Transcript Slide 1

Bulgaria – investment climate and business
opportunities
Sofia
October 2013
Macroeconomic indicators show consistent pre-crisis
economic growth and quick post-crisis recovery
Real GDP Growth
6.4%
6.5%
6.4%
Inflation (HICP)
Bulgaria
6.2%
0.4%
1.8%
EU-27
0.8%
Bulgaria
6.0%
7.4%
EU-27
12.0%
7.6%
2.5%
3.0%
3.4%
2009
2010
2011
2012
1,151
1,315
1,478
2010
2011
2012
2.4%
-5.5%
2005
2006
2007
2008
2009
2010
2011
2012
Bulgaria
9.1%
9.1%
6.9%
2005
2006
2007
2006
2007
2008
FDI Inflow
Unemployment
10.7%
2005
9.2%
10.4%
EU-27
9,052
11.4%
6,728
6,222
6.3%
2008
€ mln.
3,152
2009
Source: Bulgarian National Bank, Eurostat
2010
2011
2012
2005
2,437
2006
2007
2008
2009
FDI in Bulgaria comes mostly from EU countries and is
concentrated in four main sectors
FDI by host country, 1996-2012 (€ mln.)
FDI flows by industry, 1996-2012 (€ mln.)
(1)Austria
5,799
Real Estate
(2) Netherlands
5,710
Finance
(3) Greece
3,569
(4) Germany
2,702
(5) UK
2,578
(7) Russia
1,750
(9) Italy
(10) Hungary
1,395
1,311
Source: Bulgarian National Bank
7,990
7,604
Manufacturing
6,750
Trade
6,698
Energy
Construction
Telecom
Other
3,522
2,891
2,209
2,915
The total value of Italian direct investment to Bulgaria is €1.4
bn from 1996 until 2013
FDI have peaked in 2007. Last two years the
biggest investments are in the construction
sector
Six economic sectors represent about 97%
of all Italian investments
Italian FDI (€ mln)
379,54
163,94
126,55
87,81
71,21
25,07
Other
5%
Construction
9%
Real Estate
11%
Trade, repair and maintenance
12%
Finance
20%
Manufacturing
41%
180,9
138,78 100,09
94,33
42,98
51,19
-51,13
2000
2002
2004
2006
Source: Bulgarian National Bank
2008
2010
2012
Source: Bulgarian National Bank
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Why invest in Bulgaria?
•
•
•
Political and business stability
–
EU and NATO member
–
Currency board
–
Low budget deficit and government debt
Low cost of doing business
–
10% corporate tax rate
–
Lowest cost of labor within EU
Access to markets
–
European Union / EFTA
–
Russia
–
Turkey / Middle East
•
Educated and skilled workforce
•
Government incentives
Government financial indicators are remarkable not only
in the region, but on a pan-European scale
Average government debt (2007-2012)
140%
Greece
130%
120%
Italy
110%
100%
80%
70%
Belgium
Portugal
90%
Ireland
60%
50%
40%
30%
20%
10%
Iceland
France
Hungary
Germany
United Kingdom
Austria
Malta
Netherlands
Poland Cyprus
Spain
Turkey
Finland
Denmark
Latvia Slovakia
Czech Republic
Sweden Norway
Slovenia
Croatia
Romania
Lithuania
Bulgaria
Estonia Luxembourg
0%
-13%
-12%
-11%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
15%
Average budget deficit/surplus (2007-2012)
Source: Eurostat
Bulgarian economy maintains its excellent performance
despite global challenges
BG
Budget deficit for 2012, % of GDP
Egypt
Japan
United Kingdom
Spain
Greece
United States
India
Czech Republic
France
Netherlands
Poland
Denmark
Euro Area
Italy
Hungary
Austria
Brazil
Turkey
China
Sweden
Switzerland
Germany
Bulgaria was the only European country with
increased credit rating by Moody’s in 2010 and 2011
-10.9%
-9.8%
-8.3%
-8.0%
-7.0%
Estonia
-7.0%
-5.6%
-5.0%
Lithuania
-4.5%
Bulgaria
-4.1%
Spain
-3.7%
Ireland
-3.6%
Turkey
-3.3%
Portugal
-3.0%
-2.8%
-2.6%
Cyprus
-2.5%
-2.0%
Hungary
-1.6%
Iceland
0.0%
Latvia
0.0%
Greece
0.1%
01/10
Source: The Economist, Finance Ministry, Moody’s
07/10
01/11
07/11
01/12
07/12
01/13
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Bulgaria has one of the lowest business costs in Europe
Lowest corporate income tax rate
in Europe
Bulgaria
10%
Romania
Hungary
Slovakia
Czech Rep
Croatia
Turkey
Source: Eurostat; Savills
Cost of electricity for industrial
users is 70% of the EU average
€/kWh,
2012
Bulgaria
0.078
Estonia
0.082
Romania
0.083
Lowest cost of agricultural land
in the European Union
Romania
1,616
Bulgaria
1,671
€ / ha,
2011
16%
19%
19%
19%
Turkey
Czech Rep
Hungary
3,343
Czech Rep.
3,621
Poland
3,671
Greece
4,000
0.096
0.103
0.108
France
6,909
EU average
0.124
Slovakia
0.127
Germany
9,193
Germany
0.130
Netherlands
9,472
20%
20%
Slovakia
Belguim
8,079
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Educated and skilled workforce is among the main
advantages of Bulgaria
Almost 60,000 students graduate every year from
over 50 universities
Business
19,480
Social sciences
Health
Architecture
Agriculture
14.2%
10.2%
Bulgaria
3,677
8.3%
Greece
3,166
Austria
Law
17.8%
Slovakia
7,178
Education
Iceland
Ireland
8,372
Engineering
Bulgaria has one of the highest proportions of
students abroad from all European countries
5.8%
4.7%
1,553
Germany
3.1%
EU-27 average
2.8%
833
860
Other
Source: National Institute of Statistics, Bulgaria
Romania
2.2%
Czech Republic
2.1%
12,684
Students in another EU
/ EEA country, % of all
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:
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Shortened administrative procedures
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Preferential acquisition of state or municipal land
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Financial support for professional training / education
–
Infrastructure subsidies
–
Labor cost subsidies
–
Individual administrative services
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
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€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:
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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)
Which economic sectors have the highest potential for
attracting Italian investors ?
•
Services:
–
Transport and Logistics
–
Information technologies
–
Outsourcing of business processes
–
Health and tourism related to healthy
lifestyle
•
Industry:
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Transport equipment and machine
building
–
Electronics and Electrical engineering
–
Chemical industry
–
Food and Agriculture
Leading global investors have chosen Bulgaria as an
FDI destination
IT development
Back office
operations
Chemical and metal
Industry
Engineering
Food
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InvestBulgaria Agency
InvestBulgaria Agency is a Government investment
promotion arm, part of the Ministry of Economy and
Energy
IBA services:
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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
InvestBulgaria Agency
Sofia 1000, 31 Aksakov Str.
Phone: (+359 2) 985 5500
Fax: (+359 2) 980 1320
E-mail: [email protected]
Web: www.investbg.government.bg