Bureaucracy shows clear signs of improvement

Interview with Rainer Tom, Partner, international law firm bnt

To what extent is legal certainty given to companies in Hungary?

On what foundations does Hungarian law rest? Hungary has been a member of the European Union since 2004. There is a separation of powers, the executive, legislative and judiciary are independent. The legal system is stable and reliable. Even though court proceedings tend to take a very long time compared to Western Europe (not least due to the fact that numerous court dates are set before a judgement is passed even in simple cases), they are conclusively justified and comprehensible, especially in the higher courts.

Read the complete interview here


Austrian companies are affected by labour shortage

Interview with Jürgen Schreder, Business delegate, Wirtschaftskammer Österreich, AußenwirtschaftsCenter Budapest

How is the Austrian economy represented in Hungary today?

Austrian companies were the first to invest in Hungary after the fall of the Iron Curtain. Austria has also been one of the most important investment partners in Hungary since then, currently ranking third behind Germany and the Netherlands.

According to the Austrian National Bank (ÖNB), the total stock of direct investment amounted to 5.7 billion euros in 2018, which represents a slight decline compared to 2017 (6.3 billion euros). A look behind the figures shows that Austria has built up a strong presence in Hungary: Austria has the second largest number of branches in Hungary, just behind Germany and well ahead of the US, and Austrian companies are the third largest foreign employer (behind Germany and USA), having created over 69.000 jobs.

Read the complete interview here


How to successfully enter the African Market: “Mittelstandsindex Afrika” launched

A report by africon and partners

By 2035, Africa will have the largest workforce worldwide. This is where the global markets, the customers and the employees of the future are growing.” The Federal Ministry of Education and Research (BMBF) has also been pursuing a focused “Africa strategy” since 2018. The “Mittelstandsindex Afrika” aims to support the German “Mittelstand” (SME sector) in its own quest to expand in Africa by raising awareness about opportunities, creating transparency at an early stage by providing a guideline for a structured approach to the African markets.

The “Mittelstandsindex Afrika” draws its information from 55 input factors consisting of specifically gathered primary data and existing secondary data sources. These are summarized in 16 “indicators” for SMEs, which in turn are condensed into three “key indicators”. These “key indicators” – “Scale and Scope of Opportunities”, “Getting into the Market” and “Navigating inside the Market” – give rise to a country rating that allows a mid-sized company a quick overview of each country’s business appeal. 

Read the complete report here


Investing in Germany


Executive employees

Executive employees (leitende Angestellte) are accorded a special role in Germany. They are at the top of the operational hierarchy, below the senior management, but are at the same time employees. Their status is unique because they are subject to direction as employees on the one hand but also exercise the functions of employers with respect to the rest of the workforce (management functions) on the other. The German legislator takes this special role into account in a number of ways:

  • The law on public working hours is not applicable to executive employees.
  • The regulations on the protection of employment apply less strictly to executive employees.
  • Under the works constitution, executive employees are not represented by the works council, but can elect their own representative bodies (executives’ representative committees).

Read the complete report here


Real estate projects in South Africa

SOTM by africon

The real estate industry in South Africa has been growing steadily in the last few years. Looking at the industry’s three main segments, i.e. residential, commercial, and additions/alterations, it is apparent that South Africa residential developments have increased the most in value, at a growth rate of 11.37% between 2015 and 2018. Similarly, additions and alterations have increased at a growth rate of 7.92% in the same period. The growth in these two segments can however be accredited to the country’s growing urban population.

Read the complete article here.


HR Policies in India: 10 Best Practices for Employers

India Briefing is produced by Dezan Shira & Associates

When establishing human resource (HR) polices in India, foreign companies need to strike a balance between their own best practices and local norms in the country.  

Foreign companies should seek to establish a strong understanding of laws and regulations that inform HR administration as a basis for their HR policies in the country. This is particularly important in country like India, where federal, state, and industry-specific regulations govern labor laws.

Read the complete article here


Personal Income Tax in Indonesia for Expatriate Workers Explained

ASEAN briefing is produced by Dezan Shira & Associates

  • Personal income tax in Indonesia is determined through a self-assessment system, meaning resident tax payers need to file individual income tax returns.
  • Resident tax payers are subject to progressive tax rates ranging from 5 percent to 30 percent.
  • Given the consequences of non-compliance, foreign workers should seek help from registered local tax advisors to better understand their tax liabilities.

Expatriate workers need to know that personal income tax (PIT) in Indonesia is determined through a self-assessment scheme.

Read the complete article here


Vietnam Records High Female Employment But Challenges Remain

Vietnam Briefing is produced by Dezan Shira & Associates

  • Vietnam ranks high globally in terms of its female labor participation rate, but more will be required to bring equal access job opportunities to women.
  • Challenges faced by Vietnamese women include societal and cultural notions of women being homemakers.
  • Government policy reforms and the public sector can take practical action to develop favorable policies and regulations to create equal opportunities for women.

Vietnam has consistently outperformed ASEAN countries, as well as Western ones, with its female labor participation rate, as reported by the Asian Development Bank (ADB) and the Organization for Economic Co-operation and Development (OECD).

