Business Fact Sheet

Political and economic data

  • Territory – 110,994 sq km
  • Population – 7.85 million
  • GDP, 2003 – $ 19.9 billion
  • Political system: parliamentary republic
  • Stable political environment & low country risk

-        NATO member since May 2004; EU entry expected in 2007

  • Consistent record of macroeconomic stability

-        2003 real GDP growth of 4.3%

-        2003 year-end inflation of 2.3%

  • Strategic geographic position as a bridge between Europe and Asia 
  • Highly educated and skilled work force 

-        2nd in international IQ tests (MENSA International)

-        significant percentage of English speakers

  • Europe’s most competitive wage levels 

-        monthly average gross salary of € 149

  • Free movement of capital
  • No restrictions on after-tax repatriation of profits
  • Free trade opportunities within a market of over 550 million consumers

-        EU, EFTA and CEFTA countries, Macedonia, Turkey, Estonia, Lithuania, Latvia and Israel

Lower operational costs for water supply and construction works compared to other CEE countries

 

 

Major investment incentives

  • Corporate tax rate – 19.5% (down to 15% in 2005) and 0% in areas of high unemployment
  • VAT exemption for imports for investment projects over € 5 million
  • Annual depreciation rate of 30% for machinery & equipment & 50% for software and hardware
  • Substantial asset discount prior to the EU membership compared to the rest of Europe
  • Opportunity to buy land through a company registered in Bulgaria with up to 100% foreign ownership
  • Institutional support for priority investment projects
  • Adoption of International Accounting Standards
  • 51 treaties for avoidance of double taxation
  • 55 agreements on mutual protection and promotion of foreign investment

 

 

How does Bulgaria compare?

Investment position

Country

GDP growth, %

Inflation, average 2003, %

Investment rating, Moody’s

Corruption Index 2003

(10 = lowest corruption)

2002

2003 P

Bulgaria

4.8

4.3

2.3

Bа2

3.9

Croatia

3.5

4.3

n.d.

Baa3

3.7

Czech Republic

2.0

2.9

-0.1

A1

3.9

Hungary

3.5

2.9

4.7

A1

4.8

Poland

1.6

3.7 F

0.7

A2

3.6

Romania

4.9

4.9 F

15.3

Ba3

2.8

Serbia

4.0

5.0

13.4

n/a

2.3

Slovakia

4.4

4.2

8.5

A3

3.7

Turkey

7.8

5.8 F

n.d.

B1

3.1

EU 15

1.0

0.7

2.0

 

 

Source: EUROSTAT, IMF, Moody’s, Transparency International, national banks

 

Investment performance

Country

FDI per capita, USD, 2001-2003 P

FDI per capita, USD, 2003 P

Rank in the UNCTAD FDI performance index, 1999-2001

Starting a business

No. of procedures

Duration, days

Cost, GNI per capita, %

Bulgaria

132

182

25

10

30

8.3

Croatia

308

381

22

13

50

18.2

Hungary

167

170

53

5

65

64.3

Romania

57

70

75

6

27

11.9

Serbia

63

128

-

10

44

13.3

Source: Population Reference Bureau, UNCTAD, World Bank, central banks

 

Taxation rates and labour cost

Country

Corporate tax,

%, 2004

VAT standard rate, %, 2004

Average monthly gross salary, EUR,

2004

Social security contribution as % of employees’ gross salary

Personal income tax rate for salaries, %

paid by the employer

paid by the employee

Bulgaria

19.5

20

149 (March)

32.2

10.5

12-29

Croatia

20

22

794 (March)

16.6

20.6

15-45

Czech Republic

28

22

510 (Q1)

35

12.5

15-32