Inflation in Romania has reached a maximum of the last 3 years: 9.04%

The annual inflation rate, targeted by the National Bank increased in July this year to a peak of the last three years, 9.04%, compared with 8.61% in June and 8.46% in May. At the beginning of August the National Bank of Romania also increased the inflation forecast for the end of 2008, from 6% to 6.6%. Initially the proposed target of the National Bank for the inflation in 2008 was 3.8% plus or minus one percentage.

Accordingly to a Government decision project, that was deposited for public debate and also published on the website of the Ministry for SME’s, Commerce and Tourism, the tax for updating the activities of the companies (the re-codification) will be abolished.

The Minister Ovidiu Silaghi also declared that the companies who already paid the taxes will not get the money back since the law is not applicable retroactively.

Direct foreign investments in Romania increased in the first month of 2008 with 76.4% in comparison to January 2007, totalizing 695 million euros, according to the information published by the Central Bank.

The participations at the capital and the reinvested profit represented 45.2% from the direct foreign investments, while the intra-group loans represented 54.8%.

Direct foreign investments in Romania diminished in 2007 with 22.3%, comprising a total of 7069 thousand million euros, respectively these ones covered the deficit of the balance of payment in proportion of 41.9%.

At the entire economical level, the rhythm of growth of the work productivity exceeded for the first time in 2007 that of the income (22.6%), as shown in the information provided this month by the National Institute of Statistics.

The NIS‘ data points out that between 2002 and 2006, the work productivity increased faster than the wages, related to the levels registered in the last years.

The hourly cost of the labor increased during the last semester of 2007 with 8,18% in comparison to the previous semester, the most significant increases in price being registered in the health area and social assistance, with over 24,5%, as well as in civil engineering, with 12,5%, as announced by the National Institute of Statistics. A slight reduction of 1.13% was registered only in the extractive industry area.

In comparison to the same period of the year 2006, the most important annual increases of the semestrial index of the hourly labor cost are observed in civil engineering (27,59%), in the extractive industry (27,09%) and in transport, depositing and communication departments (24,01%). The most insignificant increase was recorded in Public administration (7.86%), followed by Education (11.15%).

In accordance with the estimations of the members of the Financial Banking Analysts Association from Romania (AAFBR), the country’s economy will raise with almost 6,53% in 2008. They also estimate an appreciation of the national currency at 3.51 lei/euro at the end of 2008.

In keeping with the data furnished by the National Institute of Statistics, Romania’s internal gross product (PIB) increased with 6% in 2007, reaching to 121.3 thousand million euros. Regarding the current banking account deficit, the analysts anticipate a deepening of 14.73% from the internal gross product and that of the budgetary deficit at 2.83% from the PIB.

Beginning with 2008, and according to the article 160, 2nd paragraph from the Fiscal Code, with the further modifications and addings, the goods and the services for the delivery of which the simplification procedures regarding reverse taxation are applied include:

1. the offal’s and the secondary raw material, resulted from their capitalization, such as they are defined by the Government’s Urgent Disposition no 16/2001 regarding the administration of the recycling industrial offal’s, republished, with the further modifications.
2. the goods and/or the performed services by or for the persons for whom the insolvency procedure was started, excepting the goods furnished within the retail trade;
3. the wooden material, in agreement to the norm stipulations.

In accordance with the point 82 from the Methodological Stipulations:

The Official Gazette no 858/2007 published details regarding the procedure of registering of the contracts between Romanian legal entities and foreign legal entities or non resident persons.

This normative document repealed the stipulations of ANAF Disposition no 1.145/2007 emitted in October 2007 and substantially modified the registration procedure of the contracts concluded with non-resident suppliers.

Thus, its important modifications are:

The Official Gazette no 858/2007 published details regarding the procedure of registering of the contracts between Romanian legal entities and foreign legal entities or non resident persons.

This normative document repealed the stipulations of ANAF Disposition no 1.145/2007 emitted in October 2007 and substantially modified the registration procedure of the contracts concluded with non-resident suppliers.

Thus, its important modifications are:

Dacă sunteţi preocupaţi serios de cariera dumneavoastră atunci este momentul să faceţi cunoştinţă cu IntercollegIBS. Acum şi în România!

