Bulgaria is one of the oldest European countries, with a history of twenty centuries and long-lasting traditions. Modern Bulgaria is perceived as a stable and rapidly advancing Eastern European country. It is strategically located at the crossroads of four European transport corridors, connecting Western and Northern Europe with the Eastern and Southern part of the continent. Bulgaria is also famous for its picturesque nature and rich cultural heritage.
More and more foreign businessmen and investors are targeting Bulgaria as a very attractive destination. Our country is among the youngest members of the European Union having joined in January 2007. EU membership has enhanced the overall perception of the country, has facilitated trade relations and, moreover, has paved the road for potential investors to safe and lucrative investments in Bulgaria, where favorable business environment and reliable partners are easy to find.
Preferred place for investment
Qualified labour force Labour force in Bulgaria is highly-qualified and multilingual, well-motivated, flexible and loyal to the employer. 22% of our population hold university degrees and a high percentage of the rest have completed general secondary or vocational education. Many Bulgarians have a strong background in IT, engineering, medicine or economics. Workers’ aptitude and reasonable labour cost play a significant role in attracting foreign investors in Bulgaria. Along with qualified labour force, Bulgaria boasts the lowest operational costs in Europe.
First among CEE countries Bulgaria has attracted 20% of all FDI in Southeastern Europe, and ranks first in FDI as percent of GDP among Central and Eastern European countries. EUR 5.96 billion, (or 23.6% of GDP), were invested in 2006 – 89% growth compared to 2005. In 2007, Bulgaria attracted a record high EUR 6.1 billion of FDI, or 21.1% of GDP. The majority of FDI in 2007 were greenfield investments. Thanks to EU entry and economic stability since 1997, FDI inflows during the last two years exceeded the FDI investments for the whole period of 1990-2005. In the first six months of 2008, continuous foreign interest was registered – the Bulgarian National Bank estimated FDI at EUR 2,079 million in the first half of the year, which is very close to the amount for the same period last year. We expect foreign direct investments in 2008 to be at a level of 2007 at least, despite of the global financial crisis.
New investment encouragement law InvestBulgaria Agency has accepted more than 30 greenfield investment applications for class “A” and class “B” certification under the new Investment Encouragement Law, enforced in August 2007. A number of amendments and supplements were introduced, drawing on the enforcement experience of the last three years, and aiming at harmonisation with EU legislation. Our government now fosters high-value-added investments with export potential, in three areas – manufacturing, production of electricity from renewable energy sources, and in the field of services - high-tech activities in computer technologies, research and development, education and human healthcare.
Investment encouragement measures
General measures for encouragement of entrepreneurs apply to all class “A” and class “B” investments, certified under the new Investment Encouragement Law. These general incentives comprise faster administrative servicing, preferential treatment for obtaining ownership or limited property rights over real estate – private state or private municipal property, as well as financial support for vocational training of employees up to 29 years of age for the needs of the investment project. Class “A” investment projects enjoy personalised administrative servicing and financial support for infrastructure to the borders of the investment project site. Investors also benefit from certain provisions in the Corporate Income Tax Law, the Value Added Tax Law and from the Law on Encouragement of Employment, provided they meet certain criteria. In addition, investors may use EU Structural Funds to further support their investment projects in Bulgaria.
There are many new business opportunities in Bulgaria. Most investors are driven by common interests, like maintaining or increasing market share, delivering new products, reducing costs, expanding R&D budget, and, last but not least, developing knowledge-based industry and finding new talents. The chemical industry, electrical and mechanical engineering, electronics and manufacturing of auto parts are all areas with strong traditions in Bulgaria, boasting skilful workers at reasonable costs. Greenfield operations, acquisition of existing companies, joint-ventures and contract manufacturing in these business fields are considered highly profitable. In the power engineering sector there are investment opportunities in segments such developing a new nuclear power plant, modernization and construction of new thermal power plants and construction of hydropower plants, wind parks or solar plants. Modernization and development in this sector is a governmental priority. During the last three years, BPO operations, mainly in IT support and administrative and financial services, have been rapidly expanding in Bulgaria, thanks to our talent pool with good language skills and competitive real estate prices. The country’s financial stability, the well-developed banking system and the expanding array of banking services – all these factors will soon make our country a financial center of the region.
Invest Bulgaria AgencyInvestBugaria Agency is a government agency, whose mission is to attract investments and to assist companies with the successful execution of their investment projects resulting in new job creation, increased exports of goods and services as well as inflow of know-how, ultimately aiming at boosting Bulgaria’s economy. Explore the possibilities of doing business in Bulgaria at: www.investbg.government.bg
Invest in Bulgaria – your business partner in New Europe