Doing Business 2018 Turkey Economy Pro le of Turkey Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Turkey Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Turkey Income Category Upper middle income 60 Population 79,512,426 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 11,180 0 100 69.14 City Covered Istanbul DB 2018 Distance to Frontier (DTF) 0 100 72.87: Romania (Rank: 45) 71.91: Bulgaria (Rank: 50) 71.33: Regional Average (Europe & Central Asia) 69.14: Turkey (Rank: 60) 63.58: Tunisia (Rank: 88) Page 3   60.76: India (Rank: 100) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Turkey Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Turkey Income Category Upper middle income 60 Population 79,512,426 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 11,180 0 100 69.14 City Covered Istanbul DB 2018 Distance to Frontier (DTF) 0 100 72.87: Romania (Rank: 45) 71.91: Bulgaria (Rank: 50) 71.33: Regional Average (Europe & Central Asia) 69.14: Turkey (Rank: 60) 63.58: Tunisia (Rank: 88) 60.76: India (Rank: 100) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Turkey 1 20 30 28 46 55 55 71 80 77 82 88 96 Rank 109 139 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Turkey 100 87.59 81.02 79.71 80 74.67 71.67 72.40 67.26 68.87 60 55.00 DTF 40 33.26 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.44 Change:+1.67 Change:+10.00 Investors Change:+0.04 Borders Change:0.00 Change:-1.72 Change:+0.76 Permits Change:0.00 Change:0.00 Change:+0.43 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.44 Change:+1.67 Change:+10.00 Investors Change:+0.04 Borders Change:0.00 Change:-1.72 Change:+0.76 Permits Change:0.00 Change:0.00 Doing Business 2018 Turkey Change:+0.43 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Turkey Standardized Company Legal form Limited Sirket (LS) Paid-in minimum capital requirement TRY 2,500 City Covered Istanbul Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Procedure – Men (number) 7 5.2 4.9 1.00 (New Zealand) Time – Men (days) 6.5 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 12.8 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 7 5.2 4.9 1.00 (New Zealand) Time – Women (days) 6.5 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 12.8 4.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 7.8 3.4 8.7 0.00 (113 Economies) Figure – Starting a Business in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.62: Regional Average (Europe & Central Asia) 89.67: Romania (Rank: 64) 87.59: Turkey (Rank: 80) 85.37: Bulgaria (Rank: 95) 85.02: Tunisia (Rank: 100) 75.40: India (Rank: 156) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Turkey – Procedure, Time and Cost Time Cost 8 6 7 ost (% of income per capita) 5 6 4 5 Time (days) 4 3 3 2 Page 6   2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Turkey Figure – Starting a Business in Turkey – Procedure, Time and Cost Time Cost 8 6 7 Cost (% of income per capita) 5 6 4 5 Time (days) 4 3 3 2 2 1 1 0 0 1 2 3 4 5 *6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit the memorandum and articles of association online at MERSIS Less than one day no charge and obtain a potential TIN (online procedure) Agency : MERSIS According to the Article 13 of the Regulation of Trade Registry published on the O cial Gazette dated 27 January 2013 and numbered 28541, trade registration transactions shall be ful lled through MERSİS (Central Registration Recording System). As of February 29, 2016 potential tax identi cation number can be obtained online though the MERSİS system. At the time the AoA are uploaded online via MERSIS, the system automatically gives the company a potential TIN. 2 Execute and notarize company documents 1 day Notarization of the Agency : Notary Articles of Association (for 10 According to Article 586 of the Turkish Commercial Code numbered 6102 pages): TL 1,400 and Article 90 of the Trade Registry Regulation, the following documents are Notarization of the required for the application of registration: signature - Notarized articles of association (4 copies and 1 original). declaration of the - Notarized signature declarations (2 copies). manager: TL 65 per - Notarized copy of acceptance letters of the managers (who are not shareholders), (1 copy). manager - Notarized copy of a power of attorney authorizing the attorneys who will follow-up the application before the competent Trade Registry and other o cial authorities in order to proceed with the application (where applicable). Page 7   - Notarized copy of the identity cards of the managers and shareholders (1 (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Turkey Details – Starting a Business in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit the memorandum and articles of association online at MERSIS Less than one day no charge and obtain a potential TIN (online procedure) Agency : MERSIS According to the Article 13 of the Regulation of Trade Registry published on the O cial Gazette dated 27 January 2013 and numbered 28541, trade registration transactions shall be ful lled through MERSİS (Central Registration Recording System). As of February 29, 2016 potential tax identi cation number can be obtained online though the MERSİS system. At the time the AoA are uploaded online via MERSIS, the system automatically gives the company a potential TIN. 2 Execute and notarize company documents 1 day Notarization of the Agency : Notary Articles of Association (for 10 According to Article 586 of the Turkish Commercial Code numbered 6102 pages): TL 1,400 and Article 90 of the Trade Registry Regulation, the following documents are Notarization of the required for the application of registration: signature - Notarized articles of association (4 copies and 1 original). declaration of the - Notarized signature declarations (2 copies). manager: TL 65 per - Notarized copy of acceptance letters of the managers (who are not shareholders), (1 copy). manager - Notarized copy of a power of attorney authorizing the attorneys who will follow-up the application before the competent Trade Registry and other o cial authorities in order to proceed with the application (where applicable). - Notarized copy of the identity cards of the managers and shareholders (1 copy). The incorporation documents are exempt from the stamp tax and valuable paper fee: there are no fees to be paid for the articles of association and the signature declarations. However, fees are still applicable for notary services and for the valuable papers. The Law Amending Certain Laws For Improvement of the Investment Environment numbered 6728 stipulates that the Articles of Association shall be valid by notarizing or being signed before the trade registry director. However, an assignment letter has not been yet delivered to the Trade Registries from the Ministry of Customs and Trade. As a result, it is not yet possible to certify the documents at the Trade Registry O ces in practice. 3 Deposit a percentage of capital to the account of the Competition 1 day 0.04% of capital Authority Agency : Halk Bankası (Ankara corporate branch) To register with the Commercial Registry, founders must obtain the original receipt from Halk Bankas. This receipt shows that 0.04% (four per ten thousand) of the company’s capital has been paid to the Competition Authority at the Halk Bankası Ankara Corporate Branch. 4 Deposit at least 25% of the startup capital in a bank and Obtain proof 1 day no charge thereof Page 8   Agency : Bank Authority at the Halk Bankası Ankara Corporate Branch. Doing Business 2018 Turkey 4 Deposit at least 25% of the startup capital in a bank and Obtain proof 1 day no charge thereof Agency : Bank According to Articles 585 and 344 of the new Turkish Commercial Code, 25% of the share capital must be paid in prior to the new company registration. The remaining 75% of the subscribed share capital must be paid within 2 years. Alternatively, the capital can be fully paid prior to registration. The articles of association and potential tax number of the company to be incorporated should be submitted to the bank in hard copy. 5 Apply for registration at the Trade Registry O ce 2 days see procedure Agency : Trade Registry O ce details The formation of a limited liability company does not require a court application. Thus, upon gathering the following documents, founders may apply for registration: - Petition requesting registration - 3 copies of an incorporation noti cation form (kurulus bildirim formu). - 2 copies of the notarized articles of association plus 1 original. - Bank deposit receipt with respect to the payment made to the bank account of the Competition Authority (0.04% of the company's share capital). - An undertaking (taahhutname) signed by the authorized company representatives. Signature declaration of the directors. - For each person authorized to represent the founders of the limited liability company, 2 copies of the signature declarations. - Bank certi cate of the paid-in minimum capital deposit (at least 25% of the subscribed capital). - Chamber of Commerce registration form. - 1 passport-sized photo of each founder. - Acceptance declaration of the managers who are not shareholders (1 notarized copy). Following the completion of the registration phase before the Commercial Registry, the Commercial Registry noti es the relevant tax o ce and the Social Security Administration ex-o cio regarding the incorporation of the company. The Commercial Registry arranges for an announcement in the Commercial Registry Gazette within approximately 10 days as of the company registration. A tax registration certi cate must be obtained from the local tax o ce soon after the Commercial Registry O ce noti es the local tax o ce. A social security number for the company must be obtained from the relevant Social Security Administration. For the employees, a separate application has to be made following the registration of the company with the Social Security Administration. According to the o cial fees of 2017 published in the O cial Gazette No. 29931 published on 27 December 2016, the fees applicable upon the incorporation of a limited liability company are set as of January 1, 2017 as follows: - The registration fee for a limited liability company: TL 800 - Publication of articles of association: TL 0.34 per word - Start up notice: TL 71.50 - Trade Registry Gazette fee: TL 2.5 - Registration fee for manager's signature: Page 9   (a) First manager's signature: TL 570 - Publication of articles of association: TL 0.34 per word - Start up notice: TL 71.50 Doing -Business 2018 Trade Registry Turkey Gazette fee: TL 2.5 - Registration fee for manager's signature: (a) First manager's signature: TL 570 (b) Each additional manager's signature: TL 367.50 Fee schedule for registration and annual membership in the Istanbul Chamber of Commerce (based on capital; levied only once in the rst year of registration): - TL 1 -1.000 : TL 190 - TL 1.001 - 25.000 : TL 205 - TL 25.001 - 250.000 : TL 235 - TL 250.001 - 1.000.000 : TL 310 - TL 1.000.001 - more : TL 375 6 Certify the