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Microcap & Penny Stocks : Olympus Ventures (BB: OVIS) ---Short Squeeze is on!

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To: michael d kugler who wrote (149)10/12/1999 2:48:00 PM
From: tonto   of 492
Thanks Mike. <s>

To: +Riley G (115 )
From: +tonto Sunday, Sep 7 1997 3:33PM ET
Reply # of 489

Central America today is very different from years ago when we were in business there. Employees are better compensated and taken care, and protected. One of the reasons for the many battles fought there.

Payroll Burden
In addition to base salaries, the labor law requires employers to pay other benefits
which total approximately 46.86 percent of the wage as shown below. In addition to
this amount the employer must take into consideration the costs of severance pay.

Payroll Burden

Concept Description %

Annual Vacations 30 paid days 8.33%
Christmas bonus 1 month's salary 8.33%
Seventh Day 1 for every 6 days 12.05%
Paid Holidays 10 days (appx.) 3.65%
Social Security (urban) employer's contribution 12.50%
INATEC training 2.00%

Total 46.86%

* Annual Vacation
Employers are to pay their employees the equivalence of 30 days paid vacation for a
full year's work regardless of whether the employee takes the full 30 days or
substitutes 15 days for a cash payment.

* Christmas Bonus
The Labor Code requires all employees be paid a salary for the "13 month," the
equivalence of a Christmas bonus. The amount is based upon the salary paid for the
month of November.

* Seventh Day
Salaries are to be given for the seventh day or day of rest according to the Labor
Code. This is true only after having worked for 6 days. The salary is based upon
the wages set in the contract. If, for example, wages are paid on an hourly basis,
the seventh day counts as an 8 hour work day. If salaries are given upon a task or
production, then the pay rate is equal to the average task or production rate for that

* Paid Holidays
Depending on the municipality, there are approximately 10 days considered
holidays where employees are to be given a paid day of rest.

* Social Security: (3 types)
In Nicaragua, employers are required to contribute to the social security system.
There are three types of social security:

INTEGRAL-This is the type of social security provided to urban laborers. In this
case, the employer contributes the equivalent of 12.5 percent of the employees
salary to cover social security costs while the employee pays the social security
system 4 percent.

IVM- This IVM is required typically for laborers in rural areas. In this case, the
employer is responsible for 5 percent to cover social security costs while the
employee is responsible for 2 percent.

SELF-EMPLOYED- In this case the individual contributes 13.5 percent of his or
her salary.

Employers are required to pay 2% to the National Institute for Technology
(INATEC) per employee for training purposes.

Other Considerations

* Severance Pay
At the termination of a labor contract, the employer is required to pay 1 month's
salary for each of the first three years worked and 20 day's salary for each year up
to a maximum of five months. The employee is also entitled to his or her salary for
vacation time and the 13th month in proportion to the amount of time worked at the
time of dismissal. This holds true even if the reason for termination is based on
mutual consensus or if the employee quits. If fired for an unjust cause, then the
employee is also entitled to a month's salary for white collar workers and 15 day's
salary for blue collar workers. In the event of an extraordinary cause for the
termination of a labor contract, such as destruction of property or theft on part of
the employee, the employer is only required to pay for the relevant vacation time
and 13th month.

* Sickness Benefits and Accident Compensation
Employees are to be given a maximum of 30 days leave in case of illness. These
30 days, however, may be renewed. In the case of partial disability, the employee is
entitled to leave of up to six months or a year if he/she is permanently disabled. For
maternity, women are given 84 days of maternity leave. INSS will cover 60% of the
salary in case of illness, the rates vary for disability, and will also pay for the
maternity leave. The employer has no obligation except for the rate (i.e. 12.5%) it
already pays to the social security system for each employee.

* Over-time
Over-time is to be paid at twice the regular rate set in the labor contract.

* Payment Delays
If payment to the employee is delayed, the employer is required to pay an extra 10
percent of what is owed for every late week.


Addressing Grievances
Grievances can be made by a single employee, a group of employees, or through a
union. Grievances are to be first directed to the employer and then to the Ministry
of Labor.

The Ministry of Labor has the right to suspend the activities of a firm if it is
infringing upon the rights of its employees as defined in the Labor Code.