IntercollegeIBS oferă programe academice şi de pregătire profesională, pentru sectorul financiar – bancar şi cel al afacerilor. Absolvirea acestor programe certificate conferă posibilitatea îmbunătăţirii cunoştinţelor, cu strictă aplicabilitate practică. Certificările internaţionale obţinute în urma absolvirii programelor oferite de IntercollegeIBS sunt de cel mai înalt nivel şi se adresează celor care doresc să devină profesionişti de succes.

If you are serious about your career it’s time to meet IntercollegeIBS! Now also in Romania!

IntercollegeIBS offers both academic programs and professional training for the business and financial services sectors. The graduation of these programs provides the opportunity to enhance knowledge and expertise at the postgraduate level. There are first class qualifications for people intending to become successful professionals.

Ascent Group was frequently referred in the news by many prestigious publications over the last month. Evenimentul Zilei publishes under the title: «The March trinket keeps the employee longer at work» the opinion of Oana Mosoiu, HR consultants within Ascent Group, regarding the motivation of the women employees in the companies during the March holidays.

The prestigious magazine Capital, under the signature of Mirona Hriţcu, analyses the expansion phenomenon of Romanian training and recruitment companies within the Central and Eastern European territory. «Romanian recruitment companies in the long run» is an article where, together with other consultants, Adela Cristea is sharing Ascent Group’s experience in regional development.

After many disputes, the Order 92/2008, issued by the Minister of Labor, Family and Social Equity, Paul Pacuraru, who was modifying the application norms of the Law 19/2000 regarding the public pension and social security system was canceled. The cancellation comes through the Order 128/2008, issued by the same Minister and published in the Official Gazette no. 168 from 3rd of March 2008.

The Order 92/2008 was defining the monthly gross income that is subject of taxation, respectively by the inclusion of new categories of employee benefits as subjects of taxation, such as the presents offered to the employees, the use of company car and company phone for personal purposes.

Beginning with the 3rd of March 2008 have been launched the first measures of investment with a strong impact on restructuring agriculture, food industry and rural areas. These measures have conditions similar to those of the SAPARD program, are expected by most of the potential beneficiaries, and have prepared the institutional and legislative framework of implementation.

Practically, the companies who are active in agriculture and other eligible applicants can already deliver projects to be approved for the three active measures regarding investments in agriculture: in the farms, processing units and development of rural infrastructure.

Together with the approval of the National Program for Rural Development, Romania will receive from the European Union an initial advance of 3.5% of the total value allocated of about 8 billion euros, to start the first actions of financing.

About Romania:

The Government of the Republic of Moldova announced the selling of the participations held in 74 companies. The state’s stocks in those companies are between 10-100%. The selling will be performed by public auction on the Stock Exchange between the 4-17th of March 2008.

As by the Moldavian Law, the right to acquire these shares is reserved for Moldavian individuals or legal entities registered in the Republic of Moldova. The requests for buy can be presented through the brokerage companies registered at the Moldavian Stock Exchange.

For additional information regarding the companies that are sold we invite you to contact the consultants of Ascent Group.

The Ministry of Labor, Family and Social Equity issued the Order 92/8.02.2008, who is modifying the application norms of the Law 19/2000. The change mainly consists in the redefining of the “gross income” that is subject of taxation, respectively by the inclusion of new categories of employee benefits as subjects of taxation.

Some of the incomes considered subject of taxation are: the amounts paid to the employees by retirement, leave and holidays bonuses, the amounts paid as result of the closing of labor relationship, social benefits offered as a result of a social or family event, presents offered in money to the employees on the benefit of minor children, presents offered to employees with various occasions, including the 8th of March, the amounts paid as result of civil conventions.

Analysis published in Consulting Review magazine

The collective labour contract represents an agreement concluded in a written form on one hand between the employer and on the other by the employees, through their assigned representatives or where there is the case, by unions. In this agreement there are established clauses concerning working conditions, remuneration, as well as other rights and obligations resulted from labour relations. All companies that have at least 21 employees are obliged by Labour Code (Law 53/2003, republished) to conclude collective labour agreements.

Lia Bejenaru, became partner of Ascent Business Consulting, the company held by Ascent Group in the Republic of Moldova.

Lia is currently the manager of Ascent Group’s office in Chisinau, and her addition into the ownership structure of the group represents the recognition of the activity she had from the launching of the group operations in the Republic of Moldova.