legal books by a Notary Public 1 day see procedure Agency : Notary (simultaneous with details previous The founders must certify the legal books (6 documents: share ledger, procedure) manager's meeting minutes book, general assembly meeting minutes book, journal, general ledger and inventory book) the day they register the company with the trade registry. The notary public must notify the Tax O ce about the commercial book certi cation. General Communique of the o cial fees no.77 was published in October 4, 2016 in the O cial Gazette No. 29847, which stated a privilege for the incorporation of limited liability companies. As of August 9, 2016, there is no longer a fee for the registration of the statuary books for the companies in establishment phase. However, the following notary fees are applicable: Fees include: - TRY144 (6 books), i.e.: (1) Yevmiye defteri (100 sheets): TRY 25 (2) Defter-i Kebir (100 sheets) TRY 25 (3) Envanter Defteri (100 sheets) : TRY 25 (4) Ortaklar Pay Defteri (100 sheets) TRY 25 (5) Karar Defteri(Board Resolution Book) (78 sheets): TRY 22 (6) Genel Kurul Toplantı ve Müzakere Defteri (General Assembly of Partners' Resolution Book) (78 sheets): TRY 22 7 Follow up with the tax o ce on the Commercial Registry’s company 1 day no charge establishment noti cation Agency : Tax O ce The Trade Registry O ce noti es the Tax O ce and the Social Security Administration of the company’s incorporation. In practice, to expedite the registration process, company representatives follow up on whether the noti cation has been received. A tax o cer comes to the company headquarters to prepare a determination report. There must be at least one authorized signature in the determination report. Trade Registry O cers send company establishment form which includes tax number noti cation to Tax O ce. With the amendment made in the second paragraph of Article 153 of the Tax Procedures Code No. 213, the noti cation of establishment of the company may also be transmitted to relevant tax o ce electronically via MERSIS. However, this is not yet widely used by the companies. Applies to women only. Takes place simultaneously with previous procedure. Page 10   However, this is not yet widely used by the companies. Doing to women2018 Business Applies only. Turkey Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures. Building quality control index (0-15) - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 11   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Turkey Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures. Building quality control index (0-15) - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 12   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Turkey Standardized Warehouse Estimated value of warehouse TRY 1,612,164.10 City Covered Istanbul Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Procedures (number) 18 16.0 12.5 7.00 (Denmark) Time (days) 103 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 4.0 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 9.5 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.35: Bulgaria (Rank: 51) 68.09: Regional Average (Europe & Central Asia) 67.49: Tunisia (Rank: 95) 67.26: Turkey (Rank: 96) 58.13: Romania (Rank: 150) 38.80: India (Rank: 181) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Turkey – Procedure, Time and Cost Time Cost 1.8 100 1.6 Cost (% of warehouse value) 80 1.4 1.2 Time (days) 60 1 0.8 40 0.6 0.4 20 0.2 0 0 1 2 3 *4 *5 *6 *7 8 9 10 11 12 13 14 * 15 * 16 * 17 18 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 13   component indicators. Doing Business 2018 Turkey Figure – Dealing with Construction Permits in Turkey – Procedure, Time and Cost Time Cost 1.8 100 1.6 Cost (% of warehouse value) 80 1.4 1.2 Time (days) 60 1 0.8 40 0.6 0.4 20 0.2 0 0 1 2 3 *4 *5 *6 *7 8 9 10 11 12 13 14 * 15 * 16 * 17 18 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Turkey and comparator economies – Measure of Quality 14 13.0 13.0 12 11.5 11.0 11.4 10 9.5 Index score 8 6 4 2 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Dealing with Construction Permits in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain zoning plan (Imar Durumu) 4 days TRY 200 Agency : Zoning and Planning Department BuildCo applies to the District Municipality - Planning Department for a 1:1000 scaled zoning plan which is already prepared and approved by the greater municipality. The plan shows the construction conditions of land such as the gross oor area ratio, footprint area ratio, and the function (e.g. commercial, residential, o ce, etc.) 2 Obtain cadastral plan (Aplikasyon Krokisi) 3 days TRY 418 Agency : Authorized o ces (“LİKHAB”) BuildCo submits an application to the Cadastral Plan Branch of the relevant Page 14   Turkey Bulgaria India Romania Tunisia Europe & Central Asia Doing Business 2018 Turkey Details – Dealing with Construction Permits in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain zoning plan (Imar Durumu) 4 days TRY 200 Agency : Zoning and Planning Department BuildCo applies to the District Municipality - Planning Department for a 1:1000 scaled zoning plan which is already prepared and approved by the greater municipality. The plan shows the construction conditions of land such as the gross oor area ratio, footprint area ratio, and the function (e.g. commercial, residential, o ce, etc.) 2 Obtain cadastral plan (Aplikasyon Krokisi) 3 days TRY 418 Agency : Authorized o ces (“LİKHAB”) BuildCo submits an application to the Cadastral Plan Branch of the relevant municipality, along with the lot plan, and obtains the Cadastral Plan Document. The cadastral plan states the corner coordinations of the plot, the status of adjacent plots, and the surface area of the plot. The fee schedule based on the land area: 1 - 1.000 m2 : 143 TL 1.001 - 3.000 m2: 215 TL 3.001 - 5.000 m2: 430,25 TL 5.001-10.000 m2: 573,00 TL 10.001 - 20.000 m2: 788,25 TL 20.001 - 50.000 m2: 1.029,00 TL 50.001 - 100.000 m2: 1.251,00 TL 100.001 - 200.000 m2: 1.433,50 TL 200.001 - 500.000 m2: 1.719,50 TL In this case, 143,00 TRY will be charged by District Cadastral O ce. 3 Obtain construction direction plan (Insaat Istikamet Rolevesi) and 5 days TRY 620 elevation of cross section (Kot Kesit Belgesi) Agency : The planning and zoning department of district municipality BuildCo must apply for a construction direction plan and elevation of cross section at the planning and zoning department of district municipality which is in charge to provide the construction direction plan, as well as the elevation of cross section plans. The documents obtained in the previous procedures must be submitted at this time. The technicians set all the necessary levels -- road, entrance, plot, building corners, etc. -- to be the basis for the design process of the works that will follow, and issue a construction direction plan and elevation of cross section. The construction direction plan includes stated directions on the land, distances from neighboring plots, and the building corners. The elevation of cross section identi es stated elevations of the corners of the plot, the necessary levels and elevations of the current land and elevations of the road. 4 Hire an independent building inspector 4 days TRY 24,989 Agency : Private Building Inspection Agency 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 Page 15   and elevations of the current land and elevations of the road. Doing Business 2018 Turkey 4 Hire an independent building inspector 4 days TRY 24,989 Agency : Private Building Inspection Agency 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 re 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 representing a percentage of the total cost of construction, according to the amendment of Article 5 of the Law on Building Inspection No. 4708 of August 17, 2011. This fee is paid in six installments. The inspector receives the following payments at the following stages: • 20% when the building permit is obtained • 40% when the foundation is completed • 20% when the shell & core structure is initiated • 15% when the installation is initiated • 5% when the construction is completed 5 Obtain approval of architectural drawings from the municipality 30 days TRY 1,459 Agency : District Municipality 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 • Rati ed geological study • Three sets of the elevator preliminary report (not applicable in the warehouse case) The municipality must approve the project’s proposed designs. The re 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 re ected in the engineering and landscaping projects as well. For nal approval, these Page 16   project plans are submitted to the municipal project branch, for static, • 15% when the installation is initiated 5% when the Doing •Business construction 2018 Turkey is completed 5 Obtain approval of architectural drawings from the municipality 30 days TRY 1,459 Agency : District Municipality 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 • Rati ed geological study • Three sets of the elevator preliminary report (not applicable in the warehouse case) The municipality must approve the project’s proposed designs. The re 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 re ected in the engineering and landscaping projects as well. For nal 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 re-mechanical project plans must be approved by the Fire Department. The cost estimated for this procedure ranges from TRY 3,000.00 to TRY 3,500.00. 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). 6 Obtain proof of payment and clearance of water and sewerage 7 days TRY 5,973 infrastructure Agency : Water and Sewerage Department (Istanbul Municipality) BuildCo will contact the Istanbul Water Supply and Sewerage General Directorate (ISKI) to obtain permission to discharge sewage and rainwater. At the same time, BuildCo must pay all outstanding debts to ISKI arising from the existing utility subscriptions and obtain a clearance letter stating that all existing connections/subscriptions are terminated. There is also a participation share in the cost the cost of the water and sewerage infrastructure. A clearance document is obtained, that shows that complete payment was made. Once this clearance is obtained, then BuildCo can move forward in laying out all pipes and excavation for sewage. All this work is done directly by the plumber of BuildCo; therefore there is no need for ISKI to be involved a second time. However, ISKI will inspect the work after it has been completed. 