RCS&RDS LAUNCH MOBILE PHONE SERVICES IN ITALY; SEE NEWS ON PAGE 5 NEWS
LINKS
BALANCE
Naspers-owned Allegro has bought an 83 percent stake in Gecad ePayment. Radu Georgescu, founder of the company, will continue as part of the management board See page 4
Romania’s ability to access and use European funds is still not at its optimum level, and analysts warn the country’s public sector is in danger of falling behind See page 9
A new wave of young designers with a flair for alternative means of reaching their audience is taking over the local fashion scene See pages 12-13
BUSINESS REVIEW
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ROMANIA’S PREMIERE BUSINESS WEEKLY
OCTOBER 18 - 24, 2010 / VOLUME 14, NUMBER 38
SOUTH OF THE BORDER, DOWN BULGARIA WAY
see pages 10-11
COURTESY OF ANDRA MOCLINDA-BUCUTA
Fiscal stability and predictability are always high on investors’ agenda, but the government’s recession strategy is sending more and more local firms – around 2,500 by some estimates – to register in Bulgaria in hope of lower taxes and less red tape
THIS WEEK BUSINESS REVIEW
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EVENTS
October 26
What we are working on OTILIA HARAGA, Senior Journalist...
é Business Review organizes the
is
Fiscal Litigations event at Ramada Plaza Hotel.
preparing
an
overview on the latest launches made
October 28 é Business Review organizes the
Energy - Focus on Power event at Howard Johnson Grand Plaza Hotel.
by IT&C retailers.
CORINA DUMITRESCU Journalist... is writing an article on the rebranding of
November 4
local products.
é Business Review organizes the
Russian Business Forum at Ramada Plaza Bucharest.
Finance Ministry employees protested throughout last week,
SIMONA BAZAVAN Journalist... is working on a piece about social unrest in Romania and the government’s austerity measures.
November 18
bringing institutions across the country grinding to a halt. The
é Business Review organizes the
Risk Management event.
workers were revolting against the government’s decision to axe AGERPRES
their performance bonuses.
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New Tax & Law event to cover fiscal litigation
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sues (compliance with various legal requirements, refusal or delay in issuing permits, authorizations and approvals), bankruptcy-related litigation (insolvency procedures, settlement opportunities, restructuring and reorganization opportunities, debt collection and liquidation), corporate disputes and commercial litigation as well as tax issues. Topics to be discussed include: Application of EU law in tax litigation; Practical aspects regarding the stages of a tax inspection; Insight into court pracA new event in the Tax & Law series tices during tax litigation; and Practical isfocusing on fiscal litigation will kick off sues concerning the contestation and suson October 26 at Ramada Hotel. The event pension of the enforced collection of tax will take a look at how companies can bet- liabilities. Zamfirescu Racoti Predoiu is ter manage contentious administrative is- partnering BR for the event.
BUSINESS REVIEW / October 18 - 24, 2010
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3
NEWS
Allegro buys 83 percent of GECAD ePayment
Allegro, part of Naspers Ltd, has become the major shareholder of GECAD ePayment. The transaction was completed in August but the two companies did not disclose its value. This is the second acquisition Naspers has made on the local market, after acquiring the autovit.ro site for approximately EUR 5 million. This time, Allegro – which has been advised by a team from DLA Piper law firm, led by country managing partner Marian Dinu – has acquired a majority 83 percent stake in GECAD ePayment, a leader in supplying integrated e-commerce solutions on the Romanian market. The other shareholder in the firm is Or-
4
COURTESY OF AVIVA
LAURENTIU OBAE
Radu Georgescu
bitview, which holds 17 percent of the company, while Radu Georgescu (in picture) remains part of the management board. From now on, however, Daniel Nicolescu will be CEO of GECAD ePayment. “Allegro has extensive experience in e-commerce, with operations on most large markets in Central Europe. I am convinced that this association will be, first of all, to the benefit of GECAD ePayment clients. I will continue to remain involved in the company’s activity, as I have been until now,” said Georgescu. Before the acquisition, the Avangate division of GECAD ePayment, an international supplier of solutions and services for electronic software distribution, became a separate entity. The shareholding structure of Avangate, which is based in the Netherlands, has remained unchanged: Orbitview Ltd holds 99 percent of the capital while Georgescu has 1 percent. GECAD ePayment posted a turnover of EUR 2.4 million and a gross profit of EUR 700,000 last year. Otilia Haraga
Aviva registers 21 percent increase in assets since 2009
Mihai Popescu, CEO of Aviva Romania
Aviva has announced that it has invested RON 243 million in its 10 years of activity in Romania, with a RON 30 million increase in social capital for this year. Company officials said that Aviva currently administers assets worth RON 600 million in Romania, a 21.4 percent increase compared to last year. Aviva entered the private pension market in 2007, and is now in charge of the pensions of 375,000 Romanians. The company has 50,000 life insurance policy holders. Capital Garantat (Guaranteed Capital) investment, part of the unit-linked insurance plans,
has achieved a 10.6 percent growth in the last 12 months and an annualized return of 16 percent since its launch in 2000. “The insurance market has grown constantly since 2000; however, its true potential is far from being reached. In spite of the economic crisis that we are going through, or perhaps because of it, people have understood that it is time they did something for their financial future, as nobody else will do it for them,” said Mihai Popescu, CEO of Aviva Romania . The CEO added that the company’s current priorities are business development as well as organic growth. Aviva’s most important investments now consist of infrastructure, technology and its direct sales force. The firm ranks fourth in the local insurance market with gross premiums worth RON 101 million in 2009, a 5 percent decrease compared to 2008. The insurance market dropped by 13 percent in 2009. Aviva holds a market share of 6.3 percent. Corina Dumitrescu
BUSINESS REVIEW / October 18 - 24, 2010
NEWS
RCS & RDS launches mobile phone services in Italy
Romania keen to partner Gazprom in South Stream project
COURTESY OF GAZPROM
RCS&RDS hopes to tap a market of around one million Romanians living in Italy
RCS & RDS has launched Digi Mobil telecom services in Italy, which is home to more than 1 million Romanians. The operator launched similar services in Spain in 2008. Customers can access mobile services through a prepaid Digi Mobil Italy card, which costs EUR 5 (no VAT) and includes 300 minutes which can be used to talk within Digi mobile networks in Romania, Italy and Spain and within fixed telephony
BUSINESS REVIEW / October 18 - 24, 2010
network Digi Tel in Romania. For phone calls to other fixed and mobile networks in Romania the charge is 5 cents per minute. Prepay cards are on sale in Italy from authorized Digi Mobil distributors. Digi Mobil Italy will also be developing a distribution network of Romanian stores. RCS&RDS posted a turnover of nearly EUR 400 million in 2009. Otilia Haraga
