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June 2014

Bulgaria
Investment climate and business opportunities
Investments and economic relations

Why invest in Bulgaria?

Government incentives
FDI Inflow:
Source: Bulgarian National Bank
In million euro
Investments and economic relations
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2006 2007 2008 2009 2010 2011 2012 2013
6222
9052
6728
2437
1151
1330
1070 1092
FDI Inflow:
Source: Bulgarian National Bank
0 2000 4000 6000 8000
Real Estate
Finance
Trade
Manufacturing
Energy
Construction
Telecom
Other
7936,9
7479,3
7059,5
7056,2
3490.6
2948.3
2647.4
3207.8
FDI flows by industry,
1996-2013 ( mln.)
Investments and economic relations
0 1000 2000 3000 4000 5000 6000 7000
Netherlands
Austria
Greece
Germany
UK
Cyprus
Russia
USA
Italy
Switzerland
6306,2
5750,9
3560.1
2745.4
2383.6
2089.4
1855.3
1439.7
1401.6
1347.2
FDI by Host Country,
1996-2013 ( mln.)
The role of Italy as a trade partner for Bulgaria:
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1043.2
1132.5
1216.5
1392.2
1271.9
1092.6
1511.2
1760.8 1763.8
1925.9
1141.6
1318.4
1626.3
1872.3
1981.4
1334.4
1458
1695.9
1675.2
1892.8
Export Import
Investments and economic relations
.. Bulgarian trade relations
Why invest in Bulgaria?
WHY INVEST IN BULGARIA?
Political and business stability
EU and NATO 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
Real GDP Growth:
Source: Eurostat
-6
-4
-2
0
2
4
6
8
2006 2007 2008 2009 2010 2011 2012 2013
3.4
3.2
0.4
-4.5
2
1.7
-0.4
0.1
6.5
6.4
6.2
-5.5
0.4
1.8
0.6
0.9
EU Bulgaria
Why invest in Bulgaria?
Taxation in Bulgaria:
Source: Worldwide - tax
Country
Income Tax (%) Social Security (%)
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
Spain 30 24, 75-52 29.9 6.35 21
Germany
30-33
(effective)
14-45 19.7 20.6 19
France 33.33 5.5-41 50 20 19.6
Why invest in Bulgaria?
Business costs in Bulgaria:
Why invest in Bulgaria?
Location Price Q1 2013, EUR/sq m/month
Office prime rent in Sofia CBD Class A 10-12
Office prime rent in Sofia non CBD Class A 8 11
Office rent in Sofia Class B 5 8
Office prime rent in Plovdiv Class A 4 - 6
Office prime rent in Varna Class A 3 6
Office prime rent in Burgas Class A 3 - 5
Prime rent for contemporary industrial space 3-5
Industrial construction Prime industrial and
logistics, Sofia region EUR/sq m/ 350-450
Business costs in Bulgaria:
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00
Czech Rep.
Bulgaria
Poland
Austria
Italy
EU Average
Spain
France
Germany
9.00
9.89
10.06
10.70
10.53
10.56
10.65
11.03
12.23
Gas prices for industrial users in
Europe
0.000 0.020 0.040 0.060 0.080 0.100 0.120 0.140
Bulgaria
Estonia
Germany
Turkey
Romania
Hungary
EU Average
Czech Rep.
Slovakia
0.080
0.084
0.086
0.089
0.090
0.090
0.094
0.101
0.124
Electricity prices for industrial
users in Europe
/GJ, 2013 /kWh, 2013
Source: Eurostat
Why invest in Bulgaria?
Potential fields of collaboration
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 bottled water
Sea and winter resorts
Balneology
Why invest in Bulgaria?
Government incentives
Government incentives
Legal framework for investing in Bulgaria:
Equal treatment of Bulgarian and foreign investors

Thresholds of investments that need to be covered in
order to apply for investment certificate Class A, B
and Priority investment projects

Business plan and several standard documents
required
Government incentives
Investment incentives under the Investment Promotion Act:
Acquiring state or municipal land without a tender procedure
(investments Class A and B)

Financial support for construction of technical infrastructure
elements (only for class A)

Acquiring state or municipal land without a tender procedure on a
lower cost, but not lower than the price evaluation for tax
purposes (Priority investments)

Lower tax rate on changing the status of the acquired land
(Priority investments)
The incentives for class A and B could be:
Shortened administrative procedures
Reimbursement of labor costs paid by the employer
Financial support of up to 25% of the entire costs for specific
training of minimum 50 employees
The incentives for Priority investment projects
could be:
All the incentives for Class A and B
Financial grants of up to 50% for education and
R&D projects;
and up to 10% for manufacturing projects


Government incentives
Investment incentives under the Investment Promotion Act:
Legal framework for investing in Bulgaria:
Government incentives
Tax incentives:
10 % corporate tax (flat rate)
0 % corporate tax in areas with high unemployment rate
10 % personal income tax rate (flat rate)
VAT exempt for import of equipment for investment projects
Thank you
for your attention!
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

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