Under the new Labor Code, strikes may not take place until all other possible
measures have been taken to resolve the dispute. That includes exhausting all
conciliatory measures provided by the Ministry of Labor. If these requirements are
not fulfilled, the strike is considered illegal, in which the employer has the right to
dismiss any employee who does not return to work. If a strike is considered legal,
then the employer may not hire new workers throughout the duration of the strike,
nor terminate any labor contracts.

Collective Bargaining
Collective bargaining, a written agreement between employers and employees, can
only take place between an employer and a union.

* Labor unions must have at least 20 members and they must register with the
Ministry of Labor.

* Membership in both Sandinista and non-Sandinista unions has declined in recent
years and continues to fall. Today, less than half (and perhaps as few as 1/3) of
workers in the formal sector are unionized. The political power of both Sandinista
and non-Sandinista unions has diminished accordingly. Additionally, Sandinista
unions have been without the benefit of direct government support since the
Sandinistas lost power in 1990, and have been wracked by charges of corruption.
Just over half of unionized workers are members of Sandinista unions. Many
employers find non-Sandinista unions easier to work with than Sandinista unions.

Hiring and Firing Requirements
* Employers are required to have a labor force comprised of at least 90%
* Employers must obtain permission from the Labor Ministry to dismiss a group of
employees (i.e. when closing down a plant). Permission is not necessary when
firing 1 or 2 employees as long as they are given their due compensation and 30 day
notice prior to dismissal.



* New Tax Law
* Tax Free Zones


A new tax law went into effect in May, 1997. The law was designed to reduce tax
evasion by specifying those items that are exempt from tax payments and abolishing
the government officials' discretion to make exceptions to the law or exonerate
tariffs. It also aims at promoting investment and overall economic growth through a
series of changes favorable to businesses.

1. Income Taxes
2. Consumption Tax (Luxury Tax)
3. General Sales Tax
4. Social Security Taxes
5. Import Tariff
6. Temporary Protection Tax

1. Sales Tax
2. Territorial and Residence Tax

1. Persons or associations of persons
2. Incorporated associations of persons
a. corporations (sociedades anonimas S.A.), societies, associations and foundations
b. mixed corporations (i.e. government with private capital)
c. state entities and state-owned enterprises

Each of these is subject to income taxes and the sales tax regardless of nationality as
long as the source of that income is based in Nicaragua.

July 1 - June 30 and special periods for seasonal activities.


The free trade zones were authorized to encourage job creation. Under the
Free-trade Zones Law, companies are granted full exemption from income taxes for
the first 10 years and 60 percent exemption thereafter. The free trade zones are also
exempt from import duties, levies, and sales taxes on imports. Currently, the large,
state owned "Las Mercedes" free trade zone is located near Managua's international
airport and a smaller "Index" free trade zone is located off of Managua's north
highway. Four other private free trade zones have been authorized, but have not yet
been opened.



For individuals, income taxes are calculated through a progressive tax rate as
income increases. Taxable income is based on Nicaraguan-source income. The
maximum rate applicable is 30%. This tax rate will fall to 25% in July, 1999.

For a corporation and other associations, there is a flat rate of 30% on
Nicaraguan-source income. Beginning July 1999, this flat rate will be reduced to

Land or assets may can also be taxed as income. For the agricultural sector, there is
a tax per lot of land in excess of some specified amount. This amount depends on
the region. For all other sectors, individuals who do not receive a salary but are
engaged in a professional activity will be taxed 1.5 percent on the value of their
tangible assets or inventories in excess of 500,000 cordobas obtained that year.

You are flat out wrong Riley about the economic conditions and total labor compensation of the workers. No need to debate this issue, I'm just posting current conditions. Conditions you refer to are dated.

I am 43 and have spent over 10% of my life in these countries, working and studying. Your assumptions from a business angle are mumbo jumbo.

You are responding to this message from michael d kugler on Sep 7 1997 4:00PM EST

Once again, your information is nothing short of stellar. Keep posting. Perhaps some of these guys will actually read your posts and learn something of relevance to this issue.

I wonder what Riley will say to your post, or if he will simply explain that it doesn't matter, and that his dated information may be dated all around. Gee, what if there's no short position left at all? What if it's old information too? There will be a lot of bag holders.

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