Read the complete article here


Ukraine is still an employer market

Interview with Christian Tegethoff Managing Director CT Executive Search

What kind of mandates are you currently working in Ukraine?

In Ukraine, we are predominantly working for medium-sized companies who want to strengthen their local teams or make a change at the head of the Ukrainian subsidiary. Typical positions are Country Manager or Managing Director, Representative or Sales Director.

Read the complete interview here


UKRAINE: Many sectors need to catch up

An interview with Heiko Kreisel Managing Director of Zeppelin Ukraine, Kiev

After the crisis years of 2014 and 2015 with the sometimes civil-warlike conditions, we are now back on track for growth. At the height of the crisis, we reduced our workforce to 300, and now employ more than 550 people - more than ever before in Ukraine. Today, we are represented at fourteen locations between Lviv and Dnipro, Kiev and Odessa.

Around 50% of our sales are generated by the mining segment, 20% by construction and road construction machinery, 15% by drives and gas engines. The agricultural machines achieve 15% of the sales volume.

Read the complete interview here


UKRAINE: Attractive for labour-intensive production

An interview with Andreas Schwabe Senior Economist CEE, Raiffeisenbank International AG, Vienna

Ukrainian economic growth has clearly exceeded expectations. We had assumed that in the double election year 2019, due to the political uncertainties, there will be a subdued growth of 2-3%. However, consumer confidence in the population has improved this year and expectations of many Ukrainian companies remain positive. As a result, growth for the full year 2019 should exceed 3%. Among other things, the strong growth is due to the significant increase in real wages of around 10% year-on-year, which is leading to a strong increase in retail sales and increased construction activity.

Read the complete interview here.


SOTM: Africa’s top imports in 2018

SOTM by africon

Over the last five years, Africa has been recording a trade deficit when it comes to total annual imports and exports of goods. Data trends also show that imports to and exports from Africa started increasing in 2017 after the decline in 2015. Also, China, France, USA, Germany, and India have remained Africa’s top export partners in these past years.

In 2018, Africa’s total imports was worth approximately 549 billion USD, and the largest imported product (using the 4-digit category) was petroleum and mineral oils which was valued at approximately 60 billion USD, that is, 11% of Africa’s total imports in 2018.

Read the complete article here


5 Big Changes to China’s VAT in 2019

China Briefing is produced by Dezan Shira & Associates

Following the announcements made in the annual Work Report delivered at the Two Sessions, the Ministry of Finance, State Taxation Administration, and General Administration of Customs have jointly issued a series of new policies on value-added tax (VAT).

The new polices, which took effect on April 1, 2019, aim to enhance economic activity in certain sectors by lowering VAT rates and increasing VAT credits.

The latest changes mark the final stages of China’s overhaul of its VAT system, and come as part of a larger RMB 2 trillion (US$298.3 billion) cost cutting package intended to boost China’s economy.

Read the complete article here


Tax Incentives for Developing Talent in Indonesia

ASEAN briefing is produced by Dezan Shira & Associates

  • Indonesia offers tax deductions of up to 200 percent for businesses that invest in human resources development activities.
  • A mismatch between labor force skills and the needs of foreign investors is a primary reason why the country is failing attract manufacturers shifting their supply chains as a result of the US-China trade war.
  • The government hopes these incentives will enable its labor force to upgrade their skills and become more competitive.

On September 6, 2019, the Ministry of Finance issued Regulation No. 128 of 2019 (GR 128, 2019), which sets out tax incentives for businesses that invest in developing talent in Indonesia.

Read the complete article here


How to Develop an Effective HR Retention Strategy in China

China Briefing is produced by Dezan Shira & Associates

  • An effective HR retention strategy is becoming increasingly important in China’s volatile job market where a shrinking workforce and aging demography is driving up the competition for talent.
  • The best employee retention techniques include a mixture of both external benefits like salary and bonuses and internal benefits like work-life balance, training and mentorship, and career growth prospects.
  • Conduct an HR audit, identify your company’s competitive edge, optimize individual roles, and recognize good work.

It is not uncommon for businesses in China to experience a high staff turnover.

Read the complete article here


SOTM: Plastic film imports in Nigeria

SOTM by africon

The objective was to attain profound understanding of the plastic film packaging industry, as well as to identify potential customers for a slitter manufacturer from Germany. Potential companies in this case included primary manufacturers of plastic film as well as plastic film converters.  

Read the complete article here


Social Insurance in China: Some Exemptions for Foreigners

China Briefing is produced by Dezan Shira & Associates

China’s social security system consists of five different types of insurance, plus one mandatory housing fund. The five “insurances” are pension, medical, unemployment, work-related injury, and maternity insurances.

The premiums for pension, medical, unemployment insurance, and mandatory housing found are jointly contributed to by the employer and employee, while the premiums for work-related injury and maternity insurance are solely contributed to by the employer.

