Ascent Group – partner of the project Start Internship

Ascent Group supports this year, as partner, the START Internship program, developed in Romania by Junior Achievement.

In today’s labor market, students are hardly dreaming of a career and graduates have already entered into the race for getting a job. But their success depends very much on the practical skills and knowledge they learned. And unfortunately Universities in Romania offers still too few opportunities for students to get in contact with what is happening in the concrete business.

Technical unemployment was until recently a concept included in the Romanian Labor Code. After various legislative changes, however, the term “technical unemployment” was removed, and his place was taken by the expressions “suspension of employment” or “a temporary interruption of employment”. However, in common language, the phrase” technical unemployment” is still used when we want to refer to such interruption or temporary suspension of employment contracts.

Regarding the payment of salaries and social contributions during such period, the Government is trying to help the employers in this period, through the Emergency Ordinance no. 28/2009 published in 25 March 2009:

When an investor decides to start a business in our region, he usually can choose between a few countries: if they want to choose a country from the European Union, then they will most likely choose between Romania and Bulgaria, the last countries who joined the EU and also the countries with the lowest labour cost among the EU countries. In case they want to choose a country that is not an EU member, then Serbia and the Republic of Moldova seam to be the 2 best options.

However it is pretty difficult to make a choice in the end, given that each of these countries have advantages and disadvantages. So I proposed to make an overview of the main elements that take into account when an investor decides to start a business in one of these countries.

First, I tried to group in a comparative table the main types of fees and taxes, and the costs that an investor must bear in each of the 4 analyzed countries. Please see them below:

From the amount of 12.95 billion euros that Romania has borrowed from International Monetary Fund, it already received only 5 billion. The next part of 1.9 billion euros will get into our accounts on September 15.

However, it appears that the compliance with the International Monetary Fund mission is very difficult for Romanian authorities. The IMF evaluations shows that the bank field is going relatively well, but the problem is on fiscal – budgetary policy. In order to make it work we need reforms and to reorganize the social policies, pensions and the salaries law in the public sector.

Signing the agreement with the IMF, the Romanian state has undertaken to take measures to strengthen the public finances, the first measure being the gradual reduction of the budget deficit through strict control of public expenses. Once the IMF mission will visit again Romania and based on their conclusions it will be decided whether to release the next part of loan or not.

A new page of European Union history has been written once with the establishment of the first European institution with responsibilities in terms of monitoring developments in financial and banking markets and reporting the systemic risks.

The European leaders have decided the establishment of a new European institution – the Council for Systemic Risks – in response to the G20 Summit which took place in London, on April 2, when the participants have asked a better monitoring of economies in general and financial and banking markets in particular.

Ascent Group, in cooperation with the partner Jordan Sheppard, is currently deploying intensive efforts to identify the market’s most talented IT professionals.

Our client is a Service Provider for the European Union and the opportunities are aimed at young IT professionals who wish to access interesting and international IT career perspectives (the employer is Belgium based), either at a senior but also a more junior/entry level. Interested professionals can review enclosed a list of currently available positions.

The ability to speak fluently both English and French is essential. The applicants can send their resumes to email

The Governmental Ordinance no. 105/2009 repealed the provisions of Governmental Ordinance no 831/1997 in order to approve the common patterns forms for the financial and accounting activities and for the regulations concerning the way to prepare and use these forms.

Under the new regulations, the companies should consider the fact that the tax receipts issued with electronic tax devices under the Emergency Ordinance 28/1999 are documents that prove the payment and need to be attached to the cash flow register.

Introducing in the accountancy the purchased goods or the expenses made by companies and paid based on tax receipt (cash or card), is possible only if:

1. the company requires an invoice for delivered goods or for the carried out services, having in annex the tax receipts issued by the electronic tax device

or

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Minimis State grants represent one of the best financing solutions for small and medium enterprises. At the end of May the Government increased 20 times the grants schemes to enterprises, from five million to one hundred million, allocating 20 million euros for 2009.

Moreover, the Government also extended the number of companies fields of activity that may require such grants from the state, including mostly manufacturing: the production of textures, clothing, leather processing and footwear production, glass production and articles of paper.

These grants are offered for a period of three consecutive fiscal years, and the projects are supported 100% by the state budget.

Few months ago, the economic crisis was still, in the opinion of many, an excuse for companies to reduce costs, an “over-fed” issue by the press, a pretext for the Government not to increase the salaries in the budgetary sector, etc. Even among those who accepted the existence of a crisis, it dominated the view that it will be like a wave, which will last 5-6 months, will sweep some companies in the way, will sway some imbalances that were obvious to everybody, after which things will return “to normal” just as they were before.

