(Tuesday, 13th November 2018)
General economic and investment profile of Bulgaria
Bulgaria ranks third in the world on numbers of historical landmarks, after Italy and Greece. It is rich in unique mineral springs with therapeutic properties. The country is the best outsourcing destination in Europe, according to Cushman & Wakefield’s rating for 2015. Globally, Bulgaria takes third place (Where in the World? Business Process Outsourcing (BPO) & Shared Service Location Index). There are about 50 companies producing components and systems for the global automotive industry. The parts for eight of every ten cars in Europe are produced in Bulgaria. The country is the biggest producer of lavender in the world. For the past three years, the country has managed to surpass France in this, historically the leader in this field. In 2013, Bulgaria also ranked as the largest exporter of sunflower seeds worldwide, with a 17.8% market share of exports in this commodity.
Why should you invest in Bulgaria?
1: Political and business stability
– EU, NATO and WTO member
– Currency board
– Low budget deficit and government debt
2: Competitive cost of doing business
– 10% corporate and personal tax rates
– Competitive cost of labour
– Favourable office rents and low cost of utilities
3: Access to markets
– European Union/EFTA
– Turkey/Middle East
4: Educated and skilled workforce
– 80,000 students abroad
– 25% of population holds a university degree
– 46% of population speaks at least one foreign language
5: Government incentives
– Social security benefits
– Tax benefits
– Vocational education benefits
Attractive opportunities for doing business in Bulgaria
0% corporate tax for investment in areas with high unemployment rate. 10% corporate tax, 10% personal income tax and 20% VAT.
– 0.078 €/kWh electricity price for industrial users
– 9.49 €/GJ gas price for industrial users
– €50.4 billion GDP for 2017
– €1.3 billion FDI inflow
– 1.6% HICP inflation rate
– €261 labour cost
– 2.8% budget deficit
– 3.4% real GDP growth
– 53 universities, colleges and higher schools
– 7% of the population holds an engineering degree
– 3.37 million labour force
– Industrial rents (in Sofia) from €2.5 (m2/month)
– Office rents (in Sofia) from €12 (m2/month)
– Water 1.09 (€/1m3)
• Established traditions and experience in the sector. One of the fastest growing sectors of the economy. The revenues of Bulgarian IT Companies grew by 11%. Over 4,300 students get a degree in IT each year. Bulgarian internet speed is one of the fastest in the world.
BUSINESS PROCESS OUTSOURCING (BPO)
• Bulgaria offers qualified and cost-effective workforce and advantageous rents for commercial space
• BPO sector generates over €964m revenues
• Bulgaria is the best outsourcing destination in Europe
• The average BPO company in Bulgaria provides services in more than 25 languages.
• Availability of experienced engineers
• Qualified assembly workforce at an affordable cost
• Easy access to EU, Russian and Middle Eastern markets
• More than 75% of the production of electronics manufactured in Bulgaria is exported
• Bulgarian universities are working together with the companies in the sector to create qualified workforce.
• Established traditions and experience in the sector
• Continuous growth between 2000 and 2015
• A qualified workforce at affordable price
• Easy access to the markets
• Networks of technical universities and colleges
• Available physical infrastructure.
FOOD AND BEVERAGE
More than 666,000 people work in this sector, which generates 5% of GDP and annual wages of €5,300 per employee. Bulgaria has a lot to offer to agricultural companies and manufacturers of food products. Some facts:
• 50% of Bulgaria is agricultural land
• agricultural land can be acquired against very favourable conditions
• there are excellent conditions for the cultivation of grains, fruits and vegetables
• the soil is ecologically clean and fertile
• products are high quality and organic
• there is a ban on genetically modified products
• the nation has a long history of agricultural production
• there are high standards regarding health protection and the environment
• there are no restrictions on foreign investments on agriculture and buying of agricultural plots
• there is a large pool of available specialist employees against the lowest costs of labour in Europe
• the country has various universities which specialise agriculture and food.
Residence permit through investment certificate
A long-term residence permit may be granted to a foreign citizen that performs activity for implementing and/or maintaining an investment which has received a certificate for class А, class B, or priority investment project, where the foreigner shall be:
• an associate or shareholder having registered shares owning not less than 50% of the registered company capital;
• proxy of the company or procurator entered in the Commercial Register, or
• employed under contracts of employment for the performance of a key and/or controlling function in the scientific research, manufacturing, marketing or other basic activity of the undertaking or another activity necessary for investment purposes.
Not later than the third year from the date of launching the investment project activity the threshold requirement for issuing a class B investment certificate under the Investment Promotion Act has to be reached in relation to the investments made and put into effect and/or the employment created as an average number of listed personnel.
The overall number of the persons that may receive a residence permit shall be:
• until reaching the threshold requirement for issuing class B investment certificate – up to three persons;
• after reaching the threshold requirement for issuing class B investment certificate, during the period of maintenance of the investment and job positions – up to eight persons.
The Ministry of Economy issues a certificate for compliance with the requirements which shall be used before the agencies for administrative control on foreign persons. The certificate shall be issued following a grounded presentation by the Bulgarian trade company of the necessity for residence of the foreign person in question with respect to the investment implementation and maintenance, and after assuming of an obligation by the company for prompt notification of the Ministry of Economy in case of termination of relations with the physical persons.
Citizenship through investment certificate
A person who has received a permanent residence permit on the basis of investment certificate may acquire Bulgarian citizenship without the need to prove a command of the Bulgarian language and without the need to be released from his or her previous citizenship.
When the associate or shareholder has at least a one year old permanent residence permit through investment certificate and during the year of the valid permit has maintained the investments made and exploited above the minimum threshold for the grant of Class A investment certificate under the terms and conditions of the Investment Promotion Act, which fact shall be verified by the Ministry of Economy. The foreigner may acquire citizenship through naturalisation without the need to prove a command of the Bulgarian language and without the need to be released from his or her previous citizenship.
In this cases the Bulgarian company must not:
• be declared in bankruptcy or undergoing a bankruptcy procedure, or have concluded out of court agreements with its creditors;
• be undergoing a liquidation procedure;
• have monetary obligations to the state or a municipality, established with an act in force issued by a competent authority, save in cases where the obligation has been deferred;
• have unpaid remuneration to employees established with an administrative penalty decree in force.
The inspection and control of the facts and conditions for citizenship shall be carried out on the basis of annual financial statements and reports on the activities of the company, verified by an auditor registered under the Independent Financial Audit Act, National Revenue Agency and municipalities references, as well as on the basis of other relevant documents.
InvestBulgaria Agency (IBA) is a government institution providing information, contacts and project management support to potential investors.
• Macroeconomic data on Bulgaria
• Data on operational costs
• Regional information
• Personalised administrative servicing
• Legal advice
• Liaison with central and local governments
• Liaison with branch chambers and NGOs