7 Register with Social Security Institute before the commencement of 1 day no charge construction works Agency : Social Security Institution Page 17   The company must register the sta that will be working at the construction plumber of BuildCo; therefore there is no need for ISKI to be involved a Doing second time. Business However, 2018 ISKI will inspect the work after it has been completed. Turkey 7 Register with Social Security Institute before the commencement of 1 day no charge construction works Agency : Social Security Institution The company must register the sta that will be working at the construction site with the Social Security Institution. Under Turkish law, the construction site is considered as a “separate and independent workplace” where construction workers are employed to perform the permanent and temporary works forming the project/building. Consequently, this “separate workplace” must be registered with SSI and a workplace opening and operating permit must be obtained from the Ministry of Labour and Social Security. 8 Obtain building permit 30 days TRY 19,041 Agency : District Municipality, Licensing Branch The company requests a building permit from the licensing branch of the municipality. The approved design, engineering drawings, and other necessary documents (described in the previous procedures) must be attached to this request. The company must pay the fees before receiving the building permit and starting foundation work. For a warehouse, the o cial fee schedule is TRY 4.07 per sqm. Building permits are usually issued 1 -- 2 months after submission of the application. Following the building permit issuance, the municipal building control authority will randomly conduct inspections during the construction on site, in addition to private inspection. 9 Obtain excavation (Har yat) permit from the Department of 1 day TRY 1,609 Environment of the Municipality Agency : Department of Environment of the Municipality After applying for the construction permit, BuildCo must obtain an excavation permit and inform the Department of Environment about how it will dispose of the extra soil from the area of excavation for the foundation, water, electricity etc. and get an approval from the department. The fee is listed on the web page of the municipality. 10 Obtain proof of "no outstanding taxes" clearance certi cate from the 1 day no charge Tax Authority Agency : Tax Department 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. 11 Request and obtain a “no outstanding social security premium” 1 day no charge clearance upon completion of construction works Agency : Social Security Institute As far as construction works are concerned, once they are completed, the site (i.e., the workplace) will be closed. Upon completion date, there must not be any outstanding social security premium debt arising from the employment of the construction workers on site. Therefore, the contractor must obtain a document from the Social Security Institute evidencing that there is no outstanding social security debt. The local Municipality also requires this certi cate before issuing the occupancy permit. Page 18   from the appropriate tax departments. This document states that all taxes Doing owed have been Business 2018paid. Turkey 11 Request and obtain a “no outstanding social security premium” 1 day no charge clearance upon completion of construction works Agency : Social Security Institute As far as construction works are concerned, once they are completed, the site (i.e., the workplace) will be closed. Upon completion date, there must not be any outstanding social security premium debt arising from the employment of the construction workers on site. Therefore, the contractor must obtain a document from the Social Security Institute evidencing that there is no outstanding social security debt. The local Municipality also requires this certi cate before issuing the occupancy permit. 12 Receive nal inspection from the Fire Department 1 day TRY 3,811 Agency : Fire Department, Istanbul Municipality According to the 2014 Fire Service Fees Schedule, BuildCo's warehouse would now fall into group 5 (factory buildings, hospitals, hotels, warehouses). 13 Submit nal inspection report and receive nal inspection from the 5 days no charge municipality Agency : District Municipality Upon completion of construction, the private inspector must submit his nal inspection report to the municipality before the municipality conducts its nal inspection. The municipality will come to inspect the building after 5 days on average. 14 Obtain occupancy permit 15 days no charge Agency : District Municipality 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 veri es that it complies with the project. This commission then issues the occupancy permit. The law speci es 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. Change the title deed from a land title deed to a building title deed 10 days TRY 345 15 Agency : Title Deed Department 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 Page 19   • The occupancy permit limit is not frequently observed, and so, this process can take on average 2 Doing months. Business 2018 Turkey Change the title deed from a land title deed to a building title deed 10 days TRY 345 15 Agency : Title Deed Department 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 • 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. The fee is based on the area of the immovable property: 1-1000 sq.m : 235 TRY 1000 - 3000 sq.m : 332,50 TRY 3000 sq.m and up : 32,5 TRY will be added to 332,50 for each 1000 sq.m Obtain operation permit from the Municipality 15 days TRY 6,139 16 Agency : District Municipality By law (Article 2 of the Operation Permit Regulation), BuildCo must obtain an operating permit from the Municipality before using this warehouse as a storage facility. Receive inspection from the water and sewerage department 1 day no charge 17 Agency : Istanbul Water Supply and Sewerage General Directorate (ISKI) Upon request of permission from the water and sewage 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 technicians from the same department also check that the canal connections comply with the approved design, upon request for a water connection. The technicians then issue a letter of approval for connection. 18 Obtain water and sewage connection 8 days TRY 250 Agency : Istanbul Water Supply and Sewerage General Directorate (ISKI) Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Turkey – Measure of Quality Answer Score Building quality control index (0-15) 9.5 Quality of building regulations index (0-2) 1.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 0.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid. Page 20   Takes place simultaneously with previous procedure. Doing Business 2018 Turkey Details – Dealing with Construction Permits in Turkey – Measure of Quality Answer Score Building quality control index (0-15) 9.5 Quality of building regulations index (0-2) 1.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 0.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) external engineer or rm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, external engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.5 Which parties (if any) are held liable by law for structural aws or problems in the Construction 0.5 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Page 21   Liability Insurance or Decennial Insurance)? (0-1) to obtain Which parties (if any) are held liable by law for structural aws or problems in the Construction 0.5 building Doing once it is Business in use (Latent 2018 Turkey Defect Liability or Decennial Liability)? (0-1) company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 2.0 What are the quali cation requirements for the professional responsible for verifying University 1.0 that the architectural plans or drawings are in compliance with existing building degree in regulations? (0-2) architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the University 1.0 construction on the ground? (0-2) degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). Page 22   follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or architect or engineer. Doing Business 2018 Turkey Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 23   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Turkey Standardized Connection Price of electricity (US cents per kWh) 12.1 Name of utility CLK Boğaziçi Elektrik Perakende Satış A.Ş. City Covered Istanbul Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Procedures (number) 4 5.4 4.7 2 (United Arab Emirates) Time (days) 55 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 457.7 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 5 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.21: India (Rank: 29) 82.28: Tunisia (Rank: 48) 81.02: Turkey (Rank: 55) 70.35: Regional Average (Europe & Central Asia) 54.80: Bulgaria (Rank: 141) 53.34: Romania (Rank: 147) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Turkey – Procedure, Time and Cost Time Cost 450 50 400 Cost (% of income per capita) 350 40 300 Time (days) 30 250 200 20 150 100 10 Page 24   50 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Turkey Figure – Getting Electricity in Turkey – Procedure, Time and Cost Time Cost 450 50 400 Cost (% of income per capita) 350 40 300 Time (days) 30 250 200 20 150 100 10 50 0 0 1 2 *3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Turkey and comparator economies – Measure of Quality 8 7 7 7 6 6 6 5.3 5 Index score 5 4 3 2 1 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Getting Electricity in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Hire electrical engineer, apply for connection, await estimate and sign 30 calendar days TRY 5,387.85 connection agreement Agency : CLK Boğaziçi Elektrik Perakende Satış A.Ş. The customer hires one or many electrical engineers registered with the Chamber of Electrical Engineers (EMO) or an engineering company (with an engineer on the payroll who is registered with the Chamber of Electrical Engineers). The Engineer prepares the electrical project based on the facility’s architectural project. Part of the electricity project, the engineer prepares a connection scheme (for both internal and external installations). For Page 25   connection applications, this project is obligatory. The engineer will be in Turkey Bulgaria India Romania Tunisia Europe & Central Asia Doing Business 2018 Turkey Details – Getting Electricity in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Hire electrical engineer, apply for connection, await estimate and sign 30 calendar days TRY 5,387.85 connection agreement Agency : CLK Boğaziçi Elektrik Perakende Satış A.Ş. The customer hires one or many electrical engineers registered with the Chamber of Electrical Engineers (EMO) or an engineering company (with an engineer on the payroll who is registered with the Chamber of Electrical Engineers). The Engineer prepares the electrical project based on the facility’s architectural project. Part of the electricity project, the engineer prepares a connection scheme (for both internal and external installations). For connection applications, this project is obligatory. The engineer will be in charge of the external works, and most of the time also carries out the internal installation. CLK Boğaziçi Elektrik Perakende Satış A.