Ranking of Turkey in Enforcing Contracts - Compared to good practice and selected economies: 62 The following table shows Enforcing Contracts data for Turkey compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Turkey 35 420 18.8 Comparator Economies Azerbaijan 39 237 18.5 Bulgaria 39 564 23.8 Georgia 36 285 29.9 Romania 31 512 28.9 Russian Federation 37 281 13.4 63 2. Historical data: Enforcing Contracts in Turkey Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 25 26 Procedures (number) 36 35 35 35 Time (days) 420 420 420 420 Cost (% of claim) 18.8 18.8 18.8 18.8 3. The following graphs illustrate the Enforcing Contracts sub indicators in Turkey over the past 4 years: 64 Enforcing Contracts in Turkey This topic looks at the efficiency of contract enforcement in Turkey. Nature of Procedure (2010) Indicator Procedures (number) 35 Time (days) 420 Filing and service 30.0 Trial and judgment 290.0 Enforcement of judgment 100.0 Cost (% of claim)* 18.80 Attorney cost (% of claim) 12.0 Court cost (% of claim) 5.4 Enforcement Cost (% of claim) 1.4 65 Court information: Istanbul Commercial Court of ("Ticaret Mahkemesi") First Instance * Claim assumed to be equivalent to 200% of income per capita. 66 67 1. Benchmarking Closing Business Regulations: Turkey is ranked 115 overall for Closing a Business. Ranking of Turkey in Closing Business - Compared to good practice and selected economies: 68 The following table shows Closing Business data for Turkey compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Turkey 21.1 3.3 15 Comparator Economies Azerbaijan 28.8 2.7 8 Bulgaria 31.0 3.3 9 Georgia 25.1 3.3 4 Romania 25.7 3.3 11 Russian Federation 25.3 3.8 9 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 69 2. Historical data: Closing Business in Turkey Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 119 115 Time (years) 3.3 3.3 3.3 3.3 Cost (% of estate) 15 15 15 15 Recovery rate (cents on the dollar) 20.3 20.2 20.2 21.1 3. The following graphs illustrate the Closing Business sub indicators in Turkey over the past 4 years: 70 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 71 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Azerbaijan Azerbaijan improved access to credit by establishing an online platform allowing financial institutions to provide information to, and retrieve it from, the public credit registry. A revision of Azerbaijan's tax code lowered several tax rates, including the profit tax rate, and simplified the process of paying corporate income tax and value added tax. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Bulgaria Bulgaria eased business start-up by reducing the minimum capital requirement from 5,000 leva ($3,250) to 2 leva ($1.30). Bulgaria reduced employer contribution rates for social security. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Georgia Georgia improved access to credit by implementing a central collateral registry with an electronic database accessible online. Georgia strengthened investor protections by allowing greater access to corporate information during the trial. Georgia made the enforcement of contracts easier by streamlining the procedures for public auctions, introducing private enforcement officers and modernizing its dispute resolution system. Georgia improved insolvency proceedings by streamlining the regulation of auction sales. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Romania Romania amended regulations related to construction permitting to reduce fees and expedite the process. Romania introduced tax changes, including a new minimum tax on profit, that made paying taxes more costly for companies. Substantial amendments to Romania's bankruptcy laws--introducing, among other things, a procedure for out-of-court workouts--made dealing with insolvency easier. Russian Federation Russia eased construction permitting by implementing a single window for all procedures related to land use. Russia introduced a series of legislative measures in 2009 to improve creditor rights and the insolvency system. 72 Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 73 74