Alexey Miller, Gazprom chairman
Russian natural gas producer Gazprom has inked a memorandum of intent with the Romanian authorities in the event that the South Stream pipeline transits Romania, said Alexey Miller, Gazprom chairman. Gazprom has already completed feasibility studies for all the countries included in the project and is now drawing up the technical-economic
study for the entire scheme, Miller told Mediafax news agency. The 900-km South Stream pipeline is likely to transport some 63 billion cubic meters of natural gas on an annual basis. The project is seen as a rival to the planned Nabucco pipeline, in which Romania has already committed to participate. Nabucco is predicted to deliver about 31 billion cubic meters of gas annually from the Caspian Sea to Central Europe via Romania, bypassing Russia. Both projects are estimated to be operational in 2015. During the Bucharest meeting, Miller said that Gazprom would send a team of experts to Romania to analyze the opportunity of a joint venture with local gas producer Romgaz. Romgaz is Romania’s largest natural gas producer and distributor. The company sold 35.7 million MW/h of natural gas in the first half of 2010, up 19 percent on the year before. The Economy Ministry controls 85 percent of the firm. Dana Verdes
5
NEWS
Optimism about companies’ financial outlook grows, Deloitte survey finds Romania has seen the most significant improvement in sentiment regarding companies’ financial outlook, according to the fourth edition of the Deloitte Business Sentiment Index (DBSI), with 63 percent of interviewed executives voicing optimism. This represents a nearly 48 percent increase since the first survey in September 2009 and is more than three times higher than reported by the previous edition of the survey, published in April. Romania also saw the biggest positive change in sentiment regarding credit availability, with 87 percent of executives feeling that it is now available, compared to 53 percent six months ago. This is the largest share of optimists among the six countries surveyed: Romania, Poland, Hungary, the Czech Republic, Slovakia and Croatia. The country also showed a consistent improvement in sentiment regarding future revenue from sales, with the number of optimists increasing from 38 percent (September 2009) to 60 percent. Similarly, Romania recorded an increase in positive sentiment about new launches: 60 percent of respondents believe that they will be launching new products or services over the next year, a level of optimism similar to that recorded in September 2009, the survey found. For the first time since the launch of the survey, Romania’s employment outlook has considerably improved, with 23 percent of respondents saying they were considering expanding their workforce, up 15 percent since September 2009. Meanwhile the percentage of respondents considering reduc-
ing their workforce has gone down from 43 to 30 percent. “These findings confirm an earlier report by Deloitte Romania in June (the second edition of the CEO Survey): most companies have completed the stage of cost-cutting measures and immediate remedies for the financial downturn. More and more executives are now thinking about the future, planning to increase revenues, add new products and services, or expand personnel,” said George Mucibabici, chairman of Deloitte Romania. “However, while they are bullish about their companies’ own potential on the market, there are still concerns about the health of the economy as a whole.” As in previous surveys, executives continue to view the prospects of their country’s economy more negatively than their companies’ own financial prospects. In Romania, 36.6 percent of interviewed executives now predict that the country’s economic prospects will improve over the next six months, down 10 percent from April. At the same time, 33.4 percent of respondents expect their prospects to deteriorate, up from 26.6 percent in April. When asked their expectations regarding changes in the regulatory environment over the following 12 months, Romanian respondents showed more pessimism, with 33 percent expecting a more restrictive environment, compared to 23 percent six months ago. However, optimism has also grown, with 20 percent expecting less restrictive regulations over the next year (compared to 7 percent, in April). Otilia Haraga
Scala JWT and Cohn&Jansen merge Ad agencies Scala JWT and Cohn & Jansen will merge, with the new shareholding structure including all the owners of the initial companies: Petra Hoyos, Andrei Cohn, Cristina Jansen and Peter Jansen. The cumulated turnover of the resulting agency stands at EUR 1.8 million and comes exclusively from agency fees. The new outfit will employ 50 people. The owners attributed the decision to merge to strategic business reasons and personal affinities. “On the one hand Scala JWT has several international clients in its portfolio, and JWT is one of the most power6
ful networks in the world (…) Cohn & Jansen is a solid local agency, with a big creative reputation, having mainly local clients in its portfolio. So we complement each other,” said Hoyos. The new managerial team will include Alina Tudose (pictured) as managing director, Cohn as creative director, Demetra Garbaseveschi in the role of head of business development and Georgeta Petrescu as chief financial officer. The agency will offer integrated services: strategy, creation, digital and direct marketing. BUSINESS REVIEW / October 18 - 24, 2010
WHO’S NEWS / CALENDAR
EVENTS, BUSINESS AND POLITICAL AGENDA OCTOBER 19 é 15:00 – SAP Romania organizes a press conference as part of the SAP World
Tour 2010 at JW Marriott Bucharest Grand Hotel. By invitation only.
OCTOBER 20 é 10:00 – Alinso Group organizes a press conference for the opening of the Euro
Gate terminal in Ploiesti. The event will take place at Athenee Palace Hilton Hotel. By invitation only. é 11:00 – Lafarge Agregate Betoane and WWF Romania organize an event for the official launch of ecological reconstruction works for the “Zona Matasaru – O noua viata pe malul raului Arges” project, in Dambovita county. By invitation only. é TotalSoft organizes a press conference to announce its financial results for the first three quarters of 2010 at the Radisson Blu Hotel. By invitation only. é The NESsT 2009-2010 Social Enterprise Competition gala will take place at Sala Dalles. By invitation only.
OCTOBER 21 é Centrul Medical Unirea organizes a new edition of the European Bahá’í Busi-
WHO’S PETRE BUTU is the new VP of the power division at Schneider Electric Romania, effective from September of this year. He is a graduate of the Bucharest Polytechnic University, and defended his dissertation at the École Supérieure d'Électricité in France. Butu has been working in the energy sector for over 15 years, and has held various positions such as industry market manager and pricing policy manager for Europe at Schneider Electric.
ness Forum (EBBF) conferences at CMU Baneasa. By invitation only.
OCTOBER 26 é 11:00 – Salans organizes the "Tax Incentives for Business in Central and East-
ern Europe" free online seminar which will be hosted by Salans experts from Romania, Poland, the Czech Republic and Hungary. Register now for free and reserve one hour at www.salans.com/webcast .
OCTOBER 27 é 19:00 – The Dinu Patriciu Foundation organizes the Education Awards Gala at
the Parliament Palace. By invitation only.
