Chronicles of a Wandering Mind

In the last entry, we’ve started to compare the experiences of fictitious entrepreneurs in Turkey and US, and found out, setting up the legal entity is much more expensive and difficult in Turkey than it is in US. Our American entrepreneurs have already dove into their work, yet our Turkish entrepreneurs are still struggling to figure out all the things they have to do. Unfortunately for them, the hassle of setting up the legal entity is not an exception but an ongoing struggle.
Our entrepreneurs will first have to develop their product, hence for the first year, they will have very limited commercial activity. They don’t plan on hiring any employees, they plan to use one of their appartments as their office, and they will not buy/sell much, may be some computer equipment.

The American entrepreneurs use one of their appartments as the business address, buy a domain name for their company and subscribe to a hosting provider. They now have a website (their virtual office), business email, and broadband internet. Their monthly cost is less than $100,an insignificant amount. They only need enough money to be able to live, nothing more (other than $100/month) is needed. The only paperwork they will have to do is to file for taxes (which they will not have any) at the end of the year. It will be a simple process if they don’t have any activity, and even if they did, they can do it easily using the resources over the web. They will not have to spend more than 2 days over the year for the paperwork.
The Turkish entrepreneurs however, just found out that by law they have to have a certified accountant, further more the “fee” for the certified accountants is regulated by some semi-governmental organization. They have to pay about $250/month to an accountant for bookkeeping. This is a big blow to them, since it is a lot of money for our budding entrepreneurs. They hear that it may be possible to find an accountant that provides the service for less (against the regulations), but doing illegal things (or working with an accountant that does) makes them nervous so they decide to do the things by the book and look for a proper accountant.

They also find out that it is mandatory to register with the chamber of commerce and surprise surprise! registration is not free. (about $110/year). They will also find out that they will make frequent visits to the chamber of commerce to get some documentation and pay them “fees” for number of things, such as opening up a bank account, etc. The affair is hardly different than the “protection money” vendors have to pay to various mafias (no personal experience with this, just what I heard), other than the fact that this one (payment to the chamber of commerce) is mandated by the government. Nice! Way to nurture budding companies. I’ll have to repeat the anectode I have used for the Media in a previous blog entry, about the terrible quality of drugs in the beginning of 1900’s: if all the drugs of the time were tossed in the sea, it would be better for mankind and worse for the fish. Chamber of commerce organizations add little value and suck the blood of companies, all sanctioned by the government.

In addition to the fees they have to pay to the chamber of commerce, our entrepreneurs are told that the chamber of commerce representatives will have to come and “inspect” their business premises to validate that it is a “legitimate” business! Needless to say, our entrepreneurs are panic a bit since they plan to use the living room of one of their appartments as the office and not sure what “legitimate” is (nor they can find information on what/how they will be inspecting. Their “agent” who helps them to set up the legal entity tells them that the issue can be “resolved” and he takes care of it with some “gifts”. I’m not even get into this subject any further than this, as it is a deep deep hole, needless to say, our entrepreneurs are quite uncomfortable but don’t want the hassle so accept the proposed solution.

They have not yet managed to “produce” anything so far, still fighting through the paperwork. They’ve also started to question whether they are doing the right thing by starting a company, instead of working for a “respectable” corporation.

I’ll continue with their saga in the next post. Stay tuned …