Bulgaria – investment climate and business
opportunities
Bulgaria – geographic location

Strategic geographic location in South-East Europe

Offers direct access to markets like: EU, Russia, Turkey and The Middle East

5 Pan-European transport corridors pass through Bulgaria
Why invest in Bulgaria?
 Political and business stability
−
EU member
−
Currency board
−
Low budget deficit and government debt
 Low cost of doing business
−
10% corporate tax rate (0% in high unemployment areas)
−
10% personal income tax
−
Lowest cost of labor within EU
−
Favorable office rents and low cost of utilities
 Access to markets
−
European Union / EFTA
−
Russia
−
Turkey / Middle East
 Educated and skilled workforce
 Government incentives
Macroeconomic indicators
Real GDP Growth
Bulgarian
6.5%
6.4%
Inflation (HICP)
EU-28
Bulgarian
EU-28
6.2%
0.4%
1.8%
0.8%
0.9%
0.4%
-5.5%
2006
2007
2008
2009
2010
2011
2012
2013
2007
2008
2009
2010
2011
2012
2013
2014*
1,151
1,330
1,141
1,156
2010
2011
2012
2013
* September
Unemployment
Bulgarian
FDI Inflow
€ mln.
EU-28
9,052
9.2%
6,728
6,222
6.3%
2,437
2007
2008
2009
2010
* September
Source: Bulgarian National Bank, Eurostat
2011
2012
2013
2014
2006
2007
2008
2009
FDI in Bulgaria comes mostly from EU countries and is
concentrated in four main sectors
FDI by host country, 1996-2013 (€ mln.)
(1) Netherlands
FDI flows by industry, 1996-2013 (€ mln.)
6376.3
(2) Austria
Manufacturing
7683.5
5639.3
Finance
(3) Greece
3537.5
(4) Germany
Real Estate
7431.8
6833.8
2815.3
(5) UK
2369.8
Trade
(6) Cyprus
2097.4
Energy
(7) Russia
3779.3
1849.1
Construction
(8) USA
1443.4
(9) Italy
1402.7
(10) Switzerland
1367.5
Telecom
Source: Bulgarian National Bank
7508.8
Other
2878.9
2015.2
3405.3
Government financial indicators
Average government debt (2007-2012)
140%
Greece
130%
120%
Italy
110%
100%
80%
70%
Belgium
Portugal
90%
Ireland
60%
50%
40%
30%
20%
10%
Iceland
France
Hungary
Germany
United Kingdom
Austria
Malta
Netherlands
Poland Cyprus
Spain
Turkey
Sweden
Denmark
Latvia Slovakia
Czech Republic
Finland
Norway
Slovenia
Croatia
Romania
Lithuania
Bulgaria
Luxembourg
Estonia
0%
-13%
-12%
-11%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
15%
Average budget deficit/surplus (2007-2012)
Source: Eurostat
Bulgaria was the only European country with increased
credit rating by Moody’s in 2010 and 2011
Country credit ratings comparison Q2 2014
S&P Rating
Country
Moody's rating
Fitch Rating
TE Rating*
Czech Republic
AA-
Stable
A1
Stable
A+
Stable
79.28
Stable
Poland
A-
Stable
A2
Stable
A-
Stable
67.41
Stable
Italy
BBB
Negative
Baa2
Negative
BBB+
Negative
62.09
Negative
Bulgaria
BB+
Stable
Baa2
Stable
BBB-
Stable
54.24
Stable
Spain
BBB-
Stable
Baa3
Negative
BBB
Negative
52.55
Negative
Croatia
BB+
Stable
Baa3
Negative
BBB-
Negative
48.85
Stable
Macedonia
BB
Stable
BB+
Stable
47.5
Stable
Romania
BB+
Stable
Baa3
Negative
BBB-
Stable
47.35
Stable
Turkey
BB+
Stable
Ba1
Positive
BBB-
Stable
44.58
Stable
Hungary
BB
Stable
Ba1
Negative
BB+
Stable
42.58
Stable
Serbia
BB-
Negative
BB-
Negative
Ukraine
B
Negative
B
Stable
Caa1
Negative
*The TE credit rating is driven by a model created at Trading Economics.
Source: Trading Economics Rating
40
Negative
28.75
Negative
The lowest taxes in EU
Country comparison
Income Tax (%)
Social Security (%)
Country
VAT (%)
Corporate
Individual
Employer
Employee
Bulgaria(*)
10
10
17,9-18,5
12,9
20
Serbia
15
10-20
16,9
16,9
20
Romania
16
16
28,45
16,5
24
Hungary
10/19
16
28,5
18,5
27
Czech Rep.
19
22
34
11
21
Poland
19
18/32
22,14
13,7
23
Turkey
20
15-35
27
15
18
Slovakia
23
19-25
34,8
13,4
20
UK
23
0-45
13.8
12
20
Italy
27,5
23-43
30
10
21
30
24,75-52
29,9
6,35
21
30-33
(effective)
14-45
19,7
20,6
19
33,33
5,5-41
50
20
19,60
Spain
Germany
France
Source: Worldwide-tax
Bulgaria has one of the lowest business costs in Europe
Gas prices for industrial users in Europe
Electricity prices for industrial users in Europe
€/Gigajoule, 2013
Czech Republic
Bulgaria
€/kWh, 2013
9.00
Bulgaria
9.89
0.080
Estonia
0.084
0.086
Poland
10.06
Germany
Austria
10.17
Turkey
0.089
Italy
10.53
Romania
0.090
EU average
10.56
Hungary
0.090
Spain
10.65
EU average
France
Germany
Source: Eurostat
11.03
12.23
Czech Rep
Slovakia
0.094
0.101
0.124
Salaries in Bulgaria
Average salary by position, EUR per month
Labour cost /
Salary
In EUR, per
month
% of
the
Gross
Salary
Top
Management
Management
R&D
Engineers
Low
High
Low
High
Low
Unskilled
labor
Technicians
Skilled labor
High
Low
High
Low
High
Low
High
Net Salary
Employee
77,1%
924
1925
576
770
539
693
347
462
285
385
216
270
Gross Salary
Employee
100%
1200
2500
750
1000
700
900
450
600
370
500
280
350
Total Cost for
Company
117,9%
1415
2948
884
1179
825
1061
531
707
436
590
330
413
Average gross salary by region, EUR per month
Statistical region
2013.09
North-West
North Central
North-East
South-East
South-West
South Central
326
330
369
370
505
331
Source: IBA Analysis, National Statistics Institute
Students in Bulgaria by narrow field of education in universities
and colleges in 2012/13 academic year
Business and administration
67113
38581
Engineering and engineering trades
31322
Social and behavioural science
20291
Health
18843
Teacher training and education science
13735
Humanities
Law
10779
Personal services
10469
Architecture and building
9095
Computing
9033
Agriculture, forestry and aquacultures
5044
Manufacturing and processing
4236
Physical and chemical sciences
Mathematics and statistics
3595
536
A big number of students study in universities in Europe and USA
TOTAL: 283 959
(‘Bachelor’, ‘Master’, ‘Doctor’)
Source: National Statistics Institute
Bulgaria has highly-qualified, well-motivated, flexible and
multilingual labour force
 53 Universities, colleges and higher schools
Number of universities in some of the biggest cities
 494 Vocational gymnasiums and colleges
 80000 Bulgarian students in foreign countries
Blagoevgrad
 24,6% Population hold university degree
2
 7% Workforce has engineering degrees
 45,5% Population speak at least one foreign language
 85% Students studied English
Veliko Tarnovo
Burgas
3
2
Varna 1 2
Total number of higher schools*
53
Universities and equivalent higher schools
45
Plovdiv 1 2
Sofia
Colleges
6
6
3
12
29
Independent colleges
8
Colleges, at the universities and
equivalent higher schools
21
*Incl. universities and equivalent higher schools and independent
colleges
Source: National Statistics Institute
3
Other
Business field
Technical sciences
The government supports specific industries under the
Investment Promotion Act (IPA)


