Transcript Slide 1
Bulgaria – investment climate and business opportunities Bulgaria is only 3 hours flight from all major destinations in Europe, Russia and the Mediterranean region Strategic geographic location Major transport corridors passing through Bulgaria Macroeconomic indicators Real GDP Growth Bulgarian 6.5% 6.4% Inflation (HICP) EU-28 Bulgarian EU-28 12.0% 6.2% 0.4% 1.8% 0.8% 0.9% 7.6% 2.5% 3.0% 3.4% 2.4% 0.4% -0.3% -5.5% 2006 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 2014* 1,151 1,330 1,070 1,092 2010 2011 2012 2013* * February Unemployment Bulgarian FDI Inflow 9.1% 6.9% € mln. EU-28 9.2% 10.4% 11.4% 11.8% 9,052 13.1% 6,728 6,222 6.3% 2,437 2007 2008 2009 2010 * January Source: Bulgarian National Bank, Eurostat 2011 2012 2013 2014 2006 2007 * Preliminary data 2008 2009 FDI in Bulgaria comes mostly from EU countries and is concentrated in four main sectors FDI by host country, 1996-2013 (€ mln.) (1) Netherlands FDI flows by industry, 1996-2013 (€ mln.) 6306.2 (2) Austria Real Estate 7936.9 5750.9 Finance (3) Greece 3585.8 (4) Germany Trade 7059.5 7056.2 2834.3 (5) UK 2409.8 Manufacturing (6) Cyprus 2358.7 Energy (7) Russia 3490.6 1889.8 Construction (8) Italy 1413.6 (9) USA 1395.6 (10) Hungary 1314.6 Telecom Source: Bulgarian National Bank 7479.3 Other 2948.3 2647.4 3 207.8 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 Sweden Denmark Latvia Slovakia Czech Republic Finland Norway Slovenia Croatia Romania Lithuania Bulgaria Luxembourg Estonia 0% -13% -12% -11% -7% -6% -5% -4% -3% -2% -1% 0% 1% 15% Average budget deficit/surplus (2007-2012) Source: Eurostat Bulgaria was the only European country with increased credit rating by Moody’s in 2010 and 2011 Country credit ratings comparison Q4 2013 S&P Rating Country Moody's rating Fitch Rating TE Rating* Czech Republic AA- Stable A1 Stable A+ Stable 79.28 Stable Poland A- Stable A2 Stable A- Stable 67.41 Stable Italy BBB Negative Baa2 Negative BBB+ Negative 62.09 Negative Bulgaria BBB Negative Baa2 Stable BBB- Stable 54.24 Stable Spain BBB- Stable Baa3 Negative BBB Negative 52.55 Negative Croatia BB+ Stable Baa3 Negative BBB- Negative 48.85 Stable Macedonia BB Stable BB+ Stable 47.5 Stable Romania BB+ Stable Baa3 Negative BBB- Stable 47.35 Stable Turkey BB+ Stable Ba1 Positive BBB- Stable 44.58 Stable Hungary BB Stable Ba1 Negative BB+ Stable 42.58 Stable Serbia BB- Negative BB- Negative Ukraine B Negative B Stable Caa1 Negative *The TE credit rating is driven by a model created at Trading Economics. Source: Trading Economics Rating 40 Negative 28.75 Negative Educated and skilled workforce is among the main advantages of Bulgaria Key facts about education in Bulgaria Almost 60,000 students graduate every year from over 50 universities Bulgaria has one of the highest proportions of students abroad from all European countries 53 Universities, colleges and higher schools (6 with technical sciences) 80 000 Bulgarian students in foreign countries 24.6 % of population hold university degree 7 % of the workforce has engineering degrees 45.5 % from the population in Bulgaria speak at least one foreign language English language studied by ≈ 85 % of students Source: National Institute of Statistics, Bulgaria Business 19 480 Social sciences 8 372 Engineering 3 677 Health 3 166 Ireland Austria 1 553 Architecture 833 Agriculture 860 Other 14.2% 10.2% Bulgaria Greece Law 17.8% Slovakia 7 178 Education Iceland 12 684 8.3% 5.8% 4.7% Germany 3.1% EU-27 average 2.8% Romania 2.2% Czech Republic 2.1% Students in another EU / EEA country, % of all 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, 2013 Czech Republic Bulgaria €/kWh, 2013 9.00 Bulgaria 9.89 0.080 Estonia 0.084 0.086 Poland 10.06 Germany Austria 10.17 Turkey 0.089 Italy 10.53 Romania 0.090 EU average 10.56 Hungary 0.090 Spain 10.65 EU average France Germany Source: Eurostat 11.03 12.23 Czech Rep Slovakia 0.094 0.101 0.124 Bulgaria has one of the lowest business costs in Europe Average gross annual salaries in industry and services Lowest corporate income tax rate in Europe €, 2011 Bulgaria Romania Latvia 8 376 Slovakia 10 788 Germany Netherlands Denmark Source: Eurostat Romania 5 869 9 868 United Kingdom Bulgaria 4 599 Hungary EU average %, 2014 26 402 38 284 45 793 56 299 16% Hungary 19% Czech Rep 19% Croatia 20% Turkey 20% Estonia 42 900 10% 21% Slovakia 23% EU average 24% Germany 30% 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 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) 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 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 (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 Leading global investors have chosen Bulgaria as an FDI destination IT development Back office operations Chemical and metal Industry Engineering Food InvestBulgaria 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 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