investbulgaria agency

InvestBulgaria Agency (IBA), 31 Aksakov Str., Sofia 1000

tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320

e-mail: [email protected], http://www.investbg.government.bg

InvestBulgaria Agency

December 2013

issue 3 (3), year 1

Monthly Electronic Publication

InvestBulgaria Agency Economic News - Business, Investments,

Trade

Analysis of Sector

Investment Opportunities of Municipality

Interview

Chamber of Commerce in Bulgaria

Macroeconomic Indicators

Upcoming Events

MARRY CHRISTMAS AND A HAPPY NEW YEAR!

Dear colleagues, friends and partners,

We wish you a magical Christmas! Health and strength, warmth and kindness to you and your close ones! Let the new 2014 be gratifying, let it bring you a lot of success, optimism and faith! Thank you for being with us!

Sincerely,

InvestBulgaria Agency

INVESTBULGARIA AGENCY

Bulgarian tourism not only reveals the possibilities of Bulgaria as an attractive destination, but is increasingly becoming an investment field, which attracts new projects and investments

Branimir Botev

Deputy Minister of Economy and Energy

In the period 1998 - 2000 he was a senior adviser and secretary of the Council of Administration at the Council of Ministers.

Co-founder and Co-President of the Bulgarian- Belgian Association Best2Be between 2002 and 2004.

He was Chairman of the Association of manufacturers, importers and retailers of alcoholic beverages in Bulgaria and member of the Board of the Confederation of

European Spirits Producers (CEPS) - Brussels.

Since 2013 he is a member of the Advisory Business Research Board at the Ministry of Agriculture and Food. Appointed Deputy Minister of Economy and Energy on July

22, 2013.

Graduated French School "Alphonse de Lamartine" in Sofia and Master's degree in "Sociology", profile "Social Management" at Sofia University "St. Kliment Ohridski".

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320


Issue 3 (3)/ December 2013 InvestBulgaria Agency

Bulgarian tourism not only reveals the possibilities of Bulgaria as an attractive destination, but is increasingly becoming an investment field, which attracts new projects and investments. On a territory of only 111 thousand square kilometers, Bulgaria offers several internationally recognized tourist product: - Marine tourism - 378 km of Black Sea coast, of which 200 km coastline; - Mountain tourism - internationally recognized ski resorts with a total of more than 210 km of ski runs and five big mountains, 146 peaks higher than 2,000 m; - SPA and wellness tourism based on thermal mineral waters that pour 274 million liters a day - Cultural tourism - 43 thousand artifacts, in this indicator Bulgaria ranks third in Europe by artifacts from the Thracian civilization and Rome; - Eco tourism - preserved natural resources - 3 national and 11 natural parks, 89 reserves and 2234 natural attractions. In the second half of 2013 tourism emerged as a leading sector in the Bulgarian economy, during this period it increased from 12.5% to 13.6% of GDP, according to data from Eurostat and the World Tourism Organization (WTO). At the end of this year Bulgaria will achieve two absolute statistical records in the development of national tourism - 7 million foreign tourists will have visited the country and the revenues will exceed EUR 3 billion. The government clearly recognizes the role of tourism in the Bulgarian economy and aims to conduct a proactive policy, both on the target markets for Bulgarian tourism and to attract foreign investments to the Bulgarian tourism. Accordingly, a National Strategy for Sustainable Tourism Development to 2030 was prepared, which analyzes and indicate priorities in field, the trends of tourism products and services that Bulgaria offers, the necessary measures to optimize the investment process in tourism, etc. At the same time Council of Ministers took decisions № 705 on 11.14.2013 and № 668 on 04.11.2013 to establish working groups to conduct tourism policy and support the investment intentions, shown by leading investors towards Bulgaria, and especially mountain tourism. For the short period, in which the working groups have functioned, there are already announced investment plans for over EUR 1 billion, mostly in the mountain areas covering comprehensive services in this field - from whole-year, green tourism, through SPA tourism based on mineral springs, to ski areas in winter. A good example for an integrated approach is the construction of sport complex Kamchiya at the Black Sea, financed entirely by the Government of Moscow. In order to facilitate the investment process, the adoption of a special law for the development of mountainous and hilly areas by analogy with the French law "Loi Montagne" is envisaged. I believe that the joint efforts of government and business to achieve sustainable growth in tourism will lead to an efficient and responsible policy in the sector and will attract more international investments.

Annual Awards “Investor of the Year” 2013 InvestBulgaria Agency (IBA) organized for the eighth time the annual awards "Investor of the Year" 2013. The aim of the event is to honor the most significant investment projects carried out in Bulgaria in 2013.

Specially appointed committee will review all nominations and determine the companies that will be awarded at a ceremony in February 2014.

http://www.investbg.government.bg/bg/events/nominacii-za-investitor-na-godinata-2013-342.html


of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



EVENTS ORGANIZED BY IBA

InvestBulgaria Agency met the business in Vidin The potential for economic development of Vidin and the region were discussed at a roundtable organized by the InvestBulgaria Agency (IBA) on 5 December in the building of Regional Administration Vidin. The meeting was attended by regional representatives, private investors, trade organizations in the face of Vidin Chamber of Commerce and representatives of Free Zone Vidin. At the beginning of the meeting, the Executive Director of IBA Svetoslav Mladenov presented the activities of the

Agency, the large project "Promoting the advantages of investing in Bulgaria" and talked about the future plans of IBA in the regions. The discussion was very lively because of the desire and aspiration of the participants to affect key issues for increasing the potential of the region. Transport Corridors 4 and 7, the train connections, the favorable geographic location and good communications were derived as key advantages for investing in the region. It became clear that Free Zone Vidin now offers ready sites to accommodate local and foreign investors. The trend of rising unemployment and low-skilled workforce remains negative, which are one of the most important conditions that investors look for when initiating new projects. Solutions to these two key issues can be found again by investing in higher education and the establishment of specialized training centers in the region. During the discussion a project for making major infrastructure changes in the field of tourism was mentioned, which has the potential to find financing very quickly due to the increased interest in this sector at the moment. At the end of the year will be published an investment catalogue, aimed at informing potential investors of the business climate in different regions of Bulgaria, for which IBA urged attendees to assist with providing additional information to the completeness of the material. Svetoslav Mladenov announced that the Agency is ready to work actively with the Bulgarian municipalities for the conversion of Bulgaria as an attractive investment destination for foreign business.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



MEDIA FOR INVESTBULGARIA AGENCY

The business wants tourism in four seasons

Bulgarian Business Leaders Forum hosted a conference on "government and business in a conversation about tourism and investment", which was held in Burgas. Ambition of BBLF as an organizer was to provide a platform for constructive dialogue of all stakeholders - representatives of the tourism industry and related industries, local and central government that are relevant to the sector, know its problems and can offer suitable solutions.

Moderator was Maxim Behar, a member of the Board of BBLF who opened the ceremony in the presence of over 100 guests – government officials and regional municipal administrations, representatives of the private business from

Burgas, Varna, Sozopol and the region, and the media, with the words: "For its 15 years of existence the Bulgarian Business Leaders Forum organized many different initiatives that have contributed significantly to the development of the business. One of them was the signature of our Standard of business ethics. This leads us in Burgas today - ethics, transparency, the need to develop the business and the need for dialogue between government and business, because with no dialogue this important sector of the country could not develop."

The conference began with a speech by Dimitar Nikolov, Mayor of Burgas, who confirmed that tourism is a powerful stimulus for the development of the region and said that the local government is very active in improving the quality of service and open to suggestions, recommendations and opinions from business structures. "In recent years we develop new segments - ornithological, cultural, rural, festival, archaeological, pilgrimage tourism and even wedding tourism. We also strive to improve the infrastructure," he added.