Old Town Bistro owner Marc Rigonat opens new pub in Decebal Marc Rigonat, owner of Old Town Bistro in Bucharest’s Lipscani area, has opened a new location near Piata Muncii, on Decebal 29. Bourbon is part of a national franchise, with an estimated 22 cafes across Romania. The French businessman is considering future investments in Bucharest’s more upmarket areas and is not planning on leaving Romania in the near future. Old Town Bistro, a renovated venue, was opened in April, after a EUR 45,000 investment, a sum that Rigonat aims to recover in a year and a half, maximum, and even make a profit. The average turnover so far is RON 55,000. Old Town is also preparing to undergo a reconfiguration from November on one or two days per week, during which the 70-sqm cafe will morph into a more club-like location. Bourbon, part of the Bourbon Cocktails and Coffee franchise chain, opened a few weeks ago and is attracting an average of 100 customers per day. The 280-sqm location focuses on lounge and cocktail music. Besides beverages, it serves various light meals. Karaoke will feature in the fuBUSINESS REVIEW / October 18 - 24, 2010
ture, along with other special events still being organized, intended to increase sales by 50 percent. The initial investment made by Rigonat in Bourbon is EUR 60,000, which he hopes to recover in two years’ time. Rigonat, who has been in Romania for two years and has experience in the HoReCa sector through his two venues opened this year, says that Romanians are “more civilized and respectful” than his French compatriots as clients. Regarding purchasing power, Rigonat believes that Romanians and French are equal, at least in terms of price – “you turn EUR into RON and obtain the same results,” says the Frenchman. As for future investments, the businessman is planning on developing in the more luxurious areas of Bucharest, hoping to open new venues in Dorobanti or Amzei in a year’s time, as rents will decrease by half. For 80 sqm, the rent in Amzei area is around EUR 6,000, Rigonat says. In the Lipscani area, a realistic rent is EUR 20 or 25 per sqm. Corina Dumitrescu
MIHNEA VASILIU, 44, has been appointed GM of Ringier Romania. He is taking over from Marius Hagger who has decided to leave the firm.Vasiliu will assume his new position in mid-November and report directly to Florian Fels, CEO of Ringier Central Europe. Vasiliu has extensive knowledge of the Romanian media market. Currently he is executive director of Realitatea Media Group in Bucharest and he previously served as CEO of the Romanian Media Pro Group.He holds a degree in Electronic Engineering from the Poly-
NEWS technic Institute of Bucharest and an Executive MBA from the London Business School. MARTIN SCHULDT has been appointed GM of Cargill Romania. He is taking over from Nese Tagma who will relocate to Belgium to lead the company’s oil bottling operations in Europe. An experienced Cargill executive, German Schuldt has been living and working in Romania since 2005 and is currently managing local operations related to cereals and oilseeds. LIVIU VOICU is the new CFO of Ambient. He has had 14 years of professional experience working for companies such as A&D Pharma Group where he served as deputy chief financial officer, group reporting and accounting director and group reporting manager. Voicu has also worked for Automobile Bavaria as financial manager and for Ernst&Young and Arthur Andersen as an auditor. He holds a bachelor’s degree in business management from the Luther College University in the US.
Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Feel free to contact us at editorial@business-review.ro
Germany to lift restrictions on seasonal workers as of next year, says PM Germany will lift restrictions on seasonal Romanian workers as of January 2011, said Prime Minster Emil Boc, according to Mediafax newswire. The announcement was made at the end of an official meeting with German Chancellor Angela Merkel. The subject of Romania’s joining the Schengen area was also discussed, with Merkel stressing that this should be entirely contingent on the authorities’ capacity to secure the borders. “The issue of Roma integration is not among the conditions to join the Schengen area. What is important is the guarantee that the technical conditions for the security of the EU’s ex-
ternal borders are met,” said Merkel, quoted by Mediafax. In his turn, Boc assured Merkel that Romania would pay its debts to private companies and that the government would continue to support investors thorough fiscal incentives like the flat tax and by developing publicprivate partnerships. Merkel visited Romania for the second time last week after a first visit in 2008 for the NATO summit held in Bucharest. The German Chancellor had discussions with Prime Minister Emil Boc and President Traian Basescu. This year Germany and Romania celebrate 130 years of diplomatic relations. Simona Bazavan 7
TAX&LAW
The story of an unforgettable summer, which kept the Romanian taxpayers alert TAX&LAW By OANA ELENA NASTA Partner BANU RACLARU & NASTA
At the beginning of this summer, the Government adopted the Emergency Ordinance no 58 / 26.06.2010, which disrupted the universe of both freelancers and employers, who for reasons of cost reduction in recent years, have preferred to pay their employees by intellectual rights agreements or by signing contracts with authorized individuals. Ordinance 58/2010 completed Article 7 of the Tax Code with two new paragraphs that added criteria for reconsideration of an activity as being dependent. One of these criteria -“any other items that reflect the nature of dependence of the activity” - has been expressed in very general terms, this being open to interpretation and abuse. The result of reconsideration of the activity is that income tax and compulsory social contributions are recalculated and paid exactly as in the case of wages earned from jobs outside the main occupation. Both the income payer and the beneficiary are jointly responsible for payment. Also, Ordinance 58/2010 provided that any professional-related income other than salary is liable to income tax rate, and that beneficiaries have to pay individual contributions for social insurance, health insurance and unemployment insurance, the base from which contributions are calculated being limited to five average gross salaries. Since the publication of the Ordinance, everybody was waiting for the adoption of methodological norms for implementing Tax Code with the hope that it would limit the criteria for reconsideration of an activity considered dependent, and for clarifications concerning the issue of mandatory social security contributions for intellectual rights and professional activities. In August the Government 8
adopted Government Decision 791/2010 regarding the approval of the methodological norms for implementing the Emergency Ordinance 58/2010, but faced with the protests generated by this, on 10 September the Emergency Ordinance 82/2010 issued by the Government tried to fix things. By Ordinance 82/2010, the criterion for consideration of an activity as being dependent – consisting of “any other items that reflect the activity’s nature of dependence” has been removed. However, the other criteria have been kept, namely: a)The income beneficiary is in a relationship of subordination to the payer of income, the governing bodies of the payer of income respectively, and obeys the working conditions imposed by it; b)In performing work, the income beneficiary only uses the devices and materials of the payer of income and contributes with physical performance or intellectual ability and does not invest his personal capital. c)The payer of income pays for the travel expenses of the income beneficiary d)The payer of income pays for the annual leave allowance and for temporary disability allowance, on the beneficiary’s account. Also, by clarifications made on 09/10/2010 (doctors, lawyers, notaries, auditors, tax consultants, expert accountants, certified accountants, securities investment consultants, architects, and other professions regulated) and copyright / related intellectual rights have escaped the risk of being reconsidered as dependent activities and being taxed like wages. In terms of contributions due for professional income, Ordinance 82/ 2010 eliminated the contribution of health insurance out of the contributions covered. Also, for those who have insurance in different systems other than the public insurance (such as lawyers), and for pensioners, things have become more clear, in the sense that for them provisions of Ordinance 58/2010 as amended, do not apply.
