Turkey’s New Commercial Code to Cost 6 Billion Turkish Liras

Turkey’s new trade code of transparency to cost 6 bln liras

Turkey’s new commercial code is to cost some 6 billion Turkish Liras for 600,000 companies across the country, said Mustafa Çamlıca, head of the local branch of Ernst&Young.

These costs would largely be for building websites and updating stationery, said Çamlıca during an Ernst&Young and private TV channel CNBC-e meeting in Istanbul to present the new code to the business world.

The law obliges all equity companies to launch their own websites and to keep trade registers in an electronic environment and to update them. Çamlıca said this would help integrate companies with the informatics world. Companies will also be able to hold their meetings in an electronic environment.

“This new system is a revolution,” Çamlıca said.

The new code will improve transparency in Turkish trade and support the fight against “gray economy” activity, according to Hüseyir Erkan, chairman of Istanbul Stock Exchange, or ISE.

“It is good for both the capital markets and Turkey in general terms,” he said during his speech at Monday’s meeting.

Unregistered economic activity is a major problem for all emerging economies, said Erkan.

Currently, the employment figures also cannot be measured soundly, he noted.

Companies will no longer hesitate because they “cannot compete with rivals who operate via unregistered means,” he said.

The items in the new code require firms to accept registered capital, even though they are not open to the public. Audit reports have become an obligation for incorporated companies to determine whether they operate in accordance with the law and agreement in capital commitment and payment. Companies will be able to hold their board meetings without the participation of an official from the Trade Ministry. Still, the participation of an official will be left to the company’s request.

The code also brings high punishments to companies collecting money from the public without permission.

The new system will also contribute in encouraging foreign money to flow into the country as it promises a safe investment environment, according to Nail Sanlı, head of Turkey’s Union of Chambers of Certified Public Accountants, or TÜRMOB.

May 23, 2011
SOURCE:  Hürriyet Daily News