IBA Executive Director Svetoslav Mladenov said that Burgas is among the cities that are good examples for both investment and infrastructure and tourism has enormous potential. According to him, the opportunities for tourism lie in the four seasons, attracting wealthy tourists and more work in the field of advertising, for which IBA is making significant efforts in recent months by issuing a monthly newsletter and an investment catalog. "I sincerely hope that a model of how investment can raise the living standard of the people can be made in Bulgaria in the next 10 years," he added.

burgasnews.com, 03.12.2013

InvestBulgaria Agency is ready to find a new investor for EnerSys JSC

EnerSys Jsc - Targovishte will continue to produce batteries for submarines, in which the company is a global leader. The rest of the operations are temporarily frozen and will be maintained in readiness for commissioning in case of positive development of the market conditions. This is the statement of the Executive Director of EnerSys Jsc - Eugen Peterhansel from a meeting between representatives of the InvestBulgaria Agency and the management of the company, IBA announced. Last week the company announced production and staff cuts at the plant by 80%. During the meeting with representatives of the IBA, as main reason for the decision by the company's headquarters was underlined the deteriorating conditions in the European market and the excess of production capacity. Representatives of the IBA expressed readiness to look for potential investor, who could acquire the company and to continue the operations planned for closing. Last week, CITUB alarmed that the American owner of EnerSys Jsc suspends the company's core business - the production of batteries. 420 people are in the process of being laid-off.

investor.bg, 17.12.2013

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



GE Interested in construction of Bulgarian TPP, South Stream US energy giant General Electric has expressed interest in building new powers at Bulgaria's Maritsa Iztok TPS, and in contributing to the construction of the South Stream natural gas pipeline, revealed Bulgarian Economy and Energy Minister Dragomir Stoynev in an interview for the Bulgarian National Radio Sunday. "General Electric offered to build units 9 and 10 of Maritsa Iztok 2, which will be an important development in the-consuming part of Bulgaria's energy sector," said minister. Located near the city of Stara Zagora in southern Bulgaria, the state-owned Maritsa Iztok 2 TPP is the largest on the Balkans.

novinite.com, 25.11.2013

ALC Bulgaria will open new plant in Bulgaria till the end of the year ALC Bulgaria will open new plant by the end of 2013, said Shaun Bosch, General Manager, when he was awarded with the representation of Bavaria in Bulgaria’s prize for a Bulgarian enterprise with contacts in Bavaria. The second plant for production of upholstery for car seats will create 200 – 300 work places in Ihtiman. Production is destined for Mini Cooper. Investment in Bulgaria is to the amount of EUR 10 million by now and will be increased with the new projects. At present more than 800 people work in ALC Bulgaria, as compared to 500 at the end of last year. Main company’s customer is the German automaker BMW. “Except for the plant in Ihtiman we plan expanding production in Musachevo in 2014”, said Bosch.

capital.bg, 27.11.2013

Bulgaria ranks 43rd on the world’s most talent competitive countries Bulgaria has been ranked 43rd on INSEAD's Global Talent Competitiveness Index. The index is compiled by Human Capital Leadership Institute, INSEAD and Adecco consulting company. Behind Bulgaria are Macedonia (52), Greece (56), Romania (63), Turkey (67) and Serbia (79), which makes the Bulgarian economy the most competitive in the Balkans. The good assessment is due to the ability to retain talents – 33rd place. The index covers 103 countries, representing 86.3 per cent of the world's population and 96.7 per cent of global GDP. Switzerland is placed at the top, followed by Singapore and Denmark.

darikfinance.bg, 27.11.2013

ECONOMIC NEWS - BUSINESS, INVESTMENTS, TRADE

ECONOMIC INDICATORS

Foreign Direct Investments

Source: BNB

BNB exchange rates

Source: BNB

Main Interest Rate 0.02% - 01.12.2013

0.02%

0.00%

0.01%

0.01%

0.02%

0.02%

0.03%

0.03%

0.04%

Source: BNB

Unemployment Rate 11.5% - November 2013

11.5%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

Source: NSI

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Bulgarian state to encourage Qatari investments in Bulgaria “The Bulgarian state will encourage realization of Qatari investments in Bulgaria,” Bulgarian Deputy Minister of Economy and Energy, Krasin Dimitrov, said at a meeting with the management’s representatives of leading Qatari investment corporations and institutions in the frames of a working visit to Qatar, Saudi Arabia and the United Arab Emirates. During the visit Qatar expressed interest in investment projects in Bulgaria mostly in the field of infrastructure, real estate, agriculture, food-processing industry and tourism. During the meeting it was agreed upon start of negotiations between Bulgaria and Qatar for founding of a joint investment fund for small and medium-sized enterprises in Bulgaria in participation with the Qatari side. Attractive and strategic investment projects in Bulgaria were also discussed. Sheikh Ahmed Al-Thani confirmed political will of Qatari government to promote Qatari corporations for their implementation in Bulgaria.

mi.government.bg, 03.12.2013

Oliva has invested EUR 25 mln. in a new factory in Polski Trambesh Oliva JSC has invested EUR 25 million in a factory in Polski Trambesh, announced Ivo Ivanov, Director of manufacturing department. The project is financed by EBDR and will create new 120 jobs. At the moment the factory is under huge repair and the equipment is being tested. The official opening is due for the summer of 2014. During the last 10 years the plant Prima-M has changed several owners. Oliva JSC bought the factory in 2011 for BGN 4 121 819. Over BGN 3 million was paid for 68 buildings of the company as well as BGN 1 million for 92 acres of land. Back in time the oil-factory was named Marek and was one of the biggest oil-producers in Bulgaria.

borbabg.com, 03.12.2013

BSE-Sofia 11.2012-11.2013

Source: BSE-Sofia

BGREIT: 19.11.2013 – 19.12.2013

84

85

85

86

86

87

87

88

88

89

89

19.1

1

23.1

1

27.1

1

01.1

2

05.1

2

09.1

2

13.1

2

17.1

2

Source: Investor.bg

BG40: 19.11.2013 – 19.12.2013

154154155155156156157157158158

19.1

1

23.1

1

27.1

1

01.1

2

05.1

2

09.1

2

13.1

2

17.1

2

Source Investor.bg

SOFIX: 19.11.2013 – 19.12.2013

450

455

460

465

470

475

480

485

19.1

1

23.1

1

27.1

1

01.1

2

05.1

2

09.1

2

13.1

2

17.1

2

Source Investor.bg

Swiss experience will be applied in Bulgarian Technopark Bulgaria will use experience of the oldest technopark in Switzerland, as it examines its background in assigning criteria for selection of companies and training of entrepreneurs. Cooperation will be discussed during economic minister Dragomir Stoynev’s visit in Zürich within the forum "Bulgaria as an industrial partner”. It is the first techno-park in Switzerland and has a 20-year history. Basic emphasis in its activity is attraction of young and innovative start-ups. Swiss technopark offers wide range of services: lower rents of offices, training, setting up contacts and networks among companies, as well as with potential customers and investors. Significant importance is given to creation and maintenance of close partnerships with institutes, universities and research and development (R&D) units.

economy.bg, 03.12.2013

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Bulgaria's Business Climate up Nov 2013 M/M In November 2013, the total business climate indicator in Bulgaria increased by 1.7 percentage points compared to its October level. This is attributed to the more favorable business climate in industry and service sector. The data was released Monday by the country's National Statistical Institute, NSI. The composite indicator "business climate in industry" increased by 4.3 percentage points in comparison with the previous month due to the improved managers' assessments and expectations about the business situation of the enterprises. Uncertain economic environment and insufficient domestic demand remain the main obstacles for the business development in the branch, 55.4% and 43.3% of the industrial entrepreneurs respectively pointed out.