The provisions of the Ordinance 82/2010 apply to those who get income from copyright / related rights and / or civil conventions, defined as income of a professional nature. They owe individual contributions for social security and unemployment insurance. For copyright / related rights contributions are due as follows: a)By individuals who, occasionally earn such revenue exclusively of this nature; the calculation base cannot exceed 5 times the average gross wage; b)By people who, besides the salary, regularly get income from intellectual property rights or related rights, as well as by people whose regular income is based solely on royalties. The calculated base is represented by gross income minus deductible expenses – standard rate of 20% or 25% for monumental art. The obligation to declare, calculate, withholding and payment of contributions is bound to the professional income payer, less unemployment insurance if the income beneficiary is insured under a contract of insurance in force. No social security contributions and unemployment insurance for such income of professional nature are due by persons who occasionally earn income from royalties and related rights besides salary. “Occasional Revenues” are defined as income received as a result of carrying out activities only sporadically, without having a regular character. For incomes from civil conventions the basis of calculation is based on monthly gross income and the monthly calculation base cannot exceed 5 times the average gross wage. For this income, distinctions based on whether occasionally or repeatedly or parallel wage gain, do not apply. It is possible that this omission be intentional and not just a slip. These aspects remain to be clarified through joint Orders issued by the Minister for Labor and the Minister for Public Finance, who are empowered to instruct on the implementation of the Ordinance. The provisions of the Ordinance
82/2010 apply to payments made after the entry into force. The amounts paid to this date based on the Emergency Ordinance 58/2010 are not subjected to the new provisions, except if they come from extra money paid for exceeding the maximum provided for the calculation base by the Ordinance 82/2010, which amounts will be returned or compensated on demand. Ms. Oana Elena Nasta is Partner at BANU RACLARU & NASTA, her practice focusing mainly on Civil Law, Commercial Law, Contracts, Taxation, Transport & Shipping, Banking and Finance,Competition and state aid, Mergers & Acquisitions and Litigation. Ms. Nasta graduated from the University of Bucharest (1995) as Bachelor in Law. She is member of the Bucharest Bar Association (1999) and a Senior Lawyer since 2002. oana.nasta@brnlegal.ro
BANU RACLARU & NASTA is a law firm with boundless practice and tradition in offering personalized services. We are privileged to bank on the vast and thorough business consulting experience and expertise of our partners and associate lawyers. At BANU RACLARU & NASTA we offer legal assistance from highly credentialed lawyers, all dedicated to our core values: ●
Creativity – Innovative approach in rendering legal services;
● Additional value to your business; ●
Trust and dependable partnership;
BUSINESS REVIEW / October 18 - 24, 2010
LINKS
Romania struggles to clear the funding fence
Otilia Haraga The rate of absorption of structural funds for 2007-2010 is 13.48 percent, according to data released by the Ministry of Public Finance in September. “The fundamental problem of the absorption process is to understand its structural stages,” Laurentiu Dinu, general manager of Accreo Romania, tells Business Review. He explains that first there is the external absorption process in which funds from the community budget are transferred to the member state. Then there is the internal absorption process in which funds for projects are transferred to companies for implementation. “Unfortunately, at this point, in Romania’s case it is this last segment – which is responsible for bringing funds to the real economy – that is slow,” says Dinu. “An example is the difference between the value of the signed projects, which represents 72 percent of the 20072010 fund allocation, and the value of payments made to the beneficiaries, which represent just 13 percent of that sum.” So far, the operational programs that have been the most successful in attracting funds are the Regional Development Programme, the Human Resources Development Programme, the Increase of Economic Competitiveness Programme BUSINESS REVIEW / October 18 - 24, 2010
AGERPRES
An inability to attract European funds could be putting Romania at a disadvantage compared to other member states. Procedures need to be simplified and some stipulations should be left out to enable better access, say experts. BR takes a look at the problems Romania may face if it fails to attract enough European funds and what hurdles companies are running up against on the path to EU financing – as well as some of the most common frauds being used to siphon off cash.
and Environment Programme. However, judging by the needs or the degree of development, all the sectors that are defined in the POS (Sectoral Operational Programme) are in dire need of investments, says the GM. What will happen if Romania fails to attract enough European funds? Dinu says that a member’s state inability to adjust to European policies brings two types of costs: opportunity costs, meaning chances that have not materialized, and explicit ones. “During the pre-accession period, Romania bore significant costs to observe the standards imposed by the European Union – adopting the community acquis, re-structuring the economy, opening the markets. These are ongoing because the community acquis evolves permanently. Apart from these costs, Romania also contributes annually to the community’s budget. Romania gave EUR 1.1- 1.4 billion a year from 2007-2010. “If it fails to attract European funds, Romania will be in the situation of being a net contributor in its relationship with the EU. In real economic terms, our companies will have to be competitive on the internal EU market without benefiting from the help of instruments that other European companies benefit from,” says Dinu. He adds, “In the case of the public sector, if Romania fails to attract EU funds, the obvious result is condemnation to under-development, since there can only be so many national resources.” Among the aspects that can hinder a
company’s access to European funds is the requirement that the respective firm posted operational profit during the previous financial year, which according to Dinu, represents a significant barrier to access to financing.
“There is a need on the market for a mechanism so that criteria of the banks are similar to those used by the management authorities of the POS in order to reduce the risk that an eligible project which obtains public financing does not enjoy the support of financial institutions,” he says. Often, applicants can become entangled in procedures that are too complicated, which should be simplified. States like Poland, which joined the European Union before Romania, have already simplified their procedures in order to offer easier access to financing. “The simplification of procedures is just the tip of the iceberg. They reflect the way in which the administration system in a state works. And they condition each other. So the sustainable solution, even though it requires a longer implementation period, requires a screening of the procedures and national legislation and making the system more efficient,” says Dinu. Less intricate procedures and greater overall efficiency will bring immediate gains for the beneficiaries, who will be spending less on preparing their file, their analysis time will be shorter and the attraction of funds will be more efficient.
Frauds involving European funds é Since the beginning of the year, the Fight Against Fraud Department (DLAF)
has solved 34 files out of 130 that are open, according to data that the DLAF provided to Business Review. é In 2009, the DLAF had 107 cases under way and 75 were finished. Of the cases in which the DLAF found suggestions of fraud, nine showed up irregularities and in 41 cases the suspicions turned out to be unfounded. Frequently-used fraud modus operandi é forging accounts to hide obligations to pay outstanding taxes or social contributions é counterfeiting fiscal documents to hide that the company is insolvent é filling in false data in non-reimbursable financing applications regarding the firm’s experience in a certain domain é forging the company’s history regarding professional experience in the respective field and even introducing some non-existent key experts in projects é forging the application for non-reimbursable financing by introducing inflated expenses based on non-existent financial bids in order to obtain financing that is higher than the real implementation value Modus operandi in cases that divert the funds é false evaluation of bids by the evaluation commission é faking offer requests and offers from non-existent companies é introducing into the acquisition procedure companies that have not consented or did not take part in the auction é hiding conflicts of interest between bidding firms and members of the evaluation commission é faking signatures of people who never took part in activities in the project é billing for non-existent services é faking professional CVs é ordering financial auditing to cover fraud aspects regarding the use of the allotted funds 9
FOCUS
Fiscal bumbling drives small investors south to Bulgaria
COURTESY OF ANDRA MOCLINDA-BUCUTA
More than the actual taxes themselves, fiscal stability and, above all, predictability are key requirements when planning an investment and running a business, any manager will say. The government’s recession strategy, however, seems to lack both these qualities, sending more and more local companies south to neighboring Bulgaria, which, tax specialists say, promises lower taxes and less red tape. Dana Verdes and Simona Bazavan Back in July, following the government’s decision to hike VAT to 24 percent, Ioan Niculae, owner of InterAgro, one of the leading Romanian groups of companies, made the staggering announcement that he had decided to take his business to Bulgaria. InterAgro already had strong commercial and business connections on the other side of the Danube. Three months later, after President Traian Basescu reproached Niculae, he backtracked and company representatives told BR that there were no actual plans for relocation. “The group will remain one of the big taxpayers in Romania. We consider this a duty towards the Romanian state which we will never shirk,” company officials confirmed. However, many smaller local firms have a different perspective when it comes to paying taxes, and lured by the promise of less red tape and lower taxation, are moving their business to Bulgaria. No official data is available, but according to Bulgarian media reports as many as 2,500 Romanian companies have switched sides so far and the trend is confirmed by tax specialists. “Indeed more and more companies are considering relocating their business to Bulgaria manly due to the favorable tax environment in this country. Taxation is very important in the investment decisionmaking process as it represents a business cost, irrespective of the type, size or geographical location of the business,” Ramona Moisa, corporate tax manager at Deloitte Tax, told Business Review. 10
More and more small Romanian companies have started registering their business in Bulgaria, lured by lower taxes
Business lawyers echo Romanian firms’ hopes of profiting from lower taxes south of the Danube. “There is increased interest from small Romanian companies (active for example in the automotive and construction sectors) to shift their activity to Bulgaria because of lower VAT, income tax and social security costs. Big players do not relocate as often. However, the fiscal regime is a top concern in a decision to invest,” Monica Iancu, senior associate with Peli Filip law firm, told BR. Setting up a company in Bulgaria has become an option for many firms in need of fiscal warehousing, explained Marius Stancescu, president and founder of Riff Holding International, as the legislation for this activity in Romania has been changed. The Bulgarian town of Ruse, only 65 km away from Bucharest, has become a top destination for fiscal warehousing as it takes only 15 days from registration for a company to receive an operating permit. “There are huge warehouses being built in Ruse and in Varna a new terminal for oil products which can no longer be handled in Constanta is being constructed. Burgas also is being besieged by ships which should normally head to Constanta,” said Stancescu. “The whole situation is the result of the authorities’ helplessness in efficiently managing fis-
cal issues to the country’s best interest.” Emilian Duca, partner at BDO Tax, agrees that there is a trend among small local companies to relocate to Bulgaria, but he believes that these firms are in search of advantages related more to intra-community trade and bookkeeping than income tax itself. He added that how the relocation is handled is also very important. “What actually occurs is the setting up of additional companies with charges between the group’s members being adjusted through transfer pricing. This is why such a business decision should be very prudently considered, bearing in mind all the fiscal risks,” Duca explained.
