Government prepares ‘reform package’ in bid to lure investors to Turkey: Deputy PM

Government prepares ‘reform package’ in bid to lure investors to Turkey: Deputy PM

Government prepares ‘reform package’ in bid to lure investors to Turkey: Deputy PM

The government has prepared a 93-item “reform package” in a bid to lure crucial investors to Turkey, Deputy Prime Minister Recep Akdağ has said.

“A reform package to improve the investment environment will be submitted to parliament,” Akdağ told reporters in Ankara on Jan. 30.

“We will take Turkey to the level it deserves in terms of ease of doing business,” he said.

Akdağ said the draft would include changes making it easier to establish firms, lifting the current 25 percent necessary capital bloc for newly founded companies and allowing companies to pay that amount in installments over 24 months.

“We will also reduce the number of procedures needed in the founding of companies to one from the current seven,” he added.

A major change foreseen in the package relates to the suspension of bankruptcy, a much debated procedure that experts say is often abused. More than 1,000 companies sought to have their bankruptcy proceedings suspended from the beginning of 2015 until the practice was banned in a state of emergency decree law in the summer of 2016. 

The suspension of bankruptcy is a method for companies experiencing financial difficulties to recover their losses but some companies have used the opportunity for access to easy and cheap loans.

Akdağ said the draft introduces a 23-month time limit for suspension demands, instead of the current practice that exceeds six years.

“We are removing the suspension of bankruptcy because in practice it has turned out to be open to misuse,” he added.

Suspension of bankruptcy was frozen using a decree law to ease the seizure of assets of companies linked to the Fethullah Gülen network, widely believed to have orchestrated the July 2016 coup attempt.

A new state institution will be established to sign deals to rescue companies instead of the current suspension system, Akdağ said.

Eight ministers, related officials, the Turkish Union of Chambers and Commodity Exchanges (TOBB) and private sector representatives came together for the five-month preparation process of the draft, he also said, adding that Justice Minister Abdülhamit Gül will detail changes in seizure and bankruptcy procedures in due course.

“A new regulation is urgently needed,” lawyer Satılmış Şahin told Hürriyet, commenting on the deputy prime minister’s announcement.

“Many companies we are in contact with have been eagerly awaiting this new law package,” Şahin said, adding that the suggested changes are also in line with the World Bank’s expectations.