Investments must be related to the following sectors:
−
Manufacturing
−
Research & development
−
Education
−
Healthcare
−
High-tech services
−
Warehousing and logistics
Minimum investment amounts must exceed €2.5m
−

€1m in regions with high unemployment and €0.5m for
investment projects in high-tech services
Benefits for certified investors include:
−
Shortened administrative procedures
−
Preferential acquisition of state or municipal land
−
Financial support for professional training / education
−
Infrastructure subsidies
−
Labor cost subsidies
−
Individual administrative services
Biggest investors are supported through a priority
investment scheme

Priority projects can be related to all sectors of the
economy, which do not contradict regulation 800/2008 of
the European Commission
−


Subsidies not allowed in mining, primary agriculture
production, and shipbuilding
Priority projects should exceed €50m and create at least
200 new working places for a 3-year period
−
€25m + 100 working places for certain manufacturing projects
−
€10m + 50 working places for high-tech services and R&D
Priority projects receive all benefits for certified investors,
as well as the following:
−
Lowest possible costs for the acquisition of government and
municipal land + waived taxes for land status changes
−
Working group for project support is assigned by the Council
of Ministers
−
Financial grant scheme for up to 10% of the investment
project cost (50% for R&D)
Attractive FDI sectors



Services:
−
Transport and Logistics
−
Information technologies
−
Outsourcing of business processes
−
Health and tourism related to healthy
lifestyle
Industry:
−
Transport equipment and machine
building
−
Electronics and Electrical engineering
−
Chemical industry
−
Food and Agriculture
Resources:
−
Mineral water
−
Tourism
−
Balneology
−
Alternative energy
Leading global investors have chosen Bulgaria
IT development
Back office
operations
Chemical and metal
Industry
Engineering
Food
Invest Bulgaria Agency
InvestBulgaria Agency is a Government investment
promotion arm, part of the Ministry of Economy and Energy
IBA services:
 Macroeconomic data on Bulgaria
 Legal advice
 Data on operational costs
 Regional information: industrial zones and infrastructure,
data on unemployment, skilled labour force and level of
education
 Recommendation of investment project sites
 Identification of potential suppliers, contract
manufacturers and joint-venture partners
 Personalized administrative servicing
 Liaison with central and local governments
 Liaison with branch chambers and NGOs
InvestBulgaria Agency
Sofia 1000, 31 Aksakov Str.
Phone: (+359 2) 985 5500
Fax: (+359 2) 980 1320
E-mail: iba@investbg.government.bg
Web: www.investbg.government.bg