WHAT BULGARIA HAS THAT ROMANIA DOESN’T Dumitru Diculescu of Diculescu Gh. Dumitru PFA, a firm which offers consultancy to those interested in moving or setting up a business in Bulgaria, told BR that the most interesting cities in the Balkan country for running a business are Ruse, Sofia, Plovdiv, Varna and Burgas. The main advantage of establishing a company in Bulgaria is the level of taxes, which are significantly lower than in Romania. Both countries have a flat tax rate on profits and income, but it is lower in Bulgaria, 10 percent, compared
to 16 percent in Romania. Withholding tax for dividend distribution is also lower there (5 percent versus 16 percent). However, what makes Bulgaria a standout country for investors is the competitive labor and operational costs. Social security contributions are significantly lower than in all other countries in the region and in addition to this, the base for the calculation of these contributions is capped at approximately EUR 1,000. "Although one could argue that the recent increase in the VAT rate (from 19 to 24 percent) is the main factor influencing Romanians’ decision to move their business to Bulgaria, I disagree to some extent. The VAT raise has mainly impacted the spending power of endconsumers. Nevertheless certain VAT incentives offered by Bulgaria (such as a faster procedure for VAT refund) are of course taken into consideration by investors during the investment decisionmaking process. The Romanian fiscal system is losing once more in competiveness because of the high frequency of legislative changes,” says Moisa. According to her, relocating a business to Bulgaria is actually a company set-up process, after which the firm may carry out its usual economic activities. The initial capital required to set up a company in Bulgaria has recently been reduced to BGN 2 (approximately EUR 1) as compared to the previous level of BGN 5,000 (approximately EUR 2,500) and RON 200 in Romania (approximately EUR 50). The company will be considered resident in Bulgaria and will be liable to pay taxes there (i.e. corporate tax, VAT, withholding tax, salary taxes and contributions). In the renewable energy field, Bulgaria seems to be attractive as well, with many projects already in the operation stage. "The feed-in promotion system (different from the green certificate support scheme applicable in Romania) whereby renewable energy generation is encouraged may have contributed to this success,” says Iancu.
WHAT RISKS DOES A FIRM ASSUME? Specialists say that when deciding to move a business to Bulgaria, the risk of creating a taxable presence in Romania should also be taken into consideration, especially when the employees of the Bulgarian company will carry out their activities in Romania. “By creating a taxable presence in Romania (i.e. a branch), the profits attributable to this branch will be taxable in Romania at 16 percent. Also, from a salary tax and social security contribuBUSINESS REVIEW / October 18 - 24, 2010
FOCUS Romania versus Bulgaria in figures
- employee
Romania RON 200 (approx EUR 50)
Bulgaria BGN 2 (approx EUR 1)
16 percent 24 percent 16 percent
10 percent 20 percent 5 percent
16 percent flat rate
10 percent flat rate
between 28 percent and 39.2 percent 16.5 percent
16.9 percent* 12.1 percent*
SOURCE: DELOITTE TAX
COURTESY OF DELOITTE
COURTEY OF PELI FILIP
Minimum share capital for the incorporation of a limited liability company Companies Corporate tax VAT Dividend tax Individuals Income tax rates Social security contributions - employer
Monica Iancu, senior associate with Peli Filip
Ramona Moisa, corporate tax manager at Deloitte
* The base for the contribution is the total income but no more that 2,000 BGN per month (approximately 1,000 EUR).
tion perspective, in order to benefit from the reduced rates applicable in Bulgaria, employees should actually work in Bulgaria. The sole fact of concluding a labor agreement with a Bulgarian employer does not automatically reduce the social contributions due,” said the Deloitte Tax corporate tax manager.
their businesses to Bulgaria has increased lately due to frequent changes in tax legislation, which create uncertainty for investors (i.e. the dependency criteria introduced by the Romanian legislation with respect to taxation of income, the rise in the VAT rate, the level of social security contributions). Gabriel Biris, managing partner at Biris Goran, says that this new wave of business emigration is the result of more than helplessness, in fact bad will, as the Romanian authorities’ measures related
to fiscal warehousing for instance cannot be explained by sheer stupidity, but by more mundane interests. Meanwhile, the Deloitte specialist says that maintaining the flat tax rate is essential to preserve Romania’s fiscal stability. Another important measure could be the reduction of social contributions due both from employer and employee, and the introduction of a cap on these contributions as a maximum taxable base. This could turn into a fiscal tool to
WHAT SHOULD ROMANIA DO? Specialists say that the number of companies that have already relocated
BUSINESS REVIEW / October 18 - 24, 2010
boost Romania’s competitiveness stimulating attractiveness and personnel retention (especially highly-qualified employees),” argued Moisa. However, changes in the legal framework must be implemented in a normal way that avoids fiscal uncertainty for taxpayers, specialists say. Legislative stability is very important for a tax environment favorable to business development, a fact known by everybody except the Romanian authorities, some say.