Read the complete article here


German economy is broadly represented

An interview with Anja Quiring Regional Director South Eastern Europe, the German Eastern Business Association (OAOEV)

How is the German economy represented in Romania and Bulgaria today?

Economic relations with both countries stand on a solid foundation. A good indicator, which from my point of view illustrates the commitment of German companies in the countries, is the number of jobs created.

According to a study by the Institute for Market Economics, German companies have created more than 35.000 jobs in Bulgaria. The German-Romanian Chamber of Commerce and Industry (AHK) in Bucharest estimates the number of jobs created by German companies in Romania at over 350.000.

Read the complete interview here


Shortage of Workers Steadily Intensifying

Interview with Uwe Köhler, Managing Director, Husqvarna, Russia and Bulgaria

What should a Western European company consider when entering the Bulgarian market?

Choosing the right location is crucial to success in Bulgaria. At the same time, the infrastructure should be analysed precisely, as in some places it still leaves much to be desired. For example, in Ruse there is no motorway connection. However, the government has done much to ensure that the regions are generally better connected to international transport routes.

The second important issue is the availability of labour. Recruitment is becoming more and more challenging, especially in rural regions. There is a strong migration in big cities like Sofia and abroad.

Read the complete interview here


Bucharest is not Romania

An interview with Roland W. Schacht Managing Director with responsibility for Romania, Moldova, Greece and Cyprus at Schmitz Cargobull Romania, Bucharest.

To what extent is Romania attractive as a production location for Western European companies?

Until now, Romania has been an interesting location due to the availability of land and well-trained technical staff. Today, however, there is a labour shortage, which is mainly due to emigration - about five million Romanians have emigrated since the early 1990s.

The young people are not as much technically oriented as they used to be. Many work in IT and services, less in production and technology. Romania has therefore lost appeal for manufacturing companies.

Read the complete interview here


A review of current court practice related to migration law topics

An article by Andrey Slepov, Partner, Head of the Labor and Migration Practice, BEITEN BURKHARDT, Moscow

General recommendations

When a company files documents for a work permit with the migration auvisited the address indicated in the application and found that there was no office of the employer at this address. The company tried to contest this decision, but the court dismissed the claim with a reference to Clause 9.7 of Article 18 of the Federal Law “On the Legal Status of Foreign Citizens in the Russian Federation”, according to which a work permit shall not be issued or an issued permit shall be cancelled if the employer submits knowingly false information about itself to the police. Ban on entry into Russia for two administrative violations is contestable Two or more administrative violations within a span of three years may lead to a ban on a foreign citizen entering thority (including for a highly qualified specialist), it should be prepared for the migration authority to conduct a fairly comprehensive check before issuing the permit, especially if citizens from so-called “countries with migration risks” are being hired. Therefore one should verify that all information provided is complete and true, and be prepared that the officers may decide to visit the company’s office or have a face-to-face interview with its management, etc.

Read the complete article here.


Expatriate Workers in Indonesia: New Regulation on Positions Open for Employment

ASEAN briefing is produced by Dezan Shira & Associates

On August 27, 2019, Indonesia’s Ministry of Labor issued Regulation No. 228 of 2019 (“Regulation 228, 2019”) to define the types of job positions foreign employees can hold in the country. The new regulation widens the number of positions open to expatriate workers, consolidates the list of positions into one, and simplifies the approval process for foreigners and their employers.

Regulation 228 lists more than 2,000 job titles across 18 sectors that can now be filled by expatriates. The job titles are taken directly from the International Standard Classification of Occupations (ISCO), issued by the International Labor Organization (ILO). The job positions and the requirements in Regulation 228, 2019 will be re-evaluated by the government in two years.

Read the complete article here


China’s Social Security System

China Briefing is produced by Dezan Shira & Associates

China’s social security system constitutes five different types of insurance and contributions to the mandatory housing fund. China Briefing explains how social security in China is calculated, what are employer obligations, and how it impacts foreign workers and migrants.

Social security is a complicated but unavoidable issue in the employer-employee relationship management for businesses operating in China.

Read the complete article here


Social Security Agreement between China and Japan Effective September 1

China Briefing is produced by Dezan Shira & Associates

The Social Security Agreement between China and Japan took effect September 1, 2019, according to China’s Ministry of Human Resources and Social Security (MHRSS).

The agreement will allow Chinese and Japanese nationals working in the other country to avoid paying part of the social insurance.

According to the agreement, Japan will exempt Chinese companies’ dispatched employees, employees on board sea-going vessels and aircrafts, members of diplomatic missions and consular posts, and civil servants from Japan’s two major local annuities – national pension and employees’ pension insurance.

Read the complete article here


Singapore’s Employment Act: The Top 6 Amendments

ASEAN briefing is produced by Dezan Shira & Associates

On April 1 2019, the Singapore government enacted major amendments to the Employment Act (EA). The EA is the country’s main labor law, and the changes affect core human resource (HR) and payroll compliances termination procedures and leave allowances for employers, as well as employees’ rights in the work place.

The new law affects all businesses and all employees – local and foreign – under contract with an employer in Singapore.

Read the complete article here