novinite.com, 04.12.2013

BHTC: We plan to create up to 800 jobs in the next five years German company’s plans to construct a factory in Bulgaria became clear a year ago. It will be the first company in the state economic zone in Bouzhurishte. The company is among key producers of equipment and control systems for air-conditioners for cars. Among BHTC’s customers are big car producers, such as Lamborghini, Рorsche, Bugatti, Volkswagen, Ford and Renault. Except for Germany, the company has subsidiaries in the US, China and India. They employ more than 1000 people. Good economic development in recent years, good infrastructure, beneficial business environment in terms of corporate tax, presence of well-prepared engineers are among reasons the company to choose investing in Bulgaria. The first stage of the investment will be to the amount of about BGN 43.5 million. After that within three to five years expansion of the factory is planned. At the beginning BHTC will start with 7500 square meters. After that expansion at two stages will take place-each assessed to 5000 square meters more production premises. Investment may reach BGN 100 million in a five years’ time. Initially the factory will start operation with 100 employees. Afterwards expansion plans provide for increasing number of employees to 800 people for five years.

economy.bg, 06.12.2013

Parliament adopted Bulgaria’s state budget for 2014 Parliament adopted state budget of Bulgaria for 2014. The budget can be defined as a social one– a budget that restarts economy and is focused on speeding up of economic growth, finance minister Petar Chobanov pointed out. In Chobanov’s opinion it is a budget that is in conformity with economy’s development and one that doesn’t ignore fiscal stability. Revenues are ambitious and tense but that doesn’t make the budget overestimated, the minister said. According to him numerous changes, including structural and legal ones are considered. They confirm that higher

Selected Decisions of the Government

of the Republic of Bulgaria for the period 27.11-18.12.2013

18.12.2013

Promotion of economic activity and career development of young people is one of the goals of the updated national youth strategy

Approved standard contract of mutual investment promotion between Bulgaria and third countries

Updated annual estimates of extra-budgetary account of the National Fund to the Minister of Finance

The European Council will review the Common Security and Defence Policy

Adopted a national plan for implementation of the European Youth Guarantee

Government offers synchronization of the Penal Code with Community law

Improvement of the legislation on labor migration of third-country nationals on the territory of Bulgaria

The budget of MIE gets BGN 14.7 million from the sale of greenhouse gas emissions

11.12.2013

Defined managing, certifying and audit authorities of the operational programs for 2014-2020

The Government will support the implementation of large investment project in Ruse

Provided land for the construction of the access road of Vratsa and section of highway Struma

The deadline for completion of work under the loan agreement with the World Bank extended until mid-2014

Expanded workers' rights with regard to control over working conditions

Reconstruction of the administration of the Ministry of Economy and Energy, the states in the system of the institution shall be reduced by 159

BEH will negotiate with Toshiba Corporation to build a new nuclear power plant in Kozloduy NPP

04.12.2013

Radomir municipality will build intermodal terminal on property provided by the State

Approved Bulgarian-Chinese Memorandum of cooperation in railway transport

Prolonged period for granting interest-free loans to municipalities under the Programme for Rural Development

Approved agreements between Bulgaria and the Deutsche Bank to create collateral contracts for transferable loans

http://www.government.bg/cgi-bin/e-cms/vis/vis.pl?s=001&p=0228&n=5469&g=





















































of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



revenues can be expected next year. The strongest is of course fiscal control that is to begin from the start of next year. Still another factor is reverse charging of VAT. Improvement of some procedures, alleviation of administrative budget and better communication that exist between representative of revenue administration and business should not be underestimated, too. Some buffers have also been planned.

parliament.bg, 09.12.2013

Bulgarian PM: 2014 to be first year of economic recovery For five years now, we have expected 2014 to be the first year with growth of economic development. This was announced by PM Plamen Oresharski who attended Bulgarian Business leaders’ forum on Monday. “We are to make some small corrections, recommended by the European Commission. As far as stability of fiscal position is concerned, Bulgarian goes on being among the top countries in terms of deficit, the PM pointed out. The best policy that guarantees fiscal stability is the one that provides for growth, he underlined. “Still other initiative is encouragement of investment activity. We have several key projects we are working on with investors”, Oresharski concluded.

novinar.bg, 10.12.2013

Sofia with direct air route to Belgrade from April Direct air route Sofia - Belgrade will be released in April next year. This was announced by Serbian Prime Minister Ivica Dacic after his meeting with Bulgarian Prime Minister Oresharski in Sofia. The South Stream project will be profitable for both Serbia and Bulgaria, Oresharski said in turn. He also stressed that Bulgaria will comply with all requirements of the EU. The Serbian Prime Minister and some of his ministers are in Sofia at an official visit. Serbia's prospects for EU membership will be a topic that will be discussed in the meetings of the Serbian Prime Minister with Bulgarian National Assembly Chair Mihail Mikov and President Rosen Plevneliev.

bnr.bg, 11.12.2013

Breweries provide for EUR 163 million of budget revenues Brewery sector in Bulgaria has generated EUR 163 million revenues in the state budget and provided for maintenance of 28 900 jobs in 2012. This is what data of Ernst & Young’s latest research on contribution of brewery industry to European economy for 2012 shows. Results of the study were presented in Brussels on the annual gala evening of Brewers of Europe. Data shows that the sector is adapting well to present economic difficulties and has a potential for growth and creation of jobs, Union of brewers in Bulgaria says. Ernst & Young’s report points out that in 2012 production and sales of beer have generated EUR 53 billion tax revenues for governments in

EU

27.11.2013

Adopted a National Strategy for the development of the forestry sector in Bulgaria for the period 2013 - 2020

Bulgaria and Poland will cooperate in the field of labor, employment and social policy

Bulgaria and India strengthen cooperation in science and technology

Approved Bulgarian position about the changes in the constituent documents of the International Investment Bank

Bulgaria takes over the presidency of the Black Sea Economic Cooperation (BSEC)

Adopted Draft Law on Industrial Property Representatives

Mineral Resources Act reflected the provisions of the European directive

Bulgaria is ready to sign the association agreement of Ukraine to the European Union



















of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



EU countries and provided more than 2 million jobs. The sector reported a 4% growth in exports that forms revenues to the amount of EUR 3 billion in the EU’s balance of trade.

novinar.bg, 11.12.2013

Economy restarted with BGN 800 million in the budget for spending Economy’s restart planned in Budget 2014 will come from BGN 800 million, set for budget expenditures, directed to investment projects. This is what MP Rumen Gechev pointed out before BTV. He stressed on the need Bulgaria to support public spending in order to step out of the crisis. In his words Bulgaria should act as lots of other countries. It has to pay up to stimulate the economy.

trud.bg, 11.12.2013

BEH to negotiate with Toshiba Corporation Bulgaria's Cabinet has approved the report of the Minister of Economy and Energy, Dragomir Stoynev, on the need to build a new unit at the country's only nuclear power plant. This is to say that the Minister gives his permission to the Bulgarian Energy Holding (BEH) to negotiate with Toshiba Corporation for conclusion of an agreement for a strategic investor. Thus project for construction of a new unit at the nuclear power plant NPP Kozloduy with Westinghouse Electric Company’s technology reactor with water pressure AP 1000-3 + is to be completed. The minister was authorized to organize, coordinate and control negotiations for structuring and funding of the project.