11
BALANCE
Online becomes the latest fashion trend
Corina Dumitrescu Maria Lucia Hohan is a perfect example of those fusing fashion and online communication. The designer says her creations address an emerging elite. MLH customers “are generally very young, have not reached 30 yet, don’t necessarily come from an artistic environment or showbiz, but are active women, who work in banking, advertising or law, among many other fields – or are enterprising and have their own businesses,” Hohan outlines. The online environment is very 12
COURTESY OF MARIA LUCIA HOHAN
Look around and it becomes clear that in recent years, creativity has loomed large on the fashion radar of young Romanians. Local and international brands alike have brought an explosion of color and shapes to the bold and the beautiful, who are not afraid of mixing it up through their outfits. Fashion in Romania has truly become a statement for the sons and daughters of those who once wore the communist uniform and now seems to go hand in hand with online promotion, as social media manages to bring together members of the targeted audience.
Fifty percent of Maria Lucia Hohan’s sales come from outside Romania
important to this kind of emerging clientele, described as “urban divas,” says the fashion designer. “I have always believed in the potential of online. I purchase almost 90 percent of what I own online – from clothing and accessories, to furniture and kitchenware. I like seeing, comparing prices, analyzing, thinking, without being pressed by salespeople,” says Hohan, explaining why her online shop is functional 24/7, in every corner of the world. Some 50 percent of shoppers purchasing clothes from the designer’s online store are based abroad, especially those choosing MLH bridal dresses, “which is an absolute surprise and an unexpected success. We are very happy about it,” says Hohan. Unlike in the case of more traditional designers, who spent most of their creative time locked in their studios, Hohan says that feedback from customers is very important, and is gleaned from social media. “Facebook puts me in direct contact with clients from all over the world. They write me messages, ask me for advice or give us suggestions. What’s more, I keep our ‘fans’ in
touch with any kind of news, from appearances in the media to new creations.” Hohan’s profile now has over 3,000 friends. But online communication is not all about Facebook, as Hohan is also preparing to launch a collection with a blogger, Alix The Cherryblossomgirl, with whom she will work on a more affordable collection. The Alix + MLH collection focuses on accessories and will be presented to an international audience both online and offline, which Hohan believes will be a success, since Alix’s blog is ranked as one of the ten most influential style blogs in the world (www.thecherryblossomgirl.com). The young designer’s SS11 collection has been her most successful so far, notching up a 250 percent increase in sales since the previous year, and has been purchased by a prestigious online shopping website, “where there are only exclusive brands, which will implicitly increase MLH shop traffic”. The official announcement about this purchase will be made in spring 2011.
Handmade is a trend that has gained more and more ground in the last five years, supplying creative and colorful creations to the bohemian young, mixing art and practicality. Zuza Handmade is one such shop, having opened this year at the end of July. Although there has been an explosion in shops and designers in handmade fashion, Alina Galan, the store’s general manager, believes there is still room for newcomers, as what the local market has become saturated with is the word “handmade,” not quality creations in this area. The best sold handmade products are not just clothing, but also bio-cosmetics, decorative ceramics and jewelry, which can also be found at Zuza Handmade. The investment in the handmade store, where prices range from RON 5 to several hundreds, is EUR 100,000, which Galan hopes to recover in one or two years. As for future plans, the entrepreneur says that Zuza Kiosk will be opened next year, as well as a London shop. Online and offline are regarded as equally important means of promotion by Galan, both contributing to the store’s products’ increasing visibility. Individuals without the necessary funds to open their own business can open virtual online shops with the aid of sites providing such hosting services. Breslo supplies this kind of service, at a monthly fee of a maximum RON 10, independent of the user’s sales. The project, now showcasing 5,000 handmade designers, was initiated in 2008 by Luigi and Ruxandra Meclea, and joined by other collaborators over time. Jewelry is currently the best sold product in the online shop. Breslo representatives say that the handmade market is not oversaturated, since “it focuses on the creativity of a larger and larger group of people, who reinvent themselves, explore new techniques, approach new types of products, so that the diversity becomes too high to talk about an oversaturated market.” The recent years have also seen an explosion of in-your-face tshirts, making more or less direct statements about their bearers. Adina Maiorescu designs this kind of BUSINESS REVIEW / October 18 - 24, 2010
BALANCE
COURTESY OF CHOUCHOU
ChouChou lines up to the creative trend with hand-painted show
attire. She is the owner of the Bubbles Handmade project, which manufactures t-shirts with playful, innocent and abstract messages for those who choose this means of expression. She started her project “to pursue an old passion for painting and drawing,” as she says, one year ago and has already amassed around 4,000 friends on Facebook. Prices vary between RON 40 and 70, depending on the complexity and time she dedicates to each model, and the garments address women aged between 25 and 30, “in search of uniqueness and simplicity”. Maiorescu uses her blog and Facebook profile as means of promotion, since they “are undemanding ways of promoting the tees. Though it's not really obvious, Facebook is somehow a targeted channel, as the pages are continuously recommended by viewers to other Facebook users.” Offline promotion also comes in handy for handmade manufacturers, as Maiorescu sells her products in two shops and also used to attend handmade fairs, but is now too time pressed to do so. In the future, she wishes to extend her product line and join a group of handmade artists in a project abroad. Maiorescu’s best sold design so far is her "J'ai pas le temps d'avoir 30 ans" (“I have no time to be 30”) t-shirt and she is now working on designs inspired by contemporary society, as well as by Orwell’s and Huxley’s dystopian worlds. Shoes are no exception to the creative trends that Romanian fashion is now following. Customization is the key to success in this area as well. ChouChou, an online and offline shoe store, with prices startBUSINESS REVIEW / October 18 - 24, 2010
ing at around RON 200 or below, has chosen to take footwear out of the box and hand-paint it, addressing creative women aged between 15 and 35, who keep up with trends, are preoccupied with their career and are generally open to change and the exquisite. Although ChouChou was started in early 2009, it has already reached 3,000 friends on Facebook, a profile which is regarded by the team of developers as a means of bringing people to the offline and online store, with sales through the former currently outstripping the latter four-fold. The initial investment in ChouChou was EUR 6,000, which was quickly covered in a few months, and it was followed by a new outlay, of EUR 5,500, for the physical store. Launched in the midst of the crisis, the shop seems to have escaped the worst of the economic woes. It has managed to sell abroad and store representatives have declared that a new outlet will open in Bucharest in the future, as well as elsewhere in the country. In today’s Romania, since they address a similar target, fashion and the online environment seem to go very well together, whether it is handmade, for the more bohemian young, or couture, for the more mature. All in all, to succeed in this domain, in the words of Maria Lucia Hohan, “Think long and longer term. Understand that this is an extremely difficult profession and industry, in which experience is accumulated after years and years of work and dreams, and that sketches that are not put into practice will not pay salaries or bring customers. Think business!” 13
BR EVENTS
Tax and legal experts call for fiscal predictability Romania lacks a coherent fiscal strategy for the medium- and long-run, which is seriously undermining the country’s credibility as an investor-friendly economy, agreed legal and tax experts present at the Tax & Law – New fiscal measures: effects and consequences event, organized by Business Review last week. From the controversial minimum 1
2
3
tax to the VAT increase and the even more controversial registration for the Registry of the Intra-Community Operators, 2010 has brought a lot of changes to the local fiscal scene. And not always those needed in times of recession, whether by local firms or by potential investors, company representatives argued. Speaking at the event, Andreea Paul Vass, personal counselor of Prime Minister Emil Boc, announced that currently there is a lot of
4
5
6
pressure from the Democrat-Liberal Party (PDL) to reduce the flat tax to 1012 percent. Gabriel Biris, founding partner of Biris Goran, said that Romania had reached a stage at which there were many fiscal areas which could not be patched up. Furthermore, other speakers at the BR event voiced the need for holding legislation which could attract groups of companies to the country as the fiscal competition among European member
7
■ 1. Mariana Vizoli, VAT director at the Min-
8
grows fiercer.
