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Bulgaria – investment climate and business opportunities

Discover why investing in Bulgaria is a smart choice. Benefit from its strategic geographic location, stable political and business environment, low business costs, and access to markets like EU, Russia, Turkey, and the Middle East.

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Bulgaria – investment climate and business opportunities

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  1. Bulgaria – investment climate and business opportunities

  2. Bulgaria – geographic location Russia and CIS EU and EFTA 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

  3. 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

  4. 2 Macroeconomic indicators Real GDP Growth Inflation (HICP) Bulgarian EU-28 Bulgarian EU-28 2 0.4% 2007 2008 2009 2010 2011 2012 2013 2014* 2007 2008 2009 2010 2011 2012 2013 2014* *December *December Unemployment FDI Inflow € mln. Bulgarian EU-28 9,052 10.3% 6,728 5.6% 2,437 1,289 1,151 1,330 1,141 1,275 2014* 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 2014 *Preliminary data Source: Bulgarian National Bank, Eurostat, NSI

  5. FDI in Bulgaria comes mostly from EU countries and is concentrated in four main sectors FDI by host country, 1996-2014 (€ mln.) FDI flows by industry, 1996-2014 (€ mln.) (1) Netherlands 7023.3 Real Estate 7816.6 5944.7 (2) Austria 7802.0 Manufacturing (3) Greece 3580.8 Finance 7584.7 (4) UK 2604.5 Trade 6744.4 (5) Germany 2417.2 (6) Cyprus 2103.9 Energy 4197.7 (7) Russia 1961.7 Construction 2948.6 (8) Switzerland 1623.0 Telecom 1875.7 (9) USA 1605.4 Other 4730.7 (10) Italy 1488.7 Source: Bulgarian National Bank

  6. 0 Government financial indicators Average government debt (2008-2013) Greece Italy Belgium Portugal Iceland France Hungary Ireland Germany United Kingdom Austria Malta Netherlands Cyprus Poland Spain Turkey Sweden Denmark Slovakia Latvia Czech Republic Finland Norway Slovenia Croatia Romania Lithuania Bulgaria Luxembourg Estonia -13% -12% -11% -7% -6% -5% -4% -3% -2% -1% 0% 1% 15% Average budget deficit/surplus (2008-2013) Source: Eurostat

  7. Bulgaria’s credit rating 2014 *The TE credit rating is driven by a model created at Trading Economics. Source: Trading Economics Rating

  8. The lowest taxes in EUCountry comparison Source: Worldwide-tax

  9. . Bulgaria has one of the lowest business costs in Europe Gas prices for industrial users in Europe Electricity prices for industrial users in Europe €/Gigajoule, 2014 €/kWh, 2014 Czech Republic Bulgaria Bulgaria Estonia Poland Germany Austria Turkey Italy Romania EU average Hungary Spain EU average France Czech Rep Germany Slovakia Source: Eurostat

  10. S Salaries in Bulgaria Source: IBA Analysis, National Statistics Institute

  11. 0 Students in Bulgaria by narrow field of education in universities and colleges in 2013/14 academic year 67113 Business and administration Engineering and engineering trades Social and behavioural science Health Teacher training and education science Humanities Law Personal services Computing Architecture and building Agriculture, forestry and aquacultures Manufacturing and processing Physical and chemical sciences Mathematics and statistics TOTAL: 277 239 (‘Bachelor’, ‘Master’, ‘Doctor’) A big number of students study in universities in Europe and USA Source: National Statistics Institute

  12. 3 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 Number of universities in some of the biggest cities Blagoevgrad Veliko Tarnovo Burgas Varna 1 2 Plovdiv 1 2 Sofia 6 3 Business field Technical sciences Other Source: National Statistics Institute

  13. 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

  14. 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)

  15. 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

  16. Leading global investors have chosen Bulgaria

  17. Invest Bulgaria Agency InvestBulgaria Agency is a Government investment promotion arm, part of the Ministry of Economy and Energy 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

  18. InvestBulgaria Agency Sofia 1000, 31Aksakov 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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