government.bg, 11.12.2013

50 000 cars a year will be produced in the factory near Lovech "Full production capacity of Litex motors’ factory is 50 000 cars per year. We are optimistic that if we develop successfully as until now, we are soon to reach the goal. The capacity might be increased to 70 000 cars in three work shifts. For the purpose, though we have to have corresponding volume of orders, Litex motors’ CEO Iliya Terziev said. He is the winner of title Mr. Economics for 2013. Terziev explained that from the opening of the factory until now, production has been constantly expanding.

trud.bg, 12.12.2013

Bulgaria successfully meets crisis challenges Bulgaria is one of the countries in Europe that successfully meet challenges of the crisis and maintains positive rates of growth in the current difficult economic situation. This is what the President of the National Assembly Mihail Mikov told participants in the Bulgarian-Chinese Economic Forum in Chongqing. As an example of successful Chinese investments in Bulgaria Mihail Mikov pointed out the Great Wall car factory in Lovech, which is the first European factory for production of Chinese cars. In Bulgaria Chinese telecommunication companies "Huawei" and "ZTE" also do successful business, Mikov added. He used the forum in Chongqing to invite Chinese citizens to take advantage of the excellent conditions for tourism that Bulgaria provides.

bnr.bg, 14.12.2013

Minister Stoynev: Relations between Bulgaria and the USA are going in a positive direction "In recent weeks, the relations between Bulgaria and the United States have developed very positively in the Economy." This said Minister of Economy and Energy Dragomir Stoynev meeting with AmCham Bulgaria. He recalled that during his working visit to the U.S. American business supported the assumption that the economy must be at the forefront of relations between the two countries. Above representatives of American business Minister Dragomir Stoynev stressed out that foreign investors’ trust might be gained only if stable and predictable business environment is ensured in Bulgaria. One of the first tasks facing the Government was removal of the pressure on the economy and restoration of dialogue with business, he reminded. "We have already taken steps in this direction –84 licensing and registration regimes were removed. Amendments to the Law on Public Procurement are to be adopted, as well. They are aimed at facilitating access of SMEs to them", added Stoynev.

mi.government.bg, 14.12.2013

Bulgarian Industrial Association: Economy Bottoms Out Bulgarian economy emerges from recession after a turbulent 2013; the results of the traditional annual

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



poll of the Bulgarian Industrial Association (BIA) have shown. The results of the survey conducted among the BIA members were announced in a press conference Monday. More than 22% of the polled said that the business climate in 2013 had improved compared to the previous year. Some 53% of the respondents claimed that the economic conditions in the country were deteriorating, while 23% of people thought they remained the same. Despite the fact that 39% of BIA members anticipated economic stagnation in 2014, the poll showed certain optimism – 33% foresaw over 1.5% growth.

Only 25% of the polled this year said they ‘expected crisis aggravation’, compared to 51% of pessimists in 2012. Every third businessman (29%) declared recovery of the economic conditions, 36% were able to maintain the same indicators, and 32% reported a decline of business performance. The crisis has affected mostly the sales/turnover (50% of the polled companies reported a decline), followed by production volumes (41%), employment (36%), investments (33%) and market presence (31%).

bia-bg.com, 16.12.2013

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



INVESTMENT PROJECTS IN A PROCESS OF REALIZATION Maritsa olio JSC The enterprise is located in the village of Yasen, Pleven municipality. It will produce vegetable oils mainly from rapeseed, sunflower and soya. On the first stage of construction the company will produce raw oils. On the second stage - refined bottled oil. The investment is to the amount of BGN 50 million and is to create 150 jobs. Production capacity of the enterprise is assessed to 1000 tons of processed raw materials within 24 hours in three-shift work. The official opening is planned for 2014.

Oliva JSC Oliva JSC has invested over EUR 50 mln in the company’s factory in Polski Trambesh. Funding is ensured by European Development Bank. 120 new jobs will be creates. Currently the company is under vast repair works, machinery and facilities are being tested. Official opening is due for the summer of 2014. Boni Holding JSC Boni Holding, will modernize and expand its business with a loan from the European Bank for Reconstruction and Development (EBRD) to the amount of EUR 10.5 million. Funds are envisaged for financing the company’s investment program for modernization of pig farms and meat processing capacity. The program provides for the purchase of new equipment, modernization of the existing ones and purchase of new farms, improving microclimate and food systems, and general overall reduction of direct operating costs. Boni Holding is one of the biggest companies in food-processing industry. It is a leader in the processing of pork meat and is among the most renowned producers of meat products and sausages. Pohl Agrar Company JSC Pohl Agrar Company JSC will construct a dairy farm near the village of Krasen. The investment is to the amount of over BGN 15 million. The planned farm of the German company will be situated at an area of 170 decares. Its capacity will be for 2000 cows of Bulgarian black colored cattle breed. The dairy farm is planned to start operations in January 2014, when the first out of five stables will be ready. The company will initially employ 30 people from the area. Until the end of 2015 the whole project is to be completed. Zagorka JSC In 2014 the company will invest over BGN 8 million in its brewery in Stara Zagora. In 2013 Zagorka invested BGN 2 million in a ‘green warehouse’ and plans to turn into the greenest brewery company in Bulgaria. Monrol Bulgaria SPLTD The investment project includes construction of a cyclotron center and laboratory for production of radiopharmaceuticals in Sofia. The investment in high-tech activity is assessed to over BGN 8 million. The company’s investment project will be completed within three years. It is expected that production of radiopharmaceuticals will be launched by June 2015. Once the center has been finished, the number of employees in total will be 10. These are to be highly qualified experts in the sphere of nuclear medicine.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Trakia Economic Zone unites 6 industrial zones with 1 billion Euro investment made so far

Trakia Economic Zone (TEZ) unites the 6 industrial zones in the region of Plovdiv – Industrial&Commercial Zone Maritza, Rakovski Industrial Zone, Industrial&Commercial Zone Kuklen and the early stage of development of - Education and hi-tech Park in Plovdiv, Industrial Zone and Hi-Tech Center Trakia and Agrocenter Kaloyanovo.

Trakia Economic Zone is implemented on 10 700 000 m², 3 250 000 m² of which has been already occupied.

Over EUR 1 billion have been invested in all the zones ever since the start of the first industrial zone - Maritza in 1995. Over 100 investors have been attracted, more than 80 of them foreign, more than 12 000 jobs created.

World leaders like ABB, Liebherr, Socotab, Schneider Electric, Ferrero, Shell Gas, Linde, William Hughes, Kaufland, Zobele, Ixetic, Mecalit, and Techno Aktas built and opened enterprises, trade and logistic facilities. One of the most important companies in Bulgaria – KCM JSC operates in TEZ. Emblematic Bulgarian brands - Bella Bulgaria, MAXCOM, Dimitar Madjarov, Refan, Ataro Clima, Andy, Agria-Bulgaria, also have facilities within the zone.

Trakia Economic Zone provides 7 450 000 m² free space for new investment. Over EUR 750 mln, which will open 30 000 new jobs, are expected to be made within 10 years, according to preliminary estimates. 11 new projects are currently being developed in Trakia Economic Zone - some of them are at a design stage, others are near completion.

Trakia Economic Zone is located on lands of KCM 2000, Sienit Holding, as well as municipal lands. Israeli and Italian companies also contribute to its development.