Ş. will check the network to see if at the point of connection a transformer is needed. If so, the client is required to install a transformer. Along with the application, the engineer submits the electricity project. The client submits the following in addition to the electricity project to the utility: • Letter of application • Copy of ID card of Company Representative • Company seal • Rental contract / ownership documentation (land deed, certi cate of occupancy) • Technical Production Form (Description of the business) • Consent License ( from shareholders for the tenants ) • Trade Registry Gazette • Tax Registration Certi cate • List of authorized signatories • Letter of authorization from public notary for the people managing the process, but not listed in the company's list of authorized signatories • Requested capacity • Invoice of payment of connection fees The application for connection is evaluated by BEDAŞ, taking into consideration the requirements for expansion investment or new investment within the framework of the existing circumstances of the distribution system. CLK Boğaziçi Elektrik Perakende Satış A.Ş. inspects the site accordingly: • If the existing circumstances of the distribution system are suitable for connection, the connection scheme is approved and a connection agreement is signed between the utility and the client upon submission of required documents; • If the existing circumstances of the distribution system are not suitable for connection (as in our case where a substation is needed), the client is advised about a reasonable period to complete the connection. Page 26   Doing Business 2018 No. Procedure Turkey Time to Complete Associated Costs 1 Hire electrical engineer, apply for connection, await estimate and sign 30 calendar days TRY 5,387.85 connection agreement Agency : CLK Boğaziçi Elektrik Perakende Satış A.Ş. The customer hires one or many electrical engineers registered with the Chamber of Electrical Engineers (EMO) or an engineering company (with an engineer on the payroll who is registered with the Chamber of Electrical Engineers). The Engineer prepares the electrical project based on the facility’s architectural project. Part of the electricity project, the engineer prepares a connection scheme (for both internal and external installations). For connection applications, this project is obligatory. The engineer will be in charge of the external works, and most of the time also carries out the internal installation. CLK Boğaziçi Elektrik Perakende Satış A.Ş. will check the network to see if at the point of connection a transformer is needed. If so, the client is required to install a transformer. Along with the application, the engineer submits the electricity project. The client submits the following in addition to the electricity project to the utility: • Letter of application • Copy of ID card of Company Representative • Company seal • Rental contract / ownership documentation (land deed, certi cate of occupancy) • Technical Production Form (Description of the business) • Consent License ( from shareholders for the tenants ) • Trade Registry Gazette • Tax Registration Certi cate • List of authorized signatories • Letter of authorization from public notary for the people managing the process, but not listed in the company's list of authorized signatories • Requested capacity • Invoice of payment of connection fees The application for connection is evaluated by BEDAŞ, taking into consideration the requirements for expansion investment or new investment within the framework of the existing circumstances of the distribution system. CLK Boğaziçi Elektrik Perakende Satış A.Ş. inspects the site accordingly: • If the existing circumstances of the distribution system are suitable for connection, the connection scheme is approved and a connection agreement is signed between the utility and the client upon submission of required documents; • If the existing circumstances of the distribution system are not suitable for connection (as in our case where a substation is needed), the client is advised about a reasonable period to complete the connection. 2 Obtain external works from private rm or registered electrical engineer 18 calendar days TRY 136,945.84 Agency : Private rm/Electrical engineer(s) In the assumed area connections are generally made underground. Page 27   connection (as in our case where a substation is needed), the client is Doing advised about Business a reasonable 2018 Turkey period to complete the connection. 2 Obtain external works from private rm or registered electrical engineer 18 calendar days TRY 136,945.84 Agency : Private rm/Electrical engineer(s) In the assumed area connections are generally made underground. Physical implementation of both internal and external wiring is outsourced to the same Engineer or any other similar Engineers. The external works consist of the construction of private substation and underground connection to a central substation. The Engineer(s) will need to purchase the material for the external connection. 3 Obtain excavation permit from municipality 8 calendar days TRY 1,000 Agency : Istanbul Municipality/ Zeytinburnu Municipality (depending on whether land is on main arterial road or not) The customer needs to obtain an excavation permit from Istanbul Municipality in order to carry out the works. The permit can be applied for after the electricity project has been approved. The customer needs to submit the approved electricity project, the occupancy permit, and state their address (no o cial document is needed). 4 Submit Electricity Structural Project and await meter installation and 7 calendar days TRY 4,240.31 nal connection Agency : CLK Boğaziçi Elektrik Perakende Satış A.Ş. Following the wiring and completion of implementation, the client is required to submit a post-implementation electricity project called “Electricity Structural Project.” This is followed by CLK Boğaziçi Elektrik Perakende Satış A.Ş. inspection of the internal wiring. Connection is made by the utility following its checking of the wiring (no inspection of entire internal wiring is done during the process, just of the interface). The compatibility of the metering devices and the circuits of the client are tested, and the relevant parts of the meters and measurement circuits are sealed and rst index read on the meter. Connection to the system is then recorded by the distribution licensee. Takes place simultaneously with previous procedure. Details – Getting Electricity in Turkey – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 16.4 System average interruption frequency index (SAIFI) 8.6 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Page 28   Takes place simultaneously with previous procedure. Doing Business 2018 Turkey Details – Getting Electricity in Turkey – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 16.4 System average interruption frequency index (SAIFI) 8.6 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://lisans.epdk.or g.tr/epvys- tarife/faces/pages/ta rife.xhtml http://enerjienstitus u.com/elektrik- yatlari/ Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of Page 29   infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Turkey Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value TRY 1,612,164.10 City Covered Istanbul Page 30   Europe & OECD high Doing Business 2018 Turkey Standard Property Transfer Property value TRY 1,612,164.10 City Covered Istanbul Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Procedures (number) 7 5.3 4.6 1.00 (4 Economies) Time (days) 7 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 3.0 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 21.5 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.02: Regional Average (Europe & Central Asia) 74.70: Romania (Rank: 45) 74.67: Turkey (Rank: 46) 69.30: Bulgaria (Rank: 67) 63.21: Tunisia (Rank: 93) 47.08: India (Rank: 154) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Turkey – Procedure, Time and Cost Time Cost 7 3.5 6 3 5 2.5 Cost (% of property v Time (days) 4 2 3 1.5 2 1 Page 31   registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Turkey Figure – Registering Property in Turkey – Procedure, Time and Cost Time Cost 7 3.5 6 3 5 2.5 Cos (% of property v Time (days) 4 2 3 1.5 Cost 2 1 1 0.5 0 0 1 2 3 4 5 6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Turkey and comparator economies – Measure of Quality 25 21.5 19.0 19.8 20 17.0 Index score 15 11.0 10 8.2 5 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Registering Property in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The buyer conducts a non-encumbrance check on the property 1 day no cost Agency : Land Registry o ce Although not mandated by law, non-encumbrance checks are essential procedures. Without them, 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, title deeds are open to anyone who legitimizes their interest. However, in practice the records are not accessible to the 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 Page 32   by the buyer. For transactions that are undertaken by lawyers, this Turkey Bulgaria India Romania Tunisia Europe & Central Asia Doing Business 2018 Turkey Details – Registering Property in Turkey – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The buyer conducts a non-encumbrance check on the property 1 day no cost Agency : Land Registry o ce Although not mandated by law, non-encumbrance checks are essential procedures. Without them, 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, title deeds are open to anyone who legitimizes their interest. However, in practice the records are not accessible to the 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 conducted by lawyers (who have the power of attorney from the seller and have a legal right to search titles). The seller or the interested party takes an appointment on the general IT (TAKBIS) system to be present at the Land Registry o ce at the given time. The information at the Land Registry is computerized; so the search takes minutes. Conducting a non-encumbrance check is free of charge for the real person owner or for those who hold a right on the relevant property (or their representatives). The check can be conducted online via e-government passwords. However, e-government passwords are granted to individuals only and this procedure cannot be conducted online by the representatives of a company. Thus, representatives are required to visit the Land Registry O ce for a non-encumbrance check. If the buyer or seller wish to obtain a copy of the records displaying the status of the property, a fee applies (TL 8.20 per page + a xed fee of TL 18.25 that only applies if it is not the owner of the property who is requesting a copy of the records). If the application is made in a land registry o ce other than the land registry o ce which the property is registered at, then the applicant is required to pay an additional xed fee of TL 36.50. 