By Hristo Milchev
Bulgaria is located at the heart of the Balkan Mountains in Eastern Europe. Bordered by Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south and the Black Sea to the east, Bulgaria is a strategic logistics hub because of its location and transport opportunities. The major airports are based in the largest cities /Sofia, Plovdiv, Bourgas and Varna/ and thanks to the Black Sea outlet it has two main sea ports /in Bourgas and Varna/. The north border is the Danube river itself which is the second longest river in Europe and connects central Europe to the Black sea.
Bulgaria is a member state of the European Union since 2007. It is also member of NATO and is expected to join the Eurozone in the near future. With sustainable economic growth and stable financial system Bulgaria is an attractive destination for establishing businesses and foreign investments. It has the second-lowest government debt in the European Union and one of the lowest budget deficits.
The business environment is supplemented by the fact that Bulgaria has the most favourable tax regime in Europe. For example the companies pay corporate tax that amounts to 10 % of the net income for the respective year and the value added tax (VAT) of 20 %. The cost of doing business here is way below the Europe’s avеrage. It is not expensive to set up a company in Bulgaria, to open a bank account and to rent an office space. The most commonly used by foreigners forms of business organisations are Limited Liability Company, Joint Stock Company, Branch and Trade Representative Office.
The fact that the cost of Labour in Bulgaria is the lowest in the EU might also influence the decision to incorporate business exactly here. However, this does not reflect on the quality of the workforce. It is just the opposite – the younger people are well educated and are fluent in many languages because of the expanding professional opportunities coming from the growing economy and from abroad. Many international giants like Coca-cola, HP, Experian, Sutherland, AIG, IBM etc. have already established their outsourcing companies in Bulgaria.
Bulgarian jurisdiction is part of the Continental legal system and is suitable for foreign investments. The Bulgarian Investment Promotion Act introduces a system of benefits for the investors such as tax and employment incentives and relief regime for acquiring a residence permit and Bulgarian citizenship. Both topics will be subject to future articles.