TEZ is a public private initiative. Under the idea of “Investment Initiative” association in May 2013 the mayors of 8 municipalities (Plovdiv, Rakovski, Maritza, Rodophi, Kuklen, Asenovgrad, Parvomay, Stamboliyski) signed an agreement for cooperation aiming at the development of the Plovdiv Region through creating a better business environment.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



In this sense the objectives of TEZ are:

• creating a good business climate for the attraction of foreign and domestic investors • expanding the production of goods for export • industrialization led by innovation • processing of local agricultural production • development of agro sector • development of knowledge-based economy • realization of the regional stuff • creating a general system for coordination and management • improvement of the infrastructure connectivity • ensuring of qualified work force

The advantages of TEZ are: • Convenient geographical location – on important railway routes and European transport

corridors, connecting Europe, Asia and Africa • Secured infrastructure– transport, electricity, gas, water, sewerage, telecommunications • A specialized administrative unit provides additional services, accelerated procedures • Qualified multilingual work force • 9 major universities with technical and economics disciplines • More than 80 schools, language and specialized high schools • Special training center for education of the personnel

The investors in TEZ gains easy access to funds of EU operational programs under the new programming period 2014-2020, possibility for direct funding from Brussels. TEZ has professional consultants who assist the investors in applying for European programs: „Good Management“, „Science and Education for Smart Growth“, „Environment“, „Program for rural development of the Republic of Bulgaria“, „Human Resources Development“, „Regions in Growth“, „Transport and Transport infrastructure“ The projects of Trakia Economic Zone are implemented within SHORT TERMS, thanks to the finished spatial planning of the territory, the assistance of the local authorities, the InvestBulgaria Agency and the work team of the zone – specialists with over 15-years of experience in the construction of industrial, logistic, infrastructural, energy and commercial sites, lawyers, brokers. Construction of sites upon the requirements of the investor, for example – an enterprise of 10 000m² production area, with 300 work places is completed within 6 months The Zone has ready production, logistic, commercial facilities. Within TEZ are zones with different economic specifics, which make the project unique – there are areas in the agro sector, in the high-tech sector, with focus on the heavy industry. The investor has real options to choose from.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



THE SUCCESS OF THE COMPANIES THAT HAVE ALREADY INVESTED

• Ben Cox, commercial director of William Hughes: „We had to choose between Bulgaria and Romania for our investment, and we decided that Bulgaria is better.“ • Peter Simon, ABB Group manager for Bulgaria and Romania: „Zone Rakovski is really an industrial zone and we realized the project in very short terms. Here we found educated, motivated people, the base for the success of this plant. We built a second plant in 2013.“ • Hristo Georgiev, manager of „Liebherr-Hausgerete Maritza“: “We were attracted by Zone Maritza with its provision of highly qualified personnel with technical education, suppliers for the production, competitive labor cost and opportunity to conquer East European markets from here.“ • Radoslav Koshkov, vice-president of LifeSpace in Schneider Electric: „We chose Zone Maritza for its highly skilled work stuff and its location – from here we make deliveries worldwide. Recently we expanded the factory and it became one of the biggest production factories of such products in Europe“. • Sinan Emin, Turkish concern „Techno Aktas“: „Since the establishment of the pant in 2008 till now we increases the production and sales 5 times. The location of Zone Kuklen itself ensures the fast service to our customers from East, West and North Europe. Our Bulgarian experts train workers of the holding throughout the world.“ • Ludwig Kohl, former CFO of „Ferrero Bulgaria“: „Only 12 months passed from our decision to invest in Bulgaria to the opening of the factory and during that time we received full assistance from the Bulgarian authorities”.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



ANALYSIS OF SECTORS „ELECTRICAL ENGINEERING“ AND „ELECTRONICS“

Sectors Electrical Engineering and Electronics

Number of companies, number of employees in the sector „Manufacture of computers and communication equipment,

electronic and optical products (NACE26)“

Top companies in the sector by number of employees

Company Number of employees

2010 2011 2012

Manufacture of computers and communication equipment, electronic and optical products (NACE26)

Festo Production SPLTD - Sofia 395 468 574

Optics JSC - Sofia 330 411 493

ITW Ispra Controls Bulgaria SPLTD - Plovdiv 336 306 358

Sisko Set LTD - Sofia 207 316 353

Factory for Optics JSC - Sofia 270 278 333

Manufacture of electrical equipment (NACE27)

Yazaki Bulgaria SPLTD - Yambol 2 634 2 263 2 156

Liebherr Hausgeraete Marica SPLTD - Radinovo 1 474 1 468 1 490

DZU (Disk Storage Devices) JSC - Stara Zagora 1 197 881 883

Schneider Electric Bulgaria SPLTD - Sofia 730 768 832

Hyundai Heavy Industries Co. Bulgaria JSC - Sofia 649 662 635

Top companies in the sector by sales income

Company Sales (BGN mln)

2010 2011 2012

Manufacture of computers and communication equipment, electronic and optical products (NACE26)

BTL Industries JSC - Sofia 40.1 62.7 66.1

Melexis Bulgaria SPLTD - Sofia 115.9 109.3 64.4

Festo Production SPLTD - Sofia 39.4 51.4 58.2

Daisy Technology SPLTD - Sofia 12.7 51.8 33.7

Centillion LTD - Sofia 4.2 7.1 12.9

Manufacture of electrical equipment (NACE27)

Liebherr Hausgeraete Marica SPLTD - Radinovo 293.8 286.6 321.7

Schneider Electric Bulgaria SPLTD - Sofia 109.3 154.9 186.7

Monbat JSC - Sofia 203.4 196.2 183.8

EnerSys JSC - Targovishte 79.3 131.7 131.5

Hyundai Heavy Industries Co. Bulgaria JSC - Sofia 96.7 102.9 73.0

Data is for companies reporting balance sheets from the sectors Manufacture of computer, electronic and optical products (NACE 26) and Manufacture of electrical equipment (NACE 27).

Number of companies, number of employees in the sector „Manufacture of electrical equipment (NACE27)“

Assets of the companies 2008-2011, BGN mln

Net sales 2008-2011, BGN mln

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Kaloyan Kaloyanov Hristo Stankov

Investments in sectors Electrical Engineering and Electronics

Bulgaria has a good tradition in this sector. Electrical industry in Bulgaria has over 100 years of history, which roots from the early years of the creation of the modern Bulgarian state. Since then it is constantly in the forefront of the development of Bulgaria’s economy.

Currently sector "Electrical Engineering and Electronics" is also successful in Bulgaria and manages to attract many reputable foreign companies that already have their business here. Successful examples worth mentioning: ABB (Swedish-Swiss conglomerate), Schneider Electric (France), Liebherr (Germany), Festo (Germany), Melexis (Belgium),

Wuerth Elektronik (Germany), Siemens (Germany), Hyunday Heavy Industries (Republic of Korea), Yazaki (Japan), etc. The majority of them have been in the country for more than 10 years. Some of these companies continue to implement new projects and expand production capacity. As confirmation of the above can be mentioned the new plants under construction of ABB and Festo, respectively in Plovdiv and Sofia, which will be officially opened next year. Thus they will double their production facilities and staff. Also, recently the world leader in the manufacture of electrical wiring for automobiles, the Japanese company Yazaki, opened a second factory in Bulgaria in Sliven, so the total number of employees in the company grew to over 3000 people. These examples are good evidence that companies assess the conditions and opportunities provided by Bulgaria as attractive for investment.

In addition, Bulgaria has managed to attract new players, which make investments in production capacity. Such companies are the Swiss Reichle & De-Massari and LEM, which over the last two years have invested and continue to invest in factories in Sofia. Indicative is the example with LEM, which just seven months after the decision was able to put into operation its production hall with an area of 4500 m2, in which BGN 3 million have been invested so far.

Besides the large international companies, Bulgarian companies also emerge as regional and global leaders in the manufacture of electronics and electrical equipment. Such success stories are Incotex, Datex, Acom MonBat, Electrostart etc. that produce products such as LED lamps, cash registers, antennas, amplifiers, batteries, etc. at global level and with global competitiveness.