2 Managers obtain an authorization certi cate of their authority to 1 day TL 38.5 conduct transactions on companies’ behalf Agency : Company Registrar 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 the land registry o ce on their companies’ behalf. According to the General Communiqué of Act of Fees No. 78, the cost for obtaining an authorization certi cate for company managers is TL 38.50. However, the registration and announcement of the authorization of a company's manager in the Trade Registry Gazette costs TL 367.50. If the sale transaction will be conduct by a proxy issued by the company signatories, the representatives should be provided with special proxies, which will be drawn by the notary and bear the photograph and the statement of the authorized manager. The notary would require the manager to provide it with the above mentioned authorization document which should be obtained from the trade registry and the signature circular of the company setting out the authorized signatories of the company and the way in which they are authorized to represent the company. The notary will charge a fee of approximately TL 200 for issuing the power of attorney. The validity period of this authorization certi cate is one year as of Page 33   than the land registry o ce which the property is registered at, then the Doing applicant Business 2018 to is required pay an additional xed fee of TL 36.50. Turkey 2 Managers obtain an authorization certi cate of their authority to 1 day TL 38.5 conduct transactions on companies’ behalf Agency : Company Registrar 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 the land registry o ce on their companies’ behalf. According to the General Communiqué of Act of Fees No. 78, the cost for obtaining an authorization certi cate for company managers is TL 38.50. However, the registration and announcement of the authorization of a company's manager in the Trade Registry Gazette costs TL 367.50. If the sale transaction will be conduct by a proxy issued by the company signatories, the representatives should be provided with special proxies, which will be drawn by the notary and bear the photograph and the statement of the authorized manager. The notary would require the manager to provide it with the above mentioned authorization document which should be obtained from the trade registry and the signature circular of the company setting out the authorized signatories of the company and the way in which they are authorized to represent the company. The notary will charge a fee of approximately TL 200 for issuing the power of attorney. The validity period of this authorization certi cate is one year as of its date of receipt. 3 Obtain an earthquake insurance policy, or amend the existing one 1 day no cost (unless a Agency : Insurance Company new insurance is needed) In practice, it is usually required to obtain an earthquake insurance policy (if it has not been already issued for the building) when selling the building or asking for a loan on it. Even though commercial properties are excluded from the scope of the compulsory earthquake insurance policy, it is generally recommended to obtain one before transferring the property. 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. While it is possible to conduct online insurance transactions with insurance companies this is not an established practice in Istanbul. In practice, it is still common to obtain or amend this insurance policy physically at the o ces of the insurance company. 4 Obtain the real estate value statement from the Municipality 1 day no cost Agency : Municipality The parties need to obtain a document showing the current value of the property from the local municipality. This value statement is used by the land registry o cer to determine the mortar dues. The parties could obtain this document either from o ces of the relevant municipality or online. The online service can be accessed through www.turkiye.gov.tr, this service is free of charge. However, obtaining this document online is still not a common practice in Istanbul. Therefore, the seller obtains the value statement in person from the municipality where the real estate is situated. The municipalities update these value statements every year by categorizing Page 34   properties according to their location and features. common to obtain or amend this insurance policy physically at the o ces of Doing the insurance Business company. 2018 Turkey 4 Obtain the real estate value statement from the Municipality 1 day no cost Agency : Municipality The parties need to obtain a document showing the current value of the property from the local municipality. This value statement is used by the land registry o cer to determine the mortar dues. The parties could obtain this document either from o ces of the relevant municipality or online. The online service can be accessed through www.turkiye.gov.tr, this service is free of charge. However, obtaining this document online is still not a common practice in Istanbul. Therefore, the seller obtains the value statement in person from the municipality where the real estate is situated. The municipalities update these value statements every year by categorizing properties according to their location and features. 5 Parties apply for registration and obtain tax payment assessment 1 day no cost Agency : Land Registry o ce It is possible for parties to make an online appointment from the general IT system of the Land Registry in order to pick a date/time when to submit an application to the registration. The seller and the purchaser (or their representatives) meet at the registry o ce and ll in an application form. Once the required documents are presented, the parties declare the consideration to be paid by the purchaser. The o cer calculates the mortar dues based on the declared purchase price, and gives the account details of the registry o ce 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: (i) Annual property tax declaration of the seller and buyer. (ii) The Authorization Certi cate of the manager obtained from trade registry, if transactions are carried out by the company signatories (obtained in Procedure No. 2). (iii) The notarized proxies of the representatives (if they will perform the transaction) (iv) The identity cards of signatories (passport for foreigners) (v) One photograph of of the seller (or his representative) and two photographs of the buyer (or his representative) (vi) Signature Circular of the buyer company and seller company, (vii)Title deed copy or information regarding the title deed of the property (viii) A document showing the current value of the property, issued by the Municipality (obtained in Procedure No. 4). (ix) An earthquake insurance policy (obtained in Procedure No. 3) (x) Signatories shall keep the seal of the company during the Procedure. The Land Registry O ce accepts application when all the above listed documents are submitted and informs interested parties (with a text message generated through the general IT system of the Land Registry) giving them the application number and notifying that the application is being processed. According to the Circular No. 2014/8 dated 17 October 2014 issued by the General Directorate of the Land Registry and Cadaster Department of Land Registry, it is possible to conduct title deed transactions for properties located all over Turkey in any Land Registry regardless of the property's location and jurisdiction area of the relevant o ce. For title deed transactions related to properties located outside jurisdiction area, the non- competent o ces cannot carry out any transaction unless they request authorization and records of the relevant property from the competent o ce over the TAKBIS system. TAKBIS system enables the non-competent o ce to transfer a transaction request to the competent o ce and Page 35   complete the transaction based on the authorization and records received The municipalities update these value statements every year by categorizing Doing properties Business according to their location and features. 2018 Turkey 5 Parties apply for registration and obtain tax payment assessment 1 day no cost Agency : Land Registry o ce It is possible for parties to make an online appointment from the general IT system of the Land Registry in order to pick a date/time when to submit an application to the registration. The seller and the purchaser (or their representatives) meet at the registry o ce and ll in an application form. Once the required documents are presented, the parties declare the consideration to be paid by the purchaser. The o cer calculates the mortar dues based on the declared purchase price, and gives the account details of the registry o ce 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: (i) Annual property tax declaration of the seller and buyer. (ii) The Authorization Certi cate of the manager obtained from trade registry, if transactions are carried out by the company signatories (obtained in Procedure No. 2). (iii) The notarized proxies of the representatives (if they will perform the transaction) (iv) The identity cards of signatories (passport for foreigners) (v) One photograph of of the seller (or his representative) and two photographs of the buyer (or his representative) (vi) Signature Circular of the buyer company and seller company, (vii)Title deed copy or information regarding the title deed of the property (viii) A document showing the current value of the property, issued by the Municipality (obtained in Procedure No. 4). (ix) An earthquake insurance policy (obtained in Procedure No. 3) (x) Signatories shall keep the seal of the company during the Procedure. The Land Registry O ce accepts application when all the above listed documents are submitted and informs interested parties (with a text message generated through the general IT system of the Land Registry) giving them the application number and notifying that the application is being processed. According to the Circular No. 2014/8 dated 17 October 2014 issued by the General Directorate of the Land Registry and Cadaster Department of Land Registry, it is possible to conduct title deed transactions for properties located all over Turkey in any Land Registry regardless of the property's location and jurisdiction area of the relevant o ce. For title deed transactions related to properties located outside jurisdiction area, the non- competent o ces cannot carry out any transaction unless they request authorization and records of the relevant property from the competent o ce over the TAKBIS system. TAKBIS system enables the non-competent o ce to transfer a transaction request to the competent o ce and complete the transaction based on the authorization and records received over TAKBIS. In brief, it is possible to complete a title deed transaction without making a trip to the city/district where the land is located. In case this remote system is used, registration fees increase by 100%. 