Invest in Bulgaria now
Bulgaria is one of the oldest European States with 20-century-old history and traditions. Modern Bulgaria is perceived as a stable, progressive Eastern European country with a strategic geographical location. Four common European transport corridors, connecting West and North Europe with the eastern and southern part of the continent, cross their roads here. Bulgaria is also known for its picturesque nature and rich cultural heritage.
Bulgaria is among the youngest members of the European Union. EU membership has raised the general awareness of the country and heightened the interest of foreign investors. The great potential represented by free access to the single European market (the biggest market in the world), the proximity of new, not yet saturated markets, and the country’s logistically strategic Southeastern European location were factors in many investors’ recent investment decisions.
Bulgaria is experiencing a period of strong economic growth which at 6.1% last year, from 6.2% in 2005 and 6.6% in 2004, leads most economies in Europe. Bulgaria's economy has continued to grow steadily so far this year, with analysts and the International Monetary Fund (IMF) predicting Gross Domestic Product (GDP) growth of over 6% by year-end. Foreign Direct Investment (FDI) continues to be a key driver of economic growth, unemployment continues to fall and inflation is under control. Growing investment and export have been the major contributors to the economic development of the country. The challenge ahead is to maintain this high growth rate of Bulgaria’s Gross Domestic Product and to support it by an adequate level of FDI and export.
Macroeconomic and political stability is already in place in Bulgaria. The legislation is harmonized with the EU standards. The fiscal policy of the government is the one of the most attractive. The corporate income tax is 10%, the lowest in the EU. Due to the fact that Bulgarian currency “Lev” (BGN) is pegged to Euro (Euro1.0 = BGN1.95583), practically, there is no currency risk doing business in Bulgaria. Since 2000 credit rating of Bulgaria has been increased over 25 times and now the country has an investment credit rating by the main credit rating agencies, Fitch, Japan Credit Rating, Standard & Poor’s and Moody’s
Bulgaria can offer highly qualified, multilingual labour force, well motivated, flexible and loyal to the employer. 22% of population holds university degree. A high percentage of the work force has completed some form of secondary, technical, or vocational education. Many Bulgarians have strong backgrounds in engineering, medicine, economics and the sciences. The aptitude of workers and the relative low cost of labor are considerable incentives for foreign companies to invest in Bulgaria. We should add here that the country is with the lowest operational cost in Europe. The society is tolerant and friendly to foreigners and last but not least, there is excellent climate, natural scenery, food and hospitality.
All above is good enough explanation why Bulgaria is considered good location for investment and last year (2006) was with a record inflow of Foreign Direct Investments (FDI), USD 5.102 billion. Bulgaria is a leader in Europe in FDI to GDP indicator with 16.4% for 2006. This inflow represents a quarter of the FDI stock (around 20 billion) for the whole 17-year transition period. Half of these investments – around USD 10 billion, were accumulated during the past thee years only. This proves that EU membership of Bulgaria is a strong motivation for the entrepreneurs; their confidence in the country is increased and this is quite positively affecting the investment process. We anticipate this trend to continue. Many new fields for business development exist in Bulgaria.
Manufacturing is the main beneficiary with 25% followed by finance (21%), trade (15%) and real estate (16%) – the latter considered being the fastest growing sector in the country with FDI inflow amounting to (EUR 1.262 m) for 2006. The biggest investors by countries are Austria (16%), followed by the Netherlands, Greece, UK and Germany, most of them drawn to the country by the same shared reasons: to protect/grow market share, deliver new products, reduce costs, stretch R&D budgets, but most importantly for knowledge-based industry, quality and new talent.
Business sectors of highest potential
Electrical and mechanical engineering, electronics and manufacturing of miscellaneous automotive parts are areas where Bulgaria has traditions, offers skills at reasonable cost as well as reliable suppliers and subcontractors. Greenfield operations, acquisition of existing companies, joint-ventures as well as contract manufacturing in these business fields are considered profitable.
For the last two years the BPO operations, mainly for IT support as well as administrative and financial services, are rapidly expanding in Bulgaria due to the talent pool with good language skills and the competitive real estate prices.
In power engineering sector the investment opportunities are in: new nuclear power plants, modernization and construction of new thermal power plants, wind parks and solar plants. Modernization and development in this sector is a priority for the government.
Investment legislation
The Investment Encouragement Act regulates the terms and procedures of investing in Bulgaria. According to this low certified investors are getting a wide package of information services, speeded-up administrative services, as well as infrastructure support and assistance with real estate “titling” issues. Investors could also get certain benefits on the basis of the Corporate Income Tax Act, the Value Added Tax Act and Encouragement of Employment Act if they meet the required conditions. Investors in Bulgaria could use EU Structural Funds as an additional subsidizing for execution of their investment projects.
InvestBugaria Agency is an Executive Agency of the Government of Bulgaria under the supervision of the Ministry of Economy and Energy. The mission of the Agency is to attract investments to Bulgaria, assist project set-up and ensure successful project development resulting in new jobs, as well exports and know-how transfer for the Bulgarian economy.
We would kindly invite you to explore the investment opportunities in Bulgaria by visiting www.investbg.government.bg.
We also would like to extend our warmest invitation to you to go and visit Bulgaria where you will encounter business and investment opportunities you would not have expected.
Welcome to Bulgaria, your new business partner in New Europe