An interesting fact in attracting investments in this particular sector is that initially large companies indulge licenses to Bulgarian enterprises for activities under their technology, and at a later stage these Bulgarian enterprises have been acquired. Examples are Festo, ABB, etc.

A factor behind attracting investments in electrical engineering and electronics in Bulgaria is the presence of regional centers with a long tradition shaped over the years as Sofia, Plovdiv and Botevgrad. Mainly in these regions are concentrated the majority of businesses, as well as centers for training of highly qualified personnel for the needs of the industry.

Availability of qualified personnel is among the leading factors in making investment decisions by companies investing in Bulgaria. Students in subjects related to the industry "Electrical Engineering and Electronics" in Bulgaria are nearly 30,000 as about 9,000 of them study directly Electrical Engineering and Electronics, and the rest study related disciplines. Furthermore, the country has over 20 professional schools focused on Electrical Engineering and Electronics, which also train qualified staff. Vocational schools and technical universities cooperate actively with the business in the preparation of

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



future skilled workforce. It is interesting to note that each year Bulgaria participates with its teams in international competitions in the field of automation and robotics.

Bulgaria produces a wide range of products: from small electronic components for building in to industrial batteries and transformers as big as a room. Recent years show a trend of change towards products with higher added value, requiring more engineering expertise. The majority of this production - over 75%, is exported to developed markets in Western Europe, America and Russia. The average growth rate of exports of electronics for the past five years is about 12%. A significant number of the customers are companies in the automotive industry, for which in Bulgaria work reputable companies such as Yazaki, SE Bordnetze, Wuerth Elektronik, IMI, Festo, Johnson Controls, etc.

Electrical and electronic industries are among the sectors of manufacturing, which are most closely associated with the development of high technology. Therefore, attracted investments in these activities are essential for the sustainable development of the Bulgarian economy because they make products with higher added value.

Kaloyan Kaloyanov, Hristo Stankov Sector Investment Services Department

Successful investments in the sector

ABB has been presented on the Bulgarian market via companies ASEA and respectively BROWN BOVERI for more than 80 years now. From 1993 it has been presented officially by its own local subsidiary. ABB plays significant role on the Bulgarian market of power and automation equipment.

ABB has been investing in Bulgaria for many years now, as it has always demonstrated its reliability as a business partner on the domestic market. Thus the company was nominated for Investor of the year in 2009 by InvestBulgaria Agency for its green investment to the amount of USD 20 mln in production unit for components of low and medium voltage in Rakovski, Plovdiv region. At present the company employs more than 700 people from the region. A year later for the same investment the company was awarded with the Prize of German economy in Bulgaria by the German-Bulgarian Chamber of Industry and Commerce.

In December 2012 the company officially started the construction of its fourth production unit, assessed to USD 23 million. It is the second green investment of ABB, which is to be constructed in Plovdiv region. The new production unit will operate as ABB’s domestic supplier of products of low and medium voltage. When the production base starts operation in its full capacity, it will employ 600 people.

ABB functions in Bulgaria via a single company with a head office in Sofia. The company has offices and branches in five more locations. ABB’s production units in the country are located in Petrich - for products of low voltage, Sevlievo - for high voltage products and transformers and in Rakovski - for products of low and medium voltage. The company has a service station for turbochargers in Varna, as well as a joint center for accounting and HR in Rakovski. ABB has more than 1300 employees in Bulgaria.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



INVESTMENT OPPORTUNITIES OF MUNICIPALITY

Veliko Tarnovo Municipality

Area: 885.345 sq. km Mayor: Daniel Panov

Tel: +359 62 619304 e-mail: [email protected]

Web site: http://www.veliko-tarnovo.bg/

Veliko Tarnovo Municipality Population Total for Varna Municipality 2010 2011 2012

Population (number) 88 442 88 417 88 286

Birth rate, (number) -381 -364 -342

Mechanical growth - total (number) 99 48 211

Working-age population, number 58 724 58 187 58 081

Leading companies by sales income (BGN thousand)

Company 2010 2011 2012

Prestige 96 JSC - V. Tarnovo 59 328 64 546 77 697

CBA Targovia SPLTD - Debeletz 112 625 98 991 75 458

Agrocom SPLTD - V. Tarnovo 64 720 111 843 57 130

Lights Tabac LTD - V. Tarnovo n.d. 12 510 48 040

Extrapack LTD - V. Tarnovo 34 435 39 518 45 309

Leading companies by profit (BGN thousand)

Company 2010 2011 2012

Prestige 96 JSC - V. Tarnovo 11 191 8 409 10 460

Krasi SPLTD - V. Tarnovo 2 328 2 028 4 922

Resen SPLTD - Resen 2 061 9 003 3 753

Agrocom SPLTD - V. Tarnovo 4 636 8 840 2 967

Extrapack LTD - V. Tarnovo 975 2 647 2 517

Projects carried out in the Veliko Tarnovo Municipality

International project "Culttour - cultural/garden/heritage as focal points for sustainable tourism"

International project "Joint strategy for sustainable territorial development of the zone for CBC Romania Bulgaria"

Project "Development of investment projects in Veliko Tarnovo for the next programming period"

Project "City of Veliko Tarnovo - green and affordable Balkan capital of cultural tourism"

Veliko Tarnovo prepares investment projects for the next program period

Veliko Tarnovo is preparing investment projects for the next program period aimed at strengthening the municipality’s capacity to successfully take part in execution of Operational programme for regional development 2014-2020. Specific purposes are:

Provision of technical support for generation and preparation of investment projects under the Operational Programme for Regional Development for the period 2014-2020.

Support of local authorities in compiling of a list with ready for funding projects that are to be included in Veliko Tarnovo’s Integrated plan for urban regeneration and development.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Two fields for preparation of 13 investment projects have been chosen. Five investment projects are envisaged within the field with predominant social features. Two of them are for urban environment; two are focused on educational infrastructure and one on cultural infrastructure. Eight investment projects are planned within the field of public functions of high public importance. Five of them are related to urban environment, two are focused on educational infrastructure and one is again for cultural infrastructure. Application of integrated territorial approach will contribute to development of a clear system of mutually related activities among subjects of future intervention-elements from urban environment, cultural and educational infrastructure. Sites are included within the span of approved zones of interaction, approved of by project Preparation of Integrated plan for urban development in the span of three zones in Veliko Tarnovo (grant contract № BG161РО001/1.4-07/2010/008).

Veliko Tarnovo Province Area 4 661.572 sq. km

Population Total for Veliko Tarnovo Province 2009 2010 2011

Population (number) 275 395 271 400 256 279

Natural increase - from 1000, ‰ -6.4 -7.8 -7.9

Economic indicators and labor market

Total for Veliko Tarnovo Province 2009 2010 2011

Employees under labor contracts (number) 74 746 70 493 69 215

Average annual salary of employees under labor contracts (BGN) 5 765 6 119 6 488

Economic activity rate - 15-64 years (%) 61.2 59.3 61.9

Employment rate - 15-64 years (%) 55.6 51.4 54.6

Unemployment rate (%) 9 13.1 11.7

Registered unemployed as to 31.12. (number) 12 873 11 817 11 834

GDP (BGN mln) 1 580.253 1 677.363 1 684.164

GDP per capita (BGN) 5 716 6 135 6 539

Foreign direct investment in non-financial enterprises, as at 31.12. (EUR mln)

68.836 67.212 73.034

Cost of acquisition of long-term tangible assets (BGN million)1)

283.9 267.9 390.4

Turnover (BGN mln) * 3 312.0 3 652.1 3 973.9

Produced output (BGN mln) * 2 147.0 2 351.3 2 520.5

Value added at factor cost (BGN mln) * 659.4 744.2 794.3

1) Incl. purchase of land * Data are calculated by the methodology of Structural Business Statistics Source: NSI

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



The St. Cyril and St. Methodius University of Veliko Tarnovo

The first university outside Sofia was opened in the autumn of 1963 on the historic and vivid hill Sveta Gora in Veliko Tarnovo. Cyril and Methodius were chosen as patrons of the University of Veliko Tarnovo. It is the second largest university in Bulgaria. The university is an heir of educational and cultural traditions of the once famous Tarnovo Literary School from ХІV century. University of Veliko Tarnovo offers training in humanitarian and economic profiles in seven departments: philological, historical and legal, art, teaching, Orthodox theological, economic and philosophical. More than 10 000 students in more than 60 disciplines are studying in the university.