Today no one doubts the reality and the depth of this crisis, that in fact affects all countries and all branches of economy at the same time, that it will be a lasting crisis and will take years for the things to return as they were in the summer of 2008. And in some fields maybe it will not ever return to those peaks.

article published in Tonica magazine

How many times dind’t you want to escape, even for one single day, from the crowded roadway from your job office and back, anyhow you were traveling: with your own car, subway, bus? How many times you dreamed to escape, at least for one single day, from the morning strict schedule of your office that you can not violate but extremely flexible in the evening?

And how many times you have wanted to be able to transform the perfectly ironing clothes, the dress perfectly matching with the makeup, the elegant hair or the heavy atmosphere from the office with a light toilet – pajamas or robe and with a nice music loud enough for a perfect relax ?

Seems like a dream, but today’s technology allows us to enjoy and to forget, whenever we want, the never ending timetable from the job, the crowd and the enforced dress code, if we decide to work from home.

On 18th of June 2009 took place in Bulgaria, Ruse the „No Borders” event, a Romanian – Bulgarian bilateral business meeting organized by Ascent Group in partnership with UNPR – National Union of Romanian Employers, BRCCI – Romanian–Bulgarian Chamber of Commerce and Industry and the magazines Manager Bulgaria and Consulting Review Romania.

Bulgaria and Romania, two neighboring countries separated by borders several decades that remained now only symbolic, gathered in No Borders event all their business potential and colaboration interest. No Borders event aimed to encourage the cross-border cooperation and investments, to facilitate the neighboring market acces and to stimulate business partnerships for both countries companies.

Due to the fast grow of Ascent Group’s Bulgarian office, starting with May 2009 Katya Sotirova-Ivanova joined Ascent Group‘s team and became managing director of the consulting group in Bulgaria.

Katya graduated the Faculty of Mathematics and Information Technology within the University of Economy from Varna and the Distance Learning Center from Sofia of the City University from Seattle Washington, with a degree in General Management.

Katya’s 10 years of successful professional experience include management positions in various industries, especially marketing and advertising, media and consulting or coordination of complex business projects and events.

After 3 years as Marketing & Product Director and also Deputy of CEO for Programata Media Group Ltd, since 2006 Katya became the managing partner of Innovatoria Ltd., an important marketing and advertising company.

Starting with 1st of May 2009 a few important changes of the Romanian Fiscal Code became effective, through the Emergency Ordinance 34/2009. We present below the most important elements that have been changed.

Introduction of the lump tax rate

One of the main news brought by the Emergency Ordinance 34/2009 is reffering to the introduction of a new type of taxing, the lump tax rate.

In this respect, was introduced for the Romanian legal entities, payers of the taxable profit, the compulsoriness to determine the quarterly tax by comparing the quarterly income tax with the minimum quarterly lump tax rate and the income payment at the higher amount.

To apply the lump tax rate, the amounts corresponding to the minimum tax, determined according to total income registered on December 31st 2008, are:

Starting with the 1st of July 2009, all the companies who are trading within the European Union will have to obtain an unique code for customs operations, called the EORI code.

The legal provisions that define the EORI code are contained in Regulation (EC) no. 312-2009 and are part of the stipulations of the Council establishing the Community Customs Code, published in EU’s Official Journal no. L 98 dated 17 April 2009.

The procedure for obtaining this code in Romania is regulated by the Order of the President of the National Agency for Tax Administration no. 691/2009 for the approval of the Technical Norms regarding the registration and identification of economic operators in Romania.

Ascent Group concluded in May another important partnership agreement, with MECEPUS, the Mediterranean Center for Public Speaking and Communication.

MECEPUS is a training centre supplementing formal education by giving the opportunity to improve speaking skills and develop a more attractive personality. It offers a range of seminars in Public Speaking and other behavior improvement areas.

MECEPUS Seminars are held in Cyprus, Syria and the Middle East and Moldova in English, Greek, Arabic and other languages.

The law 31/1990 was amended again in April bringing one of the most important changes in the Romanian fiscal environment. In case of voluntary dissolution and liquidation of companies, the process can be done now without a liquidator.

Thus the article 227, paragraph (1), points b) and d) of Law 31/1990, updated on 17.04.2009, describes the procedure of voluntary liquidation and dissolution without assigning a liquidator.

This procedure spares the trader of the need to assign an authorized liquidator to draw up the report of liquidation. Also, this procedure eliminates the stage of publication in the Official Gazette of the liquidation balance and report.

