To fully comprehend the investment climate in Bulgaria as of 2017, one needs to take account of the following facts:
1. a significantly stable and reliable political situation based on the membership of Bulgaria in the European Union and NATO.
2. Economically, Bulgaria has been rated by Moody’s in October 2016 as BAA2 with stable perspective
3. The currency risk is practically absent in Bulgaria, because there is a “currency board” in Bulgaria since 1997, which pegs the exchange rate of the Bulgarian currency to the EURO. All other currencies are exchanged at the exchange market and every company and person is entitled to freely purchase and sell currency without any limitation and to transfer and receive amounts to and from abroad.
4. With respect to the bank system reliability, the institutional risk is at an acceptable level. Currently in Bulgaria operate 26 banks, most of them subsidiaries or branches of large international institutions – Unicredit, Societe General, Raiffeisen, BNP – Paribas, ING, etc. In July 2016, all banks passed successfully a stress test as per European requirements. Only two banks have been found needing to increase their share capital, while all others have been awarded a B to BBB rating.
5. Commercial activity in Bulgaria is positively affected by the consistent adherence to and following of the rules guaranteeing free movement of capital, goods and people imposed on Bulgaria as a member of the European Union.
With respect to legal framework:
- 1. There are no limitations imposed on foreign companies and persons to establish commercial companies in Bulgaria
- 2. Anyone can register a new publicly limited company with considerable capital and apply for loans and credits from abroad in order to support the expansion of its business
- 3. Bulgaria enjoys a favourable tax regime. The tax rate on the profit of companies and natural persons is fixed at 10 % flat (in the agricultural sector this percentage drops to 0 %). The dividend tax is 5 % and the VAT is 20 %.
- 4. Until the yearend of 2020, one can apply for EU funding with projects in many different economic areas with the intensity of the projects ranging from 40 to 80 %, a percentage much larger than the one available in other EU states
Excellent opportunities for investments with considerable rate of return, minimum risk and profitable tax conditions are for example: acquisition of agricultural land and real estates; financial schemes like leaseback (see more details in attached file); acquisition of an already established bank or registration of a bank subsidiary of an existing foreign bank.
Last, but not least in Bulgaria and predominantly in the capital Sofia there are experienced professionals – lawyers, economists, bankers, IT specialists, with knowledge of several languages, who are loyal and can manage the business responsibly.
In order to attact investors, Bulgaria amended its legislation to allow foreign citizens to apply for Bulgarian (European) citizenship in case ofcertain investments - in companies, projects, bank accounts, etc. Apart from this, natural persons may use the possibilities of the programmes for skilled immigrants and artists which programmes provide an easier procedure for application for Bulgarian (European) citizenship.