Faculty of modern languages maintains active bilateral relations with universities from Belarus, Belgium, Great Britain, Germany, Egypt, Spain, China, Moldova, Poland, Russia, France, the Netherlands, Japan, etc. It participates in more than 40 international projects under programs Socrates-Erasmus, Comenius, Lingua, Tempus, Ceepus, Leonardo da Vinci, and Interreg II.

Prominent foreign scientists have frequently visited the faculty and have read lectures there. Some of them are awarded with honorary titles and are long-standing friends of Bulgaria and the University. Diplomas of its graduates are both nationally and internationally acknowledged. Lots of teachers and students have won high international awards. Guests of the University are prominent scientists, some of whom are Honorary Doctors of Veliko Tarnovo’s alma mater.

For more than 25 years students in bachelors and masters’ degrees have studied IT and computer sciences in St. Cyril and Methodius University of Veliko Tarnovo. Students have the chance to take part in various forms of students’ mobility under Erasmus and other European programs. While they are still studying and especially after graduation students have fast and successful career both in Bulgaria and abroad. Level of preparation makes graduates competitive for work in IT companies that develop system and applicable software and hardware in all economic sectors. Training in attractive masters’ degrees in professional field of Informatics and Computer Science in the following subjects: information systems, computer multimedia, data protection, multimedia systems and technologies in education, corporate network environments and applied computer science are also offered by the University.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



INTERVIEW

Interview with Marcel Schwab Partner, Country Tax Leader Bulgaria and Macedonia at EY (ERNST & YOUNG)

Ernst & Young is a leader in Assurance, Tax, Transactions and Advisory. According to you, what are Bulgaria’s advantages for attracting FI, compared to the rest of the countries in Central and Eastern Europe and our neighbor countries?

In terms of location for production (labor-consuming production), services (outsourcing) and development (IT, technical developments) for foreign investors, Bulgaria is a very interesting place on the European map. Bulgaria and the Bulgarians are far better than rumor has it. Unfortunately, this is known to only few outside Bulgaria.

Bulgaria has low salaries with attractive tax framework conditions - this is not known to almost anybody in the rest of Europe either - and, above all, it has people who love their country and are loyal if treated well, and the investment in education is returned later. Since in respect of production costs, and also labor costs, Bulgaria competes with India and China, particular emphasis has to be attached to this aspect. Despite the continuing need for infrastructural improvement compared to the said countries, Bulgaria has the logistic benefit and the advantage of being an EU member state. Moreover, the fixed exchange rate tied to the euro is a matter of great importance to investors. On the other hand, foreign investors view Southeast Europe as a region, and here Bulgaria competes primarily with Romania and the countries of the former Yugoslav Republic. I have this idea about making an objective comparison between the countries in this respect, that is, doing the so-called ‘Comparative assessment’ the results of which can be provided to potential investors.

What are the best practices of the EU member countries in attracting FI?

In my view, the question should be posed in another way. Based on the different history of the countries and their different mentality, you cannot just do “copy-paste”, that is, copy one to one and apply the same version; instead, you need to understand and bring to the fore what Bulgaria supports and emphasize the strengths, whereas the weaknesses have to be realized in order to be eliminated. The respective responsible authorities should view themselves as supreme service performers, as managers of the citizens, of the businessmen and of the country, respectively. A look across the border towards some neighboring countries could also help in this instance.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Bulgaria is not a very famous investment destination outside the EU. According to you, what actions should be taken in order for our country to become more popular?

Investors should not be overwhelmed with subsidies, because the latter sometimes are just an indicator of compensating for deficiencies. The attractive tax system is already a sufficient subsidy. As I have already mentioned, here, we need in Bulgaria:

• Stable, sustainable framework conditions • Effective management and administration directed towards rendering of service • Active counteraction against corruption, which should be visible to those outside • A will to change, and the factual changes should be accompanied by media activity (“It is only he who beats the drum that can be heard.”)

According to you, is there a need for legislative or tax system changes in Bulgaria? If yes, what should they be?

As regards the tax system – from the investor’s viewpoint – attention should be given to the following issues:

- Repeal of the restriction on using carried forward tax loss for 5 years

An investment is often made by stages, over several years, which is in contrast with Bulgaria’s interest through the restriction on carried forward tax loss for the country to be made attractive for foreign investors. In economic terms, this acts as a tax increase and, hence, as a negative subsidy.

- Possibility to give mandatory “Advance ruling”

The above-mentioned security for the laws is a decisive factor for investors. A rule should be created here, which is to motivate a legal requirement for advanced binding ruling.

- Rules and norms for tax “abuse of law”

The financial administration in Bulgaria can view every tax development that saves taxes from the “abuse of law” perspective. A tighter, non-arbitrary legal rule should be established here, which is the standard in other countries. Whoever pays taxes has to be entitled to save taxes.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



GERMAN-BULGARIAN CHAMBER OF INDUSTRY AND COMMERCE

German-Bulgarian Chamber of Industry and Commerce 25A Frederic Joliot-Curie Str.

1113 Sofia

tel.: +359 2 81630 10

e-mail: [email protected]

web: http://bulgarien.ahk.de

Follow us! www.facebook.com/ahkbulgarien

German-Bulgarian Chamber of Industry and Commerce (GBCIC) is part of the worldwide network of German Chambers of Commerce. They offer their experience, contacts and services to both German and foreign companies in 80 countries. In 2013 German-Bulgarian Chamber of Industry and Commerce celebrates 20 years German economy in Bulgaria. Representation of the German Economy in Bulgaria was founded in March 1993. In March 1995 it is followed by Business club of German economy in Bulgaria. The two organizations, headed by Doctor Mitko Vassilev, are predecessors of the German-Bulgarian Chamber of Industry and Commerce. March is an eventful month in the history of Bulgarian-German business contacts after the changes. GBCIC is founded in the spring-on the 9th March of 2004. Doctor Vassilev is chief manager of the chamber. Today it is the sole bilateral economic chamber in Bulgaria, founded on the basis of an intergovernmental decision and it is also the biggest one in the country. More than 470 companies, institutions and other organizations are members of the chamber.

The huge number of companies in Bulgaria that are interested in access to German market or have German origin reflects on the economic statistics. Trade exchange between Bulgaria and Germany is marked by record after record. In the last ten years the foreign trade exchange increased 2.5 times: from EUR 1.9 billion to EUR 4.8 in 2012. In 2013 it is expected to register a new peak. Apart from being the most important foreign market for Bulgarian goods, Germany is a strategic investor in Bulgaria, too. Volume of German direct investment in the country for the last decade has been over EUR 2.4 billion.