istry of Finance ■ 2. Gabriel Sincu, partner,
Part of the Business Review legal
head of tax & outsourcing at Mazars ■ 3.
series of conferences, the event offered
Marius Stancescu, founding president of Riff Holding International ■ 4. Dragos Doros, director of legislation and direct taxes at the Ministry of Finance ■ 5. Emilian Duca, partALL PHOTOS: LAURENTIU OBAE
ner at BDO Tax ■ 6. Dan Schwartz, managing partner of Scot&Company Romania ■ 7. Gabriel Biris, managing partner of Biris Goran ■ 8. Florin Gherghel, head of tax department at Noerr Finance & Tax
an opportunity to debate the latest fiscal changes in Romania and their implications for local companies. It gathered around 80 company officials and was organized in partnership with BDO Tax, Mazars and Riff Holding International. For more information about future BR events, please visit www.businessreview.ro/events/.
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BUSINESS REVIEW / October 18 - 24, 2010
BR EVENTS 9
10
13
11
12
14
ALL PHOTOS BY LAURENTIU OBAE
■ 9. Angela Rosca, managing partner of TaxHouse ■ 10. Adrian Luca, director of Transfer Pricing Services ■ 11. Andreea Paul Vass, personal adviser to the Prime Minister ■ 12. Anamaria Acristini, tax director at E.ON Servicii ■ 13. The event gathered around 80 company representatives ■ 14. Some of the topics tackled included how to deal with the authorities and tax inspections, corporate and dividend tax and progressive taxation vs. the flat rate
BUSINESS REVIEW / October 18 - 24, 2010
15
PROPERTY Carrefour reports EUR 270 million sales in Romania for Q3
French retailer Carrefour has reported sales of EUR 270 million in Romania in the third quarter of this year. In the first nine months of the year sales stood at EUR 804 mil-
Second phase of Green City project finished Green City has finished construction of the 146 houses in the second phase of the project. Around a third of the properties have been sold, while 60 percent of the 356 homes in the first phase of the project have been bought. Green City currently has another 150 houses under construction, and the total investment in the project is EUR 40 million. The second phase of the project has
been built close to the future leisure area of Green City. It will have an Aqualand, exterior pools, a spa, tennis courts, football pitches and a fitness hall. Some 150 homes have been sold in the project this year, an average of 13 a month, say representatives of Green City. The residential complex is being built on a 103hectare surface, of which 24 hectares is made up of green areas and parks.
Cefin opens new HQ in Arad Cefin has relocated its activity for the west of the country, which covers Timisoara and Arad, to a new headquarters in Arad. The firm has shifted to a new location in the Micalaca Est industrial area. The new site has a larger service area on a 400-sqm surface, with six service points, increasing the company’s overall servicing capacity. The company’s activity in Arad started in 2002 with the sale of Iveco commercial vehicles, and spare parts
distribution was added a year later. In 2005 an authorized Iveco center was opened. This year the company is planning to achieve a EUR 1.5 million turnover from servicing and spare parts distribution activities. Cefin Romania is the largest Iveco authorized dealer, with a 13 percent market share. It currently has eight sales and service centers in Romania in Bucharest, Arad, Constanta, Deva, Galati, Pitesti, Ploiesti and Timisoara.
Kiabi partners Gefco for transport operations Gefco Romania has taken over the organization of Kiabi’s transport operations, shifting them from the retailer’s consolidation center in Lille, France, to the Gefco warehouse in Bucharest. The move comes as Kiabi expands 16
its operations in Romania. Gefco manages transport logistics by using high-capacity trucks to deliver the stocks needed to Kiabi stores in Bucharest and Constanta. In total, the firm has five shops in Romania and 381 outlets in Europe.
COURTESY OF ADEPLAST
LAURENTIU OBAE’
The retailer still feels the effects of the current economy in Southern Europe
lion, 5.3 percent lower on a like-forlike basis. At group level, the retailer reported Q3 sales of EUR 25.6 million, up 0.1 percent on a like-forlike basis, and growth driven mainly by emerging markets. The retailer’s activity in Europe saw improving performances in Belgium, after store closures, and in Poland, where sales improved. Southern Europe remained impacted by the recession, while in Spain like-for-like sales decreased 4.3 percent in an environment that remains challenging. Carrefour reported solid growth in Latin America (up 34.3 percent) and Asia (26.3 percent). The retailer also grew strongly in Brazil, up 13 percent using a constant exchange rate, boosted by the performance of the Atacadao brand.
Adeplast reports EUR 24 mln turnover in first nine months
The diverse product portfolio helped the company’s results
Construction materials company Adeplast has reported a turnover of EUR 24.35 million for the first nine months of this year, an 18 percent increase from the same period of the previous one. According to Marcel Barbut, the Adeplast owner, in September of this year the company achieved a production level similar to its total in 2009, due to its price promotion strategy, the diversification of its
product portfolio and an increase in market share thanks to the disappearance of many occasional producers. The company’s best sold product is Adeplast Polisitrol, an adhesive, which sold 2.32 million sacks. On the decorative coatings segment Adeplast reported a four-fold increase in sales volume compared to the previous year, amounting to EUR 2 million.
Modatim gets European financing for fourth building in City Business Center in Timisoara Modatim Business Facility, a subsidiary of Modatim Investment, has launched the project for its fourth office building in the City Business Center complex, CBDC, in Timisoara. The project has European financing worth RON 29.3 million (approximately EUR 6.9 million) through the Regional Operational Program administered by ADR Vest which covers 60 percent of the cost of the construction works. The CBDC project involves the development of all-inclusive office space and a conference center in the center of Timisoara. The D building
is the fourth in the complex and will offer 7,000 sqm of office space and 1,000 sqm of service space on the ground floor. It will include a multimedia conference center and will have 100 parking places. According to the financing contract, the project will be developed in maximum 24 months. The Timisoara City Business Center will provide 34,000 sqm of rentable space. The total value of the investment in it stands at EUR 50 million. The main tenants at CNC are Alcatel, Wipro, Microsoft/Ciao, PwC, Unicredit Bank, Deloitte and Autolive.
Sprider Stores opens 15th local outlet in Braila Greek retailer Sprider Stores has opened its 15th outlet in Romania in Braila, following a EUR 1 million investment. The 1,000-sqm shop is located in the Promenada mall. Besides items of clothing, part of the store is dedicated to interior furnishings and decorations.