6 Registration fee is paid at a commercial bank 1 day TL 226.5 (registration Agency : Commercial Bank fee of TL 90.5 multiplied by Mortar dues are paid to the bank account of the land registry, and the bank Istanbul's local will give a receipt of the payment. The mortar due is equal to 4% of the coefficient of 2.5 )+ declared amount in Turkish Lira, collected 2% each from the parties, but in 4% of declared practice usually the purchaser pays all. Mortar dues regarding transfer of transaction price immovable property has been reduced to 3% of the declared sale price of the property until September 30, 2017, by decree of the Council of Ministers (mortar dues) or 3% is numbered 2017/9973. After September 30 2017, mortar dues will again be of the taxable value Page 36   of the real estate increased to 4% of the sale price of the property. without making a trip to the city/district where the land is located. In case Doing this 2018 isTurkey remote system Business used, registration fees increase by 100%. 6 Registration fee is paid at a commercial bank 1 day TL 226.5 (registration Agency : Commercial Bank fee of TL 90.5 multiplied by Mortar dues are paid to the bank account of the land registry, and the bank Istanbul's local will give a receipt of the payment. The mortar due is equal to 4% of the coefficient of 2.5 )+ declared amount in Turkish Lira, collected 2% each from the parties, but in 4% of declared practice usually the purchaser pays all. Mortar dues regarding transfer of transaction price immovable property has been reduced to 3% of the declared sale price of the property until September 30, 2017, by decree of the Council of Ministers (mortar dues) or 3% is numbered 2017/9973. After September 30 2017, mortar dues will again be of the taxable value increased to 4% of the sale price of the property. of the real estate The parties also pay a registration fee (Döner Sermaye Hizmet Bedeli) to (whichever is higher). cover overall expenses of Land Registries in Turkey. This is usually paid by Tax rate of mortar the purchaser to the bank account of the Land Registry. Registration fee is dues applies until calculated by multiplying TL 90.50 xed charge with local coe cients subject September 30, 2017 to the Law regarding Service Charges to Be Collected by Land Registry O ces numbered 6544. Local coe cient for all districts of Istanbul is set out as 2.5 in the tari published by the Directorate General of Land Registry and Cadastre. Therefore, the total amount of the service charge of a property transfer transaction carried out at a land registry o ce in Istanbul for a two- story building will be TL 226.25. General IT system informs the concerned parties with a text message when the registration fee and mortar dues should be paid at the commercial bank. This message is being sent to the parties after the evaluation process is completed by the Land Registry o cers. The commercial bank to which the registration fees and mortar dues are deposited is a bank designated by the Land title registry. In other words, the parties should deposit the concerned amounts to the bank account of Land Registry at a bank determined by the Registry itself. Mortar dues as well as the circulating capital fee can be paid online. In the text message received from the IT system, there are some links to pay online with the use of the application number given by the Land Registry o ce for the transaction. However, the most common method of payment is still going physically to the bank o ce to pay. 7 Transaction is completed at the registry o ce 1 day Already paid in Agency : Land Registry o ce Procedure 5 Once all the above Procedures are ful lled, a text message sent from general IT o ce of Land Registry that the parties should be present at the land registry o ce at the appointment hour decided previously by the Land Registry for the nalization of the transaction. The parties meet at registry o ce before the registry manager or his deputy at the appointment hour decided previously. The purchaser pays the consideration at that time. If it has already been paid, the seller would declare that it has already been fully paid. Then the parties both sign the land record sheet and the photographs of each of the parties are attached 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 and ID cards. Takes place simultaneously with previous procedure. Details – Registering Property in Turkey – Measure of Quality Answer Score Page 37   Takes place simultaneously with previous procedure. Doing Business 2018 Turkey Details – Registering Property in Turkey – Measure of Quality Answer Score Quality of the land administration index (0-30) 21.5 Reliability of infrastructure index (0-8) 8.0 What is the institution in charge of immovable property registration? Land Registry O ce (Tapu) In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Cadastral Directorate of Istanbul In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Single database 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Only 0.0 immovable property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: https://randevu.t kgm.gov.tr/en/Ap pointment/Appoi ntmentDocumen ts https://www.tkg m.gov.tr/tr/icerik /satis-islemleri- icin-gerekli- evraklar-nelerdir- satis-icin-ne- kadar-ucret- oderim Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 Page 38   immovable property registration in the largest business city made publicly available– kadar-ucret- Doing Business 2018 Turkey oderim Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: https://www.tkg m.gov.tr/sites/de fault/ les/icerik/e kleri/2017_ yat_li stesi.pdf Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 392138.0 Who is able to consult maps of land plots in the largest business city? Freely accessible 0.5 by anyone Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: https://www.tkg m.gov.tr/sites/de fault/ les/icerik/e kleri/2017_ yat_li stesi.pdf https://www.tkg m.gov.tr/sites/de fault/ les/icerik/e kleri/4_sayili_tar0 fe- tapu_harclari_ha rclar.pdf Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Page 39   Geographic Doing coverage Business (0–8) indexTurkey 2018 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 7.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a The Civil Court of property worth 50 times gross national income (GNI) per capita and located in the First Instance of largest business city, what court would be in charge of the case in the rst instance? Istanbul How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? Yes 0.5 Number of land disputes in the largest business city in 2015: Number of land disputes that were led to Court in 2016: 28734 Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy Page 40   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Turkey Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Strength of legal rights index (0-12) 4 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.3 6.6 8.00 (34 Economies) Page 41   Credit registry coverage (% of adults) 80.2 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Turkey Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Strength of legal rights index (0-12) 4 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 80.2 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 0.0 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: Romania (Rank: 20) 75.00: India (Rank: 29) 70.00: Bulgaria (Rank: 42) 64.58: Regional Average (Europe & Central Asia) 55.00: Turkey (Rank: 77) 45.00: Tunisia (Rank: 105) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Turkey and comparator economies 10 9 9 9 8 8 7 6.6 Index score 6 5 4 4 3 3 2 1 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Legal Rights in Turkey Strength of legal rights index (0-12) 4 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 42   Turkey Bulgaria India Romania Tunisia Europe & Central Asia Doing Business 2018 Turkey Details – Legal Rights in Turkey Strength of legal rights index (0-12) 4 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Turkey and comparator economies 8 7 7 7 6.3 6 6 5 Index score 4 2 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Credit Information in Turkey Page 43   0 Turkey Doing Business 2018 TurkeyBulgaria India Romania Tunisia Europe & Central Asia Details – Credit Information in Turkey Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more No Yes 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? No Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, No Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No Yes 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 33,843,939 Number of firms 0 8,822,255 Total 0 42,666,194 Percentage of adult population 0.0 80.2 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 44   transactions; Available legal remedies (damages, Percentage of adult population 0.0 80.2 Doing Business 2018 Turkey Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 7.7 6.6 6.4 Page 45   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Turkey Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 7.7 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: India (Rank: 4) 71.67: Turkey (Rank: 20) 70.00: Bulgaria (Rank: 24) 64.31: Regional Average (Europe & Central Asia) 60.00: Romania (Rank: 57) 48.33: Tunisia (Rank: 119) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Turkey and comparator economies – Measure of Quality Turkey 8 5 9 7 8 6 Bulgaria 9 2 10 5 8 8 India 8 7 8 8 10 7 Romania 7 4 9 5 6 5 Tunisia 6 7 4 3 4 5 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Europe & Central Asia 7.4 4.6 7 5.5 7.2 6.8 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Turkey – Measure of Quality Answer Score Page 46   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Turkey Details – Protecting Minority Investors in Turkey – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6.7 Extent of disclosure index (0-10) 9 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 5 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 6 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Page 47   shareholder Ease ofBusiness Doing suits index 2018 (0-10) Turkey 6 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 7.7 Extent of shareholder rights index (0-10) 8 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 7 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Page 48   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of Doing their term? Business 2018 Turkey Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 8 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. Page 49   Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Turkey Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Payments (number per year) 11 16.5 10.9 3 (Hong Kong SAR, China) Page 50   return, but within the tax assessment period. Doing Business 2018 Turkey Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Payments (number per year) 11 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 215.5 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 41.1 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 50.00 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.86: Romania (Rank: 42) 75.78: Regional Average (Europe & Central Asia) 72.40: Turkey (Rank: 88) 71.78: Bulgaria (Rank: 90) 66.06: India (Rank: 119) 60.14: Tunisia (Rank: 140) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Turkey and comparator economies – Measure of Quality 90 80 76.82 69.30 70 65.20 60 Index score 50.00 49.31 50 40 30 22.91 20 10 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Paying Taxes in Turkey Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) TTR onPage 51   Doing Business 2018 Turkey Figure – Paying Taxes in Turkey and comparator economies – Measure of Quality 90 80 76.82 69.30 70 65.20 60 Index score 50.00 49.31 50 40 30 22.91 20 10 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Paying Taxes in Turkey Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Corporate income tax 1 online 45 20% taxable profit 18.16 Employer paid - Social 1 online 80 15.5% gross salaries 17.66 security contributions Employer paid - 0 jointly 2% gross salaries 2.28 Unemployment insurance contributions Property transfer fee 1 2% sale price 1.21 Property tax 1 0.1% and 0.3% value of 0.88 (doubled in Istanbul) building and land (reevaluated each year) Stamp duty on 1 0.948% sale price 0.57 property sale Tax on interest 0 withheld 10%-12%-13%-15%-18% interest income 0.38 included in other taxes Vehicle tax 1 TRY 2,338 fixed fee 0.21 Transaction tax on 1 TRY 5.25 per check number of 0.11 checks checks Environment tax 1 varies between TRY 0.02 3,125 to TRY 25 Fuel tax 1 included in fuel price 0.00 small amount Employee paid - 0 jointly 0.66% gross salaries 0.00 withheld Page 52   Payroll tax Fuel tax 1 included in fuel price 0.00 small Doing Business 2018 Turkey amount Employee paid - 0 jointly 0.66% gross salaries 0.00 withheld Payroll tax Employee paid - Social 0 jointly 14% gross salaries 0.00 withheld security contributions Employee paid - 0 jointly 1% gross salaries 0.00 withheld Unemployment insurance contributions Value added tax (VAT) 1 online 91 General rate is 18% but value added 0.00 not varies between 1%-18% included Advertising tax 1 various rates advertising 0.00 small expense amount Totals 11 215.5 41.1 Details – Paying Taxes in Turkey – Tax by Type Taxes by type Answer Profit tax (% of profit) 18.2 Labor tax and contributions (% of profit) 19.9 Other taxes (% of profit) 3.0 Details – Paying Taxes in Turkey – Measure of Quality Answer Score Post ling index (0-100) 50.00 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Restricted to international traders and others Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study Page 53   scenario per case study Doing Business 2018 Turkey scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 1.5 100 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Page 54   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Turkey Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 55   of agriculture or industry, national security agencies and any other Doing Business 2018 Turkey government authorities. Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Time to export: Border compliance (hours) 16 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 376 191.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 5 27.9 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 87 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 41 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 655 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 11 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 142 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 97.41: Bulgaria (Rank: 21) 83.96: Regional Average (Europe & Central Asia) 79.71: Turkey (Rank: 71) 70.50: Tunisia (Rank: 96) 58.56: India (Rank: 146) 100.00: Romania (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Turkey – Time and Cost Time Cost 45 41 655 700 40 600 35 500 30 Time (hours) Cost (USD) 376 400 25 20 16 300 15 11 200 142 10 5 87 100 5 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 56   Doing Business 2018 Turkey Figure – Trading across Borders in Turkey – Time and Cost Time Cost 45 41 655 700 40 600 35 500 30 Time (hours) Cost (USD) 376 400 25 20 16 300 15 11 200 142 10 5 87 100 5 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Turkey Characteristics Export Import Product HS 87 : Vehicles other than railway or tramway rolling-stock, and HS 8708: Parts and accessories of parts and accessories thereof motor vehicles Trade partner France Germany Border Derince port Ambarli port Distance (km) 90 38 Domestic transport 3 3 time (hours) Domestic transport 550 263 cost (USD) Details – Trading across Borders in Turkey – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.0 66.4 Export: Clearance and inspections required by agencies other than customs 6.0 20.0 Export: Port or border handling 8.0 290.0 Import: Clearance and inspections required by customs authorities 26.6 266.5 Import: Clearance and inspections required by agencies other than customs 9.5 56.2 Import: Port or border handling 16.0 332.5 Details – Trading across Borders in Turkey – Trade Documents Export Import Page 57   cost (USD) Doing Business 2018 Turkey Details – Trading across Borders in Turkey – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.0 66.4 Export: Clearance and inspections required by agencies other than customs 6.0 20.0 Export: Port or border handling 8.0 290.0 Import: Clearance and inspections required by customs authorities 26.6 266.5 Import: Clearance and inspections required by agencies other than customs 9.5 56.2 Import: Port or border handling 16.0 332.5 Details – Trading across Borders in Turkey – Trade Documents Export Import ATR ATR Bill of lading Bill of lading CMR Cargo release order Customs declaration Carnet TIR Invoice CMR waybill Packing list Customs import declaration SOLAS certificate Freight invoice Insurance policy Invoice Packing list Tareks Reference number - Technical certificate Warehouse declaration SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Page 58   SOLAS certificate Doing Business 2018 Turkey Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value TRY 48,991.00 Court name Istanbul Commercial Court of First Instance City Covered Istanbul Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Time (days) 580 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 24.9 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 13.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 72.25: Romania (Rank: 17) 68.87: Turkey (Rank: 30) 67.04: Bulgaria (Rank: 40) Page 59   of judicial processes Quality Business Doing index (0-18) 2018 Turkey 13.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 72.25: Romania (Rank: 17) 68.87: Turkey (Rank: 30) 67.04: Bulgaria (Rank: 40) 65.38: Regional Average (Europe & Central Asia) 59.33: Tunisia (Rank: 76) 40.76: India (Rank: 164) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Turkey – Time and Cost Time Cost 1600 35 1445 31.0 1400 30 Cost (% of claim value) 26.2 25.8 1200 24.9 21.8 25 21.5 Time (days) 1000 18.6 20 800 564 577.8 565 580 15 600 489.9 512 400 10 200 5 0 0 Bulgaria Europe & India OECD high income Romania Tunisia Turkey Central Asia Figure – Enforcing Contracts in Turkey and comparator economies – Measure of Quality Turkey 2 4 3.5 3.5 Bulgaria 2.5 2.5 2 3.5 India 2.3 1.5 2 4.5 Romania 3 4 2 5 Tunisia 2 0 0.5 4.5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 Page 60   16 Bulgaria Europe & India OECD high income Romania Tunisia Turkey Central Asia Doing Business 2018 Turkey Figure – Enforcing Contracts in Turkey and comparator economies – Measure of Quality Turkey 2 4 3.5 3.5 Bulgaria 2.5 2.5 2 3.5 India 2.3 1.5 2 4.5 Romania 3 4 2 5 Tunisia 2 0 0.5 4.5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Turkey Indicator Time (days) 580 Filing and service 30 Trial and judgment 450 Enforcement of judgment 100 Cost (% of claim value) 24.9 Attorney fees 12 Court fees 3 Enforcement fees 9.9 Quality of judicial processes index (0-18) 13.0 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 4.0 Court automation (0-4) 3.5 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Turkey – Measure of Quality Page 61   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Turkey Details – Enforcing Contracts in Turkey – Measure of Quality Answer Score Quality of judicial processes index (0-18) 13.0 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 3.5 1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the Yes 1.0 competent court? Page 62   1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 Businesscourt? the competent Doing 2018 Turkey 2. Is it possible to carry out service of process electronically for claims led before the Yes 1.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.0 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public Yes order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 63   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Turkey Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 15.3 38.0 71.2 93.1 (Norway) Time (years) 5.0 2.3 1.7 0.4 (Ireland) Page 64   Cost (% of estate) 14.5 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Turkey Europe & OECD high Indicator Turkey Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 15.3 38.0 71.2 93.1 (Norway) Time (years) 5.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 14.5 13.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 8.0 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Turkey and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 60.02: Bulgaria (Rank: 50) 59.78: Romania (Rank: 51) 54.53: Tunisia (Rank: 63) 54.19: Regional Average (Europe & Central Asia) 40.75: India (Rank: 103) 33.26: Turkey (Rank: 139) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Turkey – Time and Cost Time Cost 6 16 14.5 13.1 5.0 14 5 4.3 12 10.5 Cost (% of estate) Time (years) 4 3.3 9.0 9.0 9.1 3.3 10 3 7.0 8 2.3 1.7 6 2 1.3 4 1 2 0 0 Bulgaria Europe & India OECD high income Romania Tunisia Turkey Central Asia Figure – Resolving Insolvency in Turkey and comparator economies – Measure of Quality Turkey 2 3 2 1 Page 65   Bulgaria 4 2.5 4 2.5 Bulgaria Europe & India OECD high income Romania Tunisia Turkey Central Asia Doing Business 2018 Turkey Figure – Resolving Insolvency in Turkey and comparator economies – Measure of Quality Turkey 2 3 2 1 Bulgaria 4 2.5 4 2.5 India 4.5 2 1 1 Romania 6 2.5 2 2.5 Tunisia 5.5 2 1 0 OECD high income 5.4 2.8 2.3 1.9 Europe & Central Asia 4.4 2.6 2.1 1.