Die AHK (Auslandshandelskammer) Bulgarien gehört zum weltweiten Netz der deutschen AHK-Büros in etwa 80 Ländern. 2013 feiert die AHK Bulgarien das Jubiläum „20 Jahre Deutsche Wirtschaft in Bulgarien“. Im März 1993 wurde die Repräsentanz der Deutschen Wirtschaft und im März 1995 der Arbeitskreis der Deutschen Wirtschaft gegründet. Beide Strukturen wurden von Dr. Mitko Vassilev geleitet. Die AHK Bulgarien, deren Hauptgeschäftsführer auch Dr. Vassilev ist, ist der Nachfolger beider Organisationen. Der Monat März scheint, schicksalhaft bei der Entwicklung der deutsch-bulgarischen Wirtschaftsbeziehungen nach der Wende zu sein. Die AHK Bulgarien wurde am 9. März 2004 gegründet. Sie ist die einzige bilaterale Wirtschaftskammer in Bulgarien, die aufgrund eines Regierungsabkommens besteht. Die Kammer ist mit über 470 Mitgliedern – Unternehmen, Institutionen und Organisationen – die größte bilaterale Wirtschaftsorganisation hierzulande.

Die hohe Anzahl von Firmen in Bulgarien mit Interesse am deutschen Markt und die Menge der Unternehmen mit deutschen Wurzeln spiegeln sich auch in den Wirtschaftsstatistiken nieder. Das Handelsvolumen zwischen beiden Ländern wird 2013 mit rund 5 Mrd. Euro einen neuen Rekord erreichen. In den letzten zehn Jahren ist der Handelsumsatz 2,5 Mal gestiegen: von 1,9 Mrd. Euro auf 4,8 Mrd. Euro (2012)! Deutschland ist nicht nur der wichtigste ausländische Markt für bulgarische Produktion, sondern auch ein strategischer Investor in Bulgarien. Der Wert der deutschen Direktinvestitionen in den letzten zehn Jahren beläuft sich auf 2,4 Mrd. Euro.

Die AHK Bulgarien bietet sowohl deutschen als auch bulgarischen Unternehmen unter der Servicemarke DEinternational verschiedene Dienstleistungen an,

mailto:[email protected]

http://bulgarien.ahk.de/

http://www.facebook.com/ahkbulgarien

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



Under the DEinternational brand, the German-Bulgarian Chamber of Industry and Commerce offers to German, as well as to Bulgarian companies, wide range of services aimed at supporting economic relations between Germany and Bulgaria. The Chamber is an official representative of leading German fair enterprises in Bulgaria: Munich, Leipzig, Frankfurt, Cologne, Nuremberg and Düsseldorf fairs.

In 2003 was founded a representation of Bavaria in Bulgaria within the German-Bulgarian Chamber of Industry and Commerce. The Representation of Bavaria in Bulgaria is also headed by Doctor Mitko Vassilev. It is a result of Bavarian economic ministry’s strategy to step on new foreign markets.

GBCIC strives to improve framework conditions for doing business. For instance, by taking stand on important public issues. Via active work of the ten specialized committees and consultative councils the chamber exercises its influence in various fields of economic policy that are important to its members. An important moment in the German-Bulgarian Chamber of Industry and Commerce’s activity is the dual vocational training. Introducing elements of the dominant in Germany education system, Bulgaria may overcome numerous problems, such as youth unemployment, migration and lack of qualified staff.

um den wirtschaftlichen Austausch zwischen Deutschland und Bulgarien zu unterstützen. Die Kammer vertritt sechs der größten deutschen Messegesellschaften: Messe München, Leipzigermesse, Messe Frankfurt, Koelnmesse, NürnbergMesse und Messe Düsseldorf.

2003 wurde im Rahmen der AHK Bulgarien die Repräsentanz des Freistaats Bayern gegründet. Bayerischer Repräsentant ist Dr. Mitko Vassilev. Die Repräsentanz entstand um Zuge der Strategie des Bayerischen Wirtschaftsministeriums, neue ausländische Märkte zu erschließen.

Die AHK Bulgarien setzt sich für die Verbesserung der Rahmenbedingungen ein, indem sie z. B. Stellung zu wichtigen gesellschaftlichen Themen nimmt. Durch die aktive Arbeit der insgesamt zehn kammerinternen Fachausschüsse und Beiräte etabliert sich die Organisation als wichtiger Akteur in verschiedenen Bereichen der Wirtschaftspolitik, die für die Mitglieder relevant sind. Schwerpunkt der Tätigkeit der AHK Bulgarien ist die duale Berufsbildung. Die Einführung von Elementen des in Deutschland etablierten dualen Berufsbildungssystems wäre eine mögliche Lösung für Probleme wir die Jugendarbeitslosigkeit, die Migration und den Fachkräftemangel.

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



MACROECONOMIC INDICATORS

Foreign Direct Investments in Bulgaria EUR mln

Net cash flow - annual data

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

903.4 980 1850.5 2735.9 3152.1 6221.6 9051.8 6727.8 2436.9 1151.2 1330.2 1480.5

Net cash flow – quarterly data

2013 2013'Q1 2013'Q2 2013'Q3 2013'Q4

quarters 476.4 260.6* 420.5*

Net cash flow – monthly data

2013 I II III IV V VI VII VIII IX X XI XII

months 97.8 192.7 185.9 -70.8* 152.1* 179.3* 262.2* 122.1* 36.2* -103.8* Data is updated (as to 17.12.2013) Source: BNB

Main economic indicators EU-Bulgaria-Germany European Union Bulgaria Germany

GDP (purchasing power parity) $ mln 15 970 000 [2012] 105 500 [2012] 3 250 000 [2012]

GDP - real growth rate % -0.3 [2012] 0.8 [2012] 0.7 [2012]

GDP - per capita (PPP) $ thousand 35.1 [2012] 14.5 [2012] 39.7 [2012]

Industrial production growth rate % -1.6 [2012] 1.2 [2012] -0.5 [2012]

Labor force Mln 230 [2012] 2.585 [2012] 43.93 [2012]

Unemployment rate % 10.3 [2012] 11.1 [2012] 5.5 [2012]

Budget surplus (+) or deficit (-) % of GDP n.d. -0.5 [2012] 0.2 [2012]

Public debt % of GDP n.d. 16.2 [2012] 81.9 [2012]

Inflation rate (consumer prices) % 2.6 [2012] 3 [2012] 2.1 [2012]

Current account balance $ mln -34 490 [2011] 542.8 [2012] 208 100 [2012]

Export $ mln 2 170 000 [2011] 26 820 [2012] 1 460 000 [2012]

Import $ mln 2 397 000 [2011] 31 500 [2012] 1 222 000 [2012]

Reserves of foreign exchange and gold $ mln 863 800 [2011] 20 500 [12m 2012] 248 900 [12m 2012]

Debt - external $ mln 15 500 000 [12м 2012] 50 540 [12м 2012] 5 719 000 [12m 2012]

Stock of direct foreign investment - at home $ mln n.d. 52 990 [12м 2012] 1 307 000 [12m 2012]

Stock of direct foreign investment - abroad $ mln n.d. 1 923 [12м 2012] 1 790 000 [12m 2012]

Source: CIA /www.cia.gov

of 26


tel.: (+359 2) 985-5500, Fax: (+359 2) 980-1320



UPCOMING EVENTS

22-25 January

2014

Davos-Klosters, Switzerland

World Economic Forum Annual Meeting 2014 The Reshaping of the World: Consequences for Society, Politics and Business

February 2014

Bulgaria InvestBulgaria Agency (IBA) organized for the eighth time the annual awards Investor of the Year 2013 The aim of the event is to acknowledge the most important investment projects implemented in Bulgaria in 2013.

18 February 2014

Hotel Cascais Miragem,

Cascais, Portugal

The Lisbon Summit The outlook for economic growth and reform

20-21 February

2014

Fairmont Pacific Rim, Vancouver

Canadian Financing Forum 2014

27-28 February

2014

Paris, France Global Forum on Competition


investbulgaria agency

Documents