WHY INVEST IN BULGARIA?

Bulgaria is seen by many investors as an attractive low-cost investment destination, with government incentives for new investment. The country offers some of the least expensive labor in the European Union (EU) and low and flat corporate and income taxes.

In 2021 Bulgaria continued to suffer from the COVID-19 pandemic and related shutdowns, although the impact on the economy was less severe than in many other European countries. The Bulgarian economy declined 4.4 percent in 2020, rebounded to 4.2 percent growth in 2021, and is projected to grow by 4.8 percent in 2022.

Bulgaria is expected to receive EUR 6.2 billion over a six-year period (2021-2026) from the EU’s post-COVID recovery grant funds to improve its economy in areas such as green energy, digitalization, and private sector development.

The government expects to adopt the Euro in early 2024, after having joined the European Exchange Rate Mechanism (ERM II) in July 2020 and the EU’s Banking Union in October 2020. The adoption of the euro will eliminate currency risk and help reduce transaction costs with some of the country’s key European trading partners.

There are no legal limits on foreign ownership or control of firms. With some exceptions, foreign entities are given the same treatment as national firms and their investments are not screened or otherwise restricted. There is strong growth in software development, technical support, and business process outsourcing. The Information Technology (IT) and back-office outsourcing sectors have attracted a number of U.S. and European companies to Bulgaria, and many have established global and regional service centers in the country. The automotive sector has also attracted U.S. and foreign investors in recent years.

Political and Business Stability

Bulgaria is a member of the European Union, NATO, and WTO

The stability of the currency is supported by the currency board, pegging the Bulgarian lev to the euro at the level of 1.96

Low Cost of Doing Business

Bulgaria has one of the most favorable tax regimes in Europe. The corporate income tax rate is 10%, the lowest in the EU. Personal income tax is 10 %, a flat rate. Industries in high-unemployment areas are granted a 0% tax rate

There is a 2-year VAT exemption for imports of equipment for investment projects over €5 million, creating at least 50 jobs

Depreciation time for computers and new manufacturing equipment is 2 years

5% withholding tax on dividends and liquidation quotas (0% for EU tax residents)

Bulgaria has one of the most competitive costs of labor in Central and Eastern Europe

Favorable office rents and low cost of utilities. Bulgarian cost of electricity for industrial users is 70% of the European average

Strategic Location

Located at the heart of the Balkans, Bulgaria is a strategic logistics hub. Ease of transportation of cargo is provided by:

• Five Pan-European corridors ( IV, VII, VII, XI, X), which pass through the country
• Transport program TRACECA, which connects Europe with Caucasian and Central Asian region
• Four major airports: Sofia, Plovdiv, Bourgas and Varna
• Two main seaports: Varna and Bourgas
• Numerous ports at the Danube River

Access to Markets

Due to its location Bulgaria provides direct access to the following key markets:

• European Union – zero tariff market with a population of 500 million
• CIS – still not a well-penetrated market with a high potential
• Turkey – zero tariff market of nearly 80 million population
• Middle East – a market with high purchasing power
• North African Market
• Highly-Skilled Human Resources

Work force is well-educated, highly skilled, and multilingual

• 62.2 % of the total population is in working age (appr. 4.6 million)
• 60 000 students annually graduate from 51 universities
• 98% of the high school students study a foreign language (usually English) and 73% study a second language (mainly German, French, Spanish, or Russian)
• 94% of the schools have Internet access