Lia’s education includes the Faculty of Finances, Money and Banking within the Academy of Economic Studies in Moldova, the European Institute of Political Studies within the Council of Europe, Strasbourg, France and the School for Political Leaders within the Association for Participative Democracy.

Bulgarian average household income rose by a nominal 23.9% in December year-upon-year, as by the information published by the country’s National Statistics Institute (NSI).

The average household income stood at BGN 844.75 (431.78 Euro) in December, At the same time, expenditures sped up to an average BGN 769.26 (393.19 Euro).

Foodstuffs remain the highest expenditure of Bulgarian households, accounting for 39.1% of all spending. The second-largest expenditure are utility fees, which amount to 11.8% of all spending.

Individual income in Bulgaria stood at BGN 338.53 (173.03 Euro) in December 2007.

First, I would like to note a short fragment from a discussion carried on this theme. The person I have spoken with had recently graduated from a college of management and marketing and had never worked before. What do you consider to be a suitable job for you?… Well, I want to be a manager. Why do you want to be a manager? Well, because I will have a huge wage, a car, phone, laptop, and I will be important and people will respect me. And what do you think are the qualities a manager should have?… Well, to be tough with its employees, knowing how to control them, otherwise nobody will listen to, to tell them what to do and if they don’t listen to fire them. Yes, this is a part of a real conversation. Honestly, many times I get confused not knowing how to react in such cases: either to laugh out loud or to cry out loud.

2007 represented a fast grow year for Ascent Group, fact that is also confirmed by the financial results. At the end of the year, Ascent Group reports a 108% grow of the turnover compared to 2006, overcoming the initial forecast of the management of the group. At the beginning of the year, the management of Ascent Group estimated a turnover grow by 45% for 2007.

Another important grow was registered in 2007 in terms of number of clients. The portfolio grew by 34% compared to 2006.

2007 has also marked the conclusion by Ascent Group of some strategic partnership. Based on these partnerships the consulting group will represent in Romania the companies OCRA, Jordan Sheppard and Identity Compass.

Adela Cristea, managing partner of Ascent Group and Lia Bejenaru, manager of Ascent Group’s office in Chisinau participated a few days ago to a conference organized by Confindustria Catania.

The topic of the conference was: “Business Opportunities: Romania and the Republic of Moldova” being organized by Confidustria Catania in cooperation with Assoconsult Sicilia, Gruppo Strazzeri, Casa Italia Consulenza and Ascent Group.

The conference was attended by Sicilian business people interested by business opportunities in the 2 countries. Adela Cristea and Lia Bejenaru presented the legal and fiscal frame of Romania and Moldova as well as concrete business opportunities from different fields of activity.

Elena Ionescu was recently appointed as manager of Jordan Sheppard Romania. Jordan Sheppard Romania was established in November 2007 as a result of an association between the prestigious multinational company Jordan Sheppard Executive Search and the consulting group Ascent. The company offers high quality services in executive search and head-hunting to the companies interested in the improvement of the recruitment process for top and middle management positions.

2008 brought us many changes regarding both the level of some taxes and social contributions, and also the level of the minimum salary, on national economy level and also relate to some professional categories…

Considering these changes, the minimum salary on economy level in Romania has increased starting with January 2008 to 500 Lei, compared with 390 Lei in 2007. Based on the legislation changes brought by the Government Decision no. 1,507 issued on 12th of December 2007, the minimum gross salary on economy level will also increase again with July 1st 2008 to 540 Lei, in case that the main indicators on macroeconomic level, based on whom the budget is built, will be maintained (increase of the GDP, maintaining of the inflations within the estimated values, maintenance of the economic grow and work productivity).

Starting with January 2008 Bulgaria has a new 10% flat tax rate for individuals, replacing the 10%-24% tax rates in 2007.

The Bulgarian 10% corporate tax rate for 2008 remains the same as in 2007 and is positioning Bulgaria together with Cyprus among the lowest taxations within the European Union.

The VAT rate in Bulgaria for 2008 will remain 20%, the same as in 2007.

Exactly how attractive is Romania for the new comers of various industries we can anticipate by measuring the volume of FDI, before and after joining EU, as well as by considering the rhythm and dynamics of business on its territory during the last years.

And yet… how attractive is Romania for a new comer on the market? We could probably say that, apart from the legislation and political frame, taxation, reforms, level of corruption and other conditions considered by investors, what actually summarizes and concludes the relationship with the investor is the honoring of a psychological agreement…