Sprider Stores entered the local market in 2007 with a unit in City Mall and now operates over 21,000 sqm of retail space all over the country. Since its market entry, the company has invested more than EUR 18 million in furnishing its units in Romania. BUSINESS REVIEW / October 18 - 24, 2010
RESTAURANT REVIEW
DECENT FISH AT LAST TAVERNA, STR POPA NAN 16, TEL 021 252 2956 any years ago I swore that I would never eat fish in Romania again, because it has the worst fish restaurants in the world. But every year I break that promise hoping to find one, just one real fish restaurant in the entire nation. There is, for example, the truly vile, execrable On Plonge in Constanta, and if you survive that experience, you will be further disillusioned with Bucharest’s offerings at the overrated, pompous and ridiculous Mesogios, or worse still, there is a plethora of burned offerings via Romanian restaurants who will all sell you fish tasting and sweating of sunflower oil. To put it another way, in my 20 years of living here, I have not encountered one real fish restaurant in this country. When I say “real” I mean that in the European and international context. But with Taverna, I truly believe I have found the best fish restaurant in the city. But be warned: “best” must be interpreted as being the best of a bad lot. So, let’s look them over. They are situated in a pretty dumpy part of the city. It is easy to get to, but the location is… well, a dump! But this should not put you off. Neither should the décor, which is… a dump! They have hardly spent a lei on the interior, which is basic wood and tablecloths, nothing more. But I repeat, that should not put you off from visiting it. Let me show you why. I ambushed the chef, who told me that all his fish arrives fresh (not frozen) from Greece. He looked like an honest chap, so I refrained from examining my fish before he cooked it. However, I urgently advise you to always examine your fish for freshness in every restaurant you go to. A good House will welcome such a suggestion. Starters were shrimps, octopus and squid, so you will have guessed by now that it is standard Mediterranean fare. They offer you these predictable goodies every way. Fried, grilled, in rings, in butter, in schnitzel. OK for the House, but they omitted my favorite way of just frying them up in lashings of finest olive oil infused with garlic. I asked
M
COURTESY OF TAVERNA
BUSINESS REVIEW / October 18 - 24, 2010
The House imports the fish freshly from Greece
for it like this, and they concurred without a complaint. Bravo House. And bravo again for the quality. For I had a big, big whole squid together with a cuttlefish, both tender and subtle in a combination of spicy olive oil (cuttlefish) or grilled in garlic butter (squid). At RON 24 each, I was more than happy. For mains, there was a choice of Dorada (sea bream), Sea Bass, Red Mullet, Tuna, Perch and Trout, all priced between RON 19 and 35 for large, healthy portions. I had a Dorada, but I insisted that the chef grilled it, coated in butter. Yes, he did so. It was perfect! Now, here is a hint. Always twist the menu in a fish restaurant ever so slightly if you think it is necessary. A good House knows that fish is so very flexible in its preparation that the customer can always make a slight alteration, as I did with my butter grill. This IS a good house and they made my slight change. We finished with six huge, fresh sardines (at RON 15) which of course are nothing like the limp fillets you get in a tin. These are large and boney (but soft bones) and are ideal for sharing as a starter. There are so very many ways of offering a fish menu, which you will only find in Europe, and as we know to our cost, Romania is not a Euro-
pean country. So abandon ye all hope of ever finding fish in this gastro-
nomic desert which has been: streamed, or boiled in wine, or boiled in cider, or had a sauce accompany it made from fish stock (fish stock is a staple to a European chef, but will put a Romanian chef into a panic of confusion). Nor will we ever see fish which has been baked to perfection with the juices reduced by a real chef into a fabulous concentrated sauce loosened up with fresh cream and abandoned to a frenzy of fine cognac. No, no my dear friends, this is a gastronomically crude, Balkan nation which considers that fish should just be heated and served. How sad. But having said that, Taverna will satisfy your fish craving. Go now, test the chef by asking him to go “off piste” from his menu and alter it for you. I bet he will do so. Michael Barclay mab.media@dnt.ro
17
CITY
Eyebrow Queen Anastasia Soare opens first European salon in Bucharest
One of the top rated modern British soul and R&B singers, GABRIELLE, will hold a concert in Bucharest’s Fratelli Studios on October 28. The singer is expected to perform some of her best known hits, including Dreams, Out of Reach, Rise and Sunshine. Although Gabrielle usually takes long breaks between new album releases, she continues to enjoys success and receive notable awards, winning gongs at the Brit Awards, Ivor Novello and Music of Black Origin. Tickets cost RON 200. Club Fratelli is located on Str. Glodeni 1.
Tarkovsky, Mihalkov, and Sokurov, headliners at the Russian Film Festival in Bucharest Anastasia Soare owns 800 outlets in the US and 600 overseas
The Romanian Anastasia Soare, known in the United States as the Eyebrow Queen, opened her first Anastasia Brow Studio in Bucharest at the start of October, also a European premiere. With clients such as Madonna, Michelle Obama, Oprah Winfrey, Cindy Crawford and Victoria and David Beckham, Soare is one of the most sought after beauty brands in Hollywood through her Anastasia Beverly Hills salon and
store chain. Eyebrow grooming services in the newly opened Bucharest salon cost RON 150 for women and RON 100 for men. Soare’s trademark products can be found at the store in the salon, located in Bucharest’s Radisson Blu hotel, Calea Victoriei 63-81. More information is available on the salon’s site, www.anastasiasoare.ro, also available in English. Corina Dumitrescu Tarkovsky’s Stalker, one of the festival’s most expected titles
The first Russian Film Festival
will take place in Bucharest, between October 22 and 28, showcasing some of the best known productions from Russian cinema. Highlights of the festival are Andrei Tarkovsky’s Stalker, Aleksandr Sokurov’s Days of Eclipse, Leonid Gaidai’s Diamond Hand and Russian film royalty Nikita Mikhalkov’s At Home among Strangers. The films will be screened at Cinema Eforie and Cinema Studio, in Bucharest. Furthermore, between October 21 and 28, Union cinema will host a cartoon exhibition by pioneering Russian director Sergei Eisenstein. Corina Dumitrescu
The adventures of MR. URBAN will be continued on the monitors in the city’s subway stations from October 15 to November 15, depicting the everyday happenings that Bucharesters usually face. The Adventures of Mr. Urban is one of the most recent projects in development under the I Love Bucharest umbrella.
EC plans EU-wide smoking ban in public spaces The European Commission is preparing to introduce legislation to ban smoking in public places in the EU in 2011, according to electronic publication EUObserver. The announcement was made by the health commissioner John Dalli. Dalli said that there would be zero tolerance regarding possible exceptions to the bill to be brought forward next year, unlike previous attempts at applying similar legislation. The commission will also aim to establish a consensus on rules removing 18
tobacco products from display and making packaging as unattractive as possible, EUObserver reported. Packets will have to look the same and feature prominent warning pictures, such as photos of diseased lungs, as well as more information on the toxins the product contains. “The more uniform and bland cigarette packaging is, the better," said Dalli. Smoking kills around 650,000 Europeans every year, says EUObserver. Corina Dumitrescu BUSINESS REVIEW / October 18 - 24, 2010