The simplified procedure assumes through 3 stages, which are present below:

Stage I

Costs of doing business in Bulgaria are about 46 percent lower than the average in the EU, said Petar Dimitrov, Minister of Economy and Energy, quoted by the Bulgarian Telegraph Agency (BTA). On March 5, he called on participants in the Bulgarian Business and Investment Forum to invest in the country, as the cheapest place to invest in the European Union.

Factors that make Bulgaria attractive for investments in times of a global economic crisis are the low labor costs and taxes. The social security burden in the country ranks fourth in the EU.

Starting with January 2009 Ascent Group has signed a strategic agreement with the famous American specialist in research and promotion of the entrepreneurship and innovating solutions in business – Larry Farrell. Based on this agreement Ascent Group will represent exclusively The Farrell Company in Romania, Bulgaria, Serbia and Republic of Moldova for training and consultancy services on entrepreneurship.

Larry Farrell is a world wide authority, being deeply involved on spreading the entrepreneurial spirit all over the world. He presented the entrepreneurship principles in front of more than 1.3 millions of professional individuals, organizations and government.

Under “normal” economic conditions and moreover in economic and financial crisis context, outplacement, as a way to support future ex- employees fully proves its usefulness.

Defined as a consultancy service dedicated both to employees and employers, meant to ensure a smooth transition to a new job, respectively a new organizational structure, outplacement very well points out an ethical approach that companies must prove in difficult times.

On the development route of a company, critical moments can sometimes arise, when in order to remain competitive on the market the company must downsize its personnel or part (from different reasons) with some members of its team, including members of the managerial team. In these situations benefiting from external, specialized consultancy services is ideal. I would name only a few reasons: objectiveness, confidentiality and expertise.

As a company, we consistently care about our customers, which are în their turn other companies. We are concerned with their work – helping them in business development – , with their activities – legal or accounting – , with their people – through the management of human resources, training and evaluation.

In many trainings made at the client I tackle themes as team management, personnel motivation, leadership, conflict, organizational communication. Recently I asked myself if the managers I work with and train have somebody to the other end of the relationship. Who are their employees? Are they ready to benefit from the training of their managers? Perhaps all the actors involved in these situations requires a type of training, preparation to fully benefit of information, new skills and attitudes.

Today the English language has become an indispensable way of communication in business. And more, the most of us, those that activate in various areas related to business environment, claim that we speak English.

But how many times we asked ourselves if the English we are talking day by day is appropriate to the business environment, or rather is an academic English more appropriate to the academic environment in which we grow?

How many of us had the feeling, coming out of school that the English taught in school is somehow different from the one we need to effectively manage our business or simply, different from English that we need daily.

In this respect, there is now the possibility to assess our ability to communicate in English, or to test the English knowledge of our employees, using a method very known at the international level – the TOEIC test.

Starting February this year, Jordan Sheppard launched new services in Romania. The new services are ”Outplacement” and an innovative service named ”Business Intelligence” from HR perspective.

The outplacement services aim at companies which are on their way to downsize part of their personnel and to part with specific members of their managerial team, as adaptation through low costs and efficiency at crisis time. The beneficiaries of this service are especially the downsized employees, who receive in this way professional consultancy for identifying new hiring opportunities and for positively overpassing this difficult period, in terms of social and psichological consequences.

Changes in the social insurance and tax burden in Bulgaria which took place at the beginning of 2009 include a decrease in the mandatory pension contributions owed by employer and employee and an increase in the mandatory health contributions. The reference income maximum remains the same as last year, or BGN 2000. It was brought to that level in 2008, after being fixed at BGN 1400 in August 2007. The 10% proportional income tax for employees remains the same.

As a result of these changes the social insurance and tax burden for gross salaries of up to BGN 2000 has fallen, from 36.2% на 30.3%.

2009 started in Romania in force, with plenty of news.

Besides the economic crisis is being felt more and more, creating a turbulent economic environment, we have a new Government, which from the first steps took many decision, contested and generating multiple changes. Last but not least, from the 1st of January 2009 many legislative changes shall became effective, some already approved in previous years, but which take effect only after that date, others very fresh.

I will therefore try to review the main changes brought by the beginning of 2009 which are affecting the business environment.

In the following period, an International Monetary Fund (IMF) mission will come to Bucharest in order to evaluate the macroeconomic situation and to initiate the discussions with the view to conclude a support agreement to cover the financing deficit in 2009.

Economic forecasts for this year look pretty bad, and Romania needs external funding. This funding is needed to cover the external deficit and the budget deficit having in view the strong decrease of foreing direct investments, direct investments in productive assets by companies incorporated in foreign countries and decrease of the revenues at the state budget.

According to the latest estimations, the budget deficit at the end of the year is about 5% of GDP and external deficit increased in October to 14.4 billion euros, being almost 11% higher than after ten months of 2007.