– An advantageous taxation system for investors;
– A sizeable workforce that is skilled and cheap;
– Very low cost of living;
– Its membership to the European Union; and
– A strategic geographical position.
Even though the country has become attractive to investors and especially after its membership to the European Union, Bulgaria still has to take on a number of challenges:
– Inefficient bureaucracy;
– A high level of corruption;
– The non implementation of the intellectual property and copyright laws; and
– A significant amount of the population having limited revenue
Government Measures to Motivate or Restrict FDI:
The Bulgarian government has established a very advantageous taxation system in order to attract investors and the costs of creating a company have also been lowered. The government has undertaken the privatization of a number of companies. We can name the following, amongst the most attractive measures put in place:
– A fixed company taxation rate at 10%;
– Competitive labor force costs;
– A skilled active population; and
– The country’s membership to the European Union and its access to the EU structural funds.
Foreign investors, who are citizens of countries outside the EU, EEA, and Switzerland, are eligible for a Bulgarian permanent residence permit valid for an unlimited period of time if they invest over BGN 1,000,000 (approximately EUR 511,292).
Country Comparison For the Protection of Investors
|Bulgaria||Eastern Europe & Central Asia||United States||Germany|
|Index of Transaction Transparency*||10.0||7.0||7.0||5.0|
|Index of Manager’s Responsibility**||2.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||9.0||6.0||4.0||8.0|
|Index of Investor Protection****||7.3||6.4||6.5||6.0|
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.