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Turkey and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 60 52.0 50 36.0 38.0 40 35.6 30 26.4 20 15.3 10 0 Turkey Bulgaria India Romania Tunisia Europe & Central Asia Details – Resolving Insolvency in Turkey Indicator Answer Explanation Proceeding liquidation The most common and practical way for the hotel to proceed was the postponement of (after an bankruptcy procedure. Article 377 of Turkish Commercial Code and Article 179 of the Turkish attempt at Enforcement and Bankruptcy Code regulate this procedure. The debtor must propose a reorganization) rehabilitation plan. The court may decide to grant up to one year for the debtor to attempt rehabilitation based on the proposed plan. This period can be extended up to 4 years in total. Upon the decision on postponement of bankruptcy, no legal proceeding (including the proceedings for the collection of the public receivables) can be initiated against the debtor and the pending proceedings will be deferred. If the court agrees to postpone the bankruptcy, it will also appoint an administrator in the same decision. The maximum postponement period is one year (it can be extended up to 4 years) during which time the administrator will supervise the business. In most cases, similar to the case study, the debtor does not achieve the projections of the rehabilitation plan and the court will commence liquidation proceedings. However, the postponement of bankruptcy procedures Page 66   Turkey Bulgaria India Romania Tunisia Europe & Central Asia Doing Business 2018 Turkey Details – Resolving Insolvency in Turkey Indicator Answer Explanation Proceeding liquidation The most common and practical way for the hotel to proceed was the postponement of (after an bankruptcy procedure. Article 377 of Turkish Commercial Code and Article 179 of the Turkish attempt at Enforcement and Bankruptcy Code regulate this procedure. The debtor must propose a reorganization) rehabilitation plan. The court may decide to grant up to one year for the debtor to attempt rehabilitation based on the proposed plan. This period can be extended up to 4 years in total. Upon the decision on postponement of bankruptcy, no legal proceeding (including the proceedings for the collection of the public receivables) can be initiated against the debtor and the pending proceedings will be deferred. If the court agrees to postpone the bankruptcy, it will also appoint an administrator in the same decision. The maximum postponement period is one year (it can be extended up to 4 years) during which time the administrator will supervise the business. In most cases, similar to the case study, the debtor does not achieve the projections of the rehabilitation plan and the court will commence liquidation proceedings. However, the postponement of bankruptcy procedures are temporarily suspended by the Statutory Decrees until the end of state of emergency. Outcome piecemeal sale If the debtor fails to achieve its goals shown in the rehabilitation report, then the court will rule for opening its bankruptcy. Therefore in that case it would not be possible for the debtor to continue operating as a going concern. Time (in years) 5.0 After several months of procedural matters and hearings, the court will grant a one-year postponement of bankruptcy period to Mirage. This period can be extended up to 5 years depending on the achievement of the rehabilitation plan. In the case of Mirage, the postponement period will last 3 years in total. After the third year, Mirage can request an extension of the postponement period (another year), however, the court will likely deny this this request, because Mirage is not likely to comply with the financial projections of the proposed rehabilitation plan. The court will declare Mirage bankrupt and notify the bankruptcy office. Bankruptcy administrators will be appointed and will carry out the liquidation procedure. Bankruptcy administrators will examine the inventory and financials of the company, review creditors' claims, prepare creditors' list, organize creditors' meetings and facilitate the sale of the hotel's assets. The bankruptcy procedure will last 18 months. Given the recent restructuring of its commercial courts, pending cases are experiencing significant delays while case files are being reassigned to new courts. It is however expected that this reform will speed up proceedings in the longer term. Cost (% of 14.5 The largest part of the expenses is government levies (4.55% for bankruptcy) and other case- estate) related costs (court fees, publication costs, stamp duty, etc.). Attorney fees comprise about 5% of the total expenses, as per the fee schedule for Monetary Claims and related proceedings before Execution and Bankruptcy Offices. Fees of administrators, auctioneers, accountants and other professionals involved in the insolvency proceedings make up the rest of the expenses. Recovery rate (cents on the 15.3 dollar) Details – Resolving Insolvency in Turkey – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 3.0 Page 67   dollar) Doing Business 2018 Turkey Details – Resolving Insolvency in Turkey – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 1.0 Which creditors vote on the proposed reorganization plan? (c) Other 0.0 Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Page 68   Creditor Doing participation Business 2018 index (0-4) Turkey 2.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 69   work of equal value and nondiscrimination based on the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Turkey Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Turkey Answer Hiring Page 70   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Turkey Details – Labor Market Regulation in Turkey Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 616.3 Ratio of minimum wage to value added per worker 0.4 Maximum length of probationary period (months) 2.0 Working hours Standard workday 7.5 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men No Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 14.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 18.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 71   Third-party Doing approval Business 2018 if nine workers are dismissed? Turkey No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 8.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 6.7 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.3 Severance pay for redundancy dismissal for a worker with 5 years of tenure 21.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 43.3 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 23.1 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 112.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 6.0 Business Reforms in Turkey In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Turkey implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Registering Property: Turkey made registering property easier by lowering the costs of transferring property. Getting Credit: Turkey strengthened access to credit by adopting a new law on secured transactions that establishes a uni ed collateral registry and allows out-of-court enforcement of collateral. Turkey also improved its credit information system by adopting a new law on personal data protection. Resolving Insolvency: Turkey made resolving insolvency more di cult by suspending applications for postponement of bankruptcy procedures introduced both before and during the state of emergency. Page 72   Minimum contribution period for unemployment protection (months)? 6.0 Doing Business 2018 Turkey Business Reforms in Turkey In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Turkey implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Registering Property: Turkey made registering property easier by lowering the costs of transferring property. Getting Credit: Turkey strengthened access to credit by adopting a new law on secured transactions that establishes a uni ed collateral registry and allows out-of-court enforcement of collateral. Turkey also improved its credit information system by adopting a new law on personal data protection. Resolving Insolvency: Turkey made resolving insolvency more di cult by suspending applications for postponement of bankruptcy procedures introduced both before and during the state of emergency. DB2017 Starting a Business: Turkey simpli ed the process of starting a business by reducing the time needed to register a company. Paying Taxes: Turkey made paying taxes easier by introducing electronic invoicing and electronic bookkeeping. At the same time, however, Turkey also increased the rate of transaction tax applicable on checks. DB2016 Dealing with Construction Permits: Turkey made dealing with construction permits easier by streamlining the process to obtain the re clearance. DB2015 Starting a Business: Turkey made starting a business more di cult by increasing the notary and company registration fees. Paying Taxes: Turkey made paying taxes more costly for companies by increasing employers’ social security contribution rate. Enforcing Contracts: Turkey made enforcing contracts easier by introducing an electronic ling system for court users. DB2014 Starting a Business: Turkey made starting a business more di cult by increasing the minimum capital requirement. Dealing with Construction Permits: Turkey reduced the time required for dealing with construction permits by setting strict time limits for granting a lot plan and by reducing the documentation requirements for an occupancy permit. Getting Electricity: Turkey made getting electricity easier by eliminating external inspections and reducing some administrative costs. Registering Property: Turkey made transferring property more costly by increasing the registration and several other fees. Protecting Minority Investors: Turkey strengthened investor protections through a new commercial code that requires directors found liable in abusive related-party transactions to disgorge their pro ts and that allows shareholders to request the appointment of an auditor to investigate alleged prejudicial con icts of interest. DB2013 Dealing with Construction Permits: Turkey made dealing with construction permits easier by eliminating the requirement to build a shelter in nonresidential buildings with a total area of less than 1,500 square meters. Enforcing Contracts: Turkey made enforcing contracts easier by introducing a new civil procedure law. DB2012 Starting a Business: Turkey made starting a business less costly by eliminating notarization fees for the articles of association Page 73   and other documents. Doing Business 2018 DB2012 Turkey Starting a Business: Turkey made starting a business less costly by eliminating notarization fees for the articles of association and other documents. Paying Taxes: Turkey lowered the social security contribution rate for companies by o ering them a 5% rebate DB2010 Getting Credit: Turkey’s private credit bureau added rms to its database, improving access to credit information. DB2009 Protecting Minority Investors: Turkey strengthened investor protections by requiring that an independent auditor assess related-party transactions before approval. DB2008 Paying Taxes: Turkey made paying taxes less costly for companies by reducing the tax rates on corporate income and on interest. Trading across Borders: Turkey made trading across borders easier by introducing an electronic data interchange system, improving information technology infrastructure and training some 2,500 customs o cers and 14,000 traders. Page 74   Trading across Borders: Turkey made trading across borders easier by introducing an electronic data interchange system, improving information Doing Business technology 2018 Turkeyinfrastructure and training some 2,500 customs o cers and 14,000 traders. Page 75