Why Invest in Bulgaria
Bulgaria outcompetes other EU member states by offering the best business opportunities for both companies and individuals:
- Membership in EU and NATO from January 2007, the official currency is the lev (BGN), which is pegged to the euro at the fixed rate of EUR 1 for BGN 1,95583;
- Bulgaria has different encouragement of capital investments law;
- Tax regime synchronized with EU legislation; Bulgaria’s political strategy is working to develop local businesses and attract foreign capitals;
- International agreements – Bulgaria has signed existing international treaties regarding double taxation;
- Good correlation between price and quality of main production factors;
- Highly skilled, multilingual and low-paid workers;
- Favorable conditions to purchase property in Bulgaria – good real estate conditions about renting and selling;
- Geographical location – situated on the Balkan Peninsula, between Europe and Asia, the country is the perfect choice for relocating a business. Important European transport corridors are passing through country’s territory: IV, VII, VIII, IX, X;
As a member of the EU, Bulgaria tooks significant place in Central Eastern Europe and attracts foreign capitals. This is due to political and macroeconomic stability in combination with various incentives for investors. In 2015 Bulgaria was ranked as the third most promising country in the world for setting up production, according to Cushman & Wakefield (annual index positioning in emerging markets). Plovdiv’s region posses all the necessary resources for business development – great location, very good logistic infrastructure connected with other cities, good human resources and educational infrastructure, friendly business administration. Over 51% of region’s economy is concentrated in manufacturing, with a total of 70,000 employees. In this part of Bulgaria – Thrace Economic Area has emerged as one of the biggest investment projects in the country.
Useful economic information
Signing of a Memorandum of Understanding (MoU) between the Government of Bulgaria and the World Bank, marks an important shift in our 20-year partnership toward greater focus on knowledge and advisory services to boost Bulgaria’s EU funds absorption and support the National Reform Program. The agreement was signed on January 22, 2012 by Minister in Charge of EU Funds Management,Tomislav Donchev, and World Bank Vice President for Europe and Central Asia, Philippe Le Houérou,at a high-profile ceremony that launched the government’s knowledge and advisory partnerships with international financial institutions (IFIs). The memorandum of cooperation with the World Bank is a natural extension of the possibility of EU funds’s usage.
Measures to encourage foreign investors:
Bulgaria offers various programs to promote employment and encourage foreign investors.
For a period of time foreign investors can benefit from financial assistance directly from Employment Agency as: opening new job position for unemployed, disabled workers, persons aged over 50, lone parents to maintain and upgrade the skills of employees and others.
Companies can also benefit from tax concessions for hiring on long-term unemployed, unemployed persons aged over 50 or disabled workers.
The Corporate Tax Rate in Bulgaria stands at 10 percent. Corporate Tax Rate in Bulgaria averaged 20.88 percent from 1995 until 2015, reaching an all time high of 40.20 percent in 1997 and a record low of 10 percent in 2007. Corporate Tax Rate in Bulgaria is reported by the National Revenue Agency, Bulgaria. Corporate tax can be reduced for hiring a large number of persons with disabilities. A significant condition for applying this promotional measure is to subsequently use the retained (unpaid) tax for a statutory designated purpose – Art. 178, para. 3 of CITA: “Retention shall be admissible where the tax retained is spent entirely on integration of people with disabilities or on the maintenance and creation of jobs for occupational rehabilitees for the two years succeeding the year for which the retention is applied. The said funds shall be planned, spent and accounted for by ordinances of the national organizations of and for people with disabilities in coordination with the Minister of Finance.”
The same conditions are valid if the production activity of the enterprise is carried out in municipalities with high unemployment. Some social outlays are not taxed. There are financial benefits for carrying professional training for acquiring qualification of persons occupying jobs related to investments maded in Bulgaria.
Information about engineering sector-benefits.
At present the mechanical engineering sector employs over 50,000 people with turnover amounted to € 1.03 billion. The sector is primary attached to other industries such as electronics. Reposition some of manufacturing activities (equipment and installation) from well developed countries to low-cost countries is today’s industry trend.
Agricultural machinery – Material handling equipment – Production of vehicles and parts – Heavy equipment investment – tools and metal working machines – Hydraulic Elements and Systems – Ship Building and Repairs – Military equipment in the branch ” Manufacture of machinery and equipment nec ” employed 30.4 thousand people (5.8 % of employed in industry ).
Level of wages in the sector is above the national average – the average monthly salary is 849 lev. in the field “Production of vehicles, car-free” 4.7 thousand people are employed. (0.9% of those employed in the industry). The level of wages in the sector is about average for Bulgaria- the average monthly salary is 738 lev. In branch “Manufacture of motor vehicles, trailers and semi-trailers’ 12.7 thousand people are employed. (2.4% employed in industry). The level of wages in the sector is about average – the average monthly salary is 702 lev.
The country offers a well skilled workforce emerging from technical schools and universities;
- 11% of students are enrolled in disciplines relevant to the needs of the chemical and related industries;
- 34% of students in professional schools studied related to the industry disciplines ;
- 43% of students in professional schools in the sector are concentrated in the cities of Sofia, Plovdiv, Burgas, Varna and Stara Zagora;
- Bulgarian educational system is perfectly tailored to the needs of the transport equipment and machinery sectors .
- 17% of graduates are potentially suitable for the industry;
Professional schools offer a wide variety of industrial courses suitable for the sector;
- About 140,000 students in professional schools;
- During 2013/2014 school year in Bulgaria there was about 66,000 students at 22 universities and colleges who are studying transport, mechanical engineering, electrical engineering and other related to sector profession ;