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Bulgaria – investment climate and business opportunities
Bulgaria – geographic location
EU and EFTA
Rus
sia
and
CIS
Turkey and
Middle East
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 Inflation (HICP)
Unemployment FDI Inflow
Source: Bulgarian National Bank, Eurostat
0.9%0.8%1.8%
-5.5%
6.2%6.4%6.5%
2013201220112010
0.4%
2009200820072006 2014*2013
0.4%
201220112010200920082007
20142013201220112010
9.2%
20092008
6.3%
2007
EU-28Bulgarian EU-28Bulgarian
2013
1,156
2012
1,141
2011
1,330
2010
1,151
2009
2,437
2008
6,728
2007
9,052
2006
6,222
€ mln.EU-28Bulgarian
* September
* September
FDI in Bulgaria comes mostly from EU countries and is concentrated in four main sectors
Source: Bulgarian National Bank
FDI by host country, 1996-2013 (€ mln.) FDI flows by industry, 1996-2013 (€ mln.)
3405.3
Telecom 2015.2
Construction 2878.9
Energy 3779.3
Trade 6833.8
Real Estate 7431.8
Finance 7508.8
Manufacturing 7683.5
Other(10) Switzerland 1367.5
(9) Italy 1402.7
(8) USA 1443.4
(7) Russia 1849.1
(6) Cyprus 2097.4
(5) UK 2369.8
(4) Germany 2815.3
(3) Greece 3537.5
(2) Austria 5639.3
(1) Netherlands 6376.3
Government financial indicators
Source: Eurostat
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
Greece
Ireland
Estonia
Germany
DenmarkCzech Republic
Bulgaria
Belgium
Average budget deficit/surplus (2007-2012)
Poland
-6% -5% -4% -3% -2%-13% -12% -11% -1%
Latvia
Cyprus
Italy
Romania
Hungary
MaltaNetherlands
Austria
Portugal
Lithuania
Luxembourg
Spain
FranceIceland
United Kingdom
Sweden
-7%
FinlandSlovakia
Slovenia
15%1%0%
Turkey
CroatiaNorway
Average government debt (2007-2012)
Bulgaria was the only European country with increased credit rating by Moody’s in 2010 and 2011
*The TE credit rating is driven by a model created at Trading Economics.
Source: Trading Economics Rating
Country credit ratings comparison Q2 2014
Country S&P Rating 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 40 Negative
Ukraine B Negative Caa1 Negative B Stable 28.75 Negative
The lowest taxes in EUCountry comparison
CountryIncome 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
Germany30-33
(effective)14-45 19,7 20,6 19
France 33,33 5,5-41 50 20 19,60
Source: Worldwide-tax
Bulgaria has one of the lowest business costs in Europe
Gas prices for industrial users in Europe
Source: Eurostat
0.124
0.101
0.094
0.090
0.090
0.089
0.086
0.084
0.080
Hungary
Romania
Turkey
Germany
Estonia
Bulgaria
Czech Rep
EU average
Slovakia
€/kWh, 2013€/Gigajoule, 2013
Electricity prices for industrial users in Europe
12.23
11.03
10.65
10.56
10.53
10.17
10.06
9.89
9.00
EU average
Austria
Poland
Bulgaria
Czech Republic
Italy
Germany
France
Spain
Salaries in Bulgaria
Source: IBA Analysis, National Statistics Institute
Average salary by position, EUR per month
Labour cost / Salary
% of the Gross Salary
Top Management
ManagementR&D
EngineersTechnicians Skilled labor
Unskilled labor
In EUR, per month
Low High Low High Low 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 North-West North Central North-East South-East South-West South Central
2013.09 326 330 369 370 505 331
536
3595
4236
5044
9033
9095
10469
10779
13735
18843
20291
31322
38581
Physical and chemical sciences
Manufacturing and processing
Agriculture, forestry and aquacultures
Computing
Mathematics and statistics
Architecture and building
Personal services
Law
Humanities
Teacher training and education science
Health
Social and behavioural science
Engineering and engineering trades
Business and administration 67113
TOTAL: 283 959 (‘Bachelor’, ‘Master’, ‘Doctor’)
Students in Bulgaria by narrow field of education in universities and colleges in 2012/13 academic year
Source: National Statistics Institute
A big number of students study in universities in Europe and USA
Bulgaria has highly-qualified, well-motivated, flexible and multilingual labour force
53 Universities, colleges and higher schools
494 Vocational gymnasiums and colleges
80000 Bulgarian students in foreign countries
24,6% Population hold university degree
7% Workforce has engineering degrees
45,5% Population speak at least one foreign language
85% Students studied English
Total number of higher schools* 53
Universities and equivalent higher schools 45
Colleges 29
Independent colleges 8
Colleges, at the universities and equivalent higher schools
21
*Incl. universities and equivalent higher schools and independent colleges
2
3
2
2
2
3
3
6
12
1
Blagoevgrad
Sofia 6
Plovdiv
Burgas
Varna
Veliko Tarnovo
1
Number of universities in some of the biggest cities
Business field Technical sciencesOther
Source: National Statistics Institute
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
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 is a Government investment promotion arm, part of the Ministry of Economy and Energy
InvestBulgaria Agency
Sofia 1000, 31 Aksakov Str.
Phone: (+359 2) 985 5500
Fax: (+359 2) 980 1320
E-mail: [email protected]
Web: www.investbg.government.bg