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PRESS RELEASE October 31, 2018

Doing Business Report: Turkey is a Top Improver for First Time, with Record Business Reforms

ANKARA, October 31, 2018 – Turkey carried out a record number of business reforms in the past year, earning the country a spot in this year’s top 10 global improvers, says the World Bank Group’s Doing Business 2019: Training for Reforms report.

The reforms are a significant acceleration of the country’s efforts to improve the business climate for domestic small and medium enterprises. In the past five years, Turkey has averaged just one reform a year. As a result of the past year’s reforms, Turkey advanced to 43rd place in the global ease of doing business ranking.

“I am pleased to note the priority the government is placing on the important agenda of improving the business climate to boost investment and create jobs. Given the current economic environment in Turkey, it is, nevertheless, encouraging to the global business community and local entrepreneurs alike to see the process of conducting business simplified in so many Doing Business areas,” said Johannes Zutt, World Bank Country Director for Turkey.

The reforms implemented in the past year are:

  • Starting a Business was made easier and faster by removing the paid-in minimum capital requirement, eliminating notarization requirements and reducing registration costs. It now takes 7 days to start a business, compared with 10 days earlier.
  • Dealing with Construction Permits was improved by publishing online all pre-application requirements needed to obtain a construction permit, thereby enhancing the process of construction permitting. Quality control was also strengthened by imposing stricter qualification requirements for professionals in charge of approving architectural plans. Turkey now ranks 59 globally in this area, compared with 96 last year.
  • Getting Credit was strengthened by improving access to credit information and enhancing the rights of secured creditors in bankruptcy proceedings. As a result of this reform, Turkey catapulted to 32nd place globally in this area, from 77 last year.
  • Paying Taxes was made easier by improving the online portal for filling and payments of taxes. The time needed by a firm to file taxes has been reduced to 170 hours, from 215.
  • Trading Across Borders was facilitated by reducing the time and cost to export and import through various initiatives, including enhancements to the national trade single window and the risk management system as well as lowering customs brokers’ fees. The cost of complying with border requirements for imports, for example, has been slashed to $46, from $266. Turkey’s global ranking in this area has improved to 42.
  • Enforcing Contracts was made easier by publishing judgements of commercial cases and by introducing financial incentives for mediation.
  • Resolving Insolvency was strengthened by introducing the possibility to obtain post-commencement credit and granting creditors greater participation in the proceedings.

The country performs best in the areas of Enforcing Contracts, with a global rank of 19, and Protecting Minority Investors (26). For example, resolving a commercial dispute through a local first-instance court in Turkey costs 25 percent of the claim value, compared to the regional average of 26.3 percent. Turkey is also one of only seven economies in the world that score 15 or higher in the quality of the judicial administration index.  

It also performs well in the area of Registering Property, with a global rank of 39. At just 5 days, it is four times faster to register a property transfer in Turkey than in the region.

The country underperforms in the areas of Resolving Insolvency (with a global rank of 109), Paying Taxes (80) and Starting a Business (78). In the area of Resolving Insolvency, for example, the recovery rate of 15 cents on the dollar in Turkey compares poorly with the regional average of 38.6 cents. And, despite recent reforms in the area of Starting a Business, there is still room for improvement as, for example, starting a business still costs 10.6 percent of the income per capita, compared to 4.6 percent in the region.

The full report and its datasets are available at www.doingbusiness.org


PRESS RELEASE NO: 2019/ECA/50

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Tunya Celasin
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