Bulgaria right place for auto parts manufacturing

1
Bulgaria Unique
Investment Location
2
Bulgaria a linkage between Europe and Asia
3
Why Bulgaria

• Stable political financial environment
• 10 corporate income tax (lowest in EU) 0 for
  manufacturing companies in areas with high
  unemployment
• Free repatriation of capital
• Private judicial executors and notaries
• Fast company registration
• 22 of population hold university degree
• 35,000 Bulgarian students in Europe. Second
  largest group after China
• Geographic cultural proximity

4
Steady GDP growth, 2002 - 2006
Source Bulgarian National Bank
5
Decreasing unemployment rate, 2002 - 2007
July 2007
Source Bulgarian National Bank
6
Inflation, avg.(), 2000 - 2006
Source Bulgarian National Bank
7
Bulgaria leads CEE countries in terms of FDI to
GDP indicator
FDI to GDP, , 2006 2007F
Source Bank Austria Creditanstalt
8
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??????????? ???? 2006 ?. (1)
Record inflow of non-privatization FDI in 2006
2007, EUR m
4 364
3 396
3 103
2 736
1 856
1 003
980
903
866
January August 2007
Source BNB, IBA
9
FDI stock by country, 1992 2006
Source BNB, IBA
10
FDI stock by sectors, 1992 - 2006
Source BNB, IBA
11
Top foreign manufacturing investors (between 24
580 m)
12
Comparison between Bulgaria and Europe
Labour costs (USD/hour)
Source Economist Intelligence Unit
13
Comparison between Bulgaria and Europe
Annual nominal wage growth,
Source Economist Intelligence Unit
14
Corporate income tax rate, 2007
Comparison between Bulgaria and Europe
0 for manufacturing companies in areas with
high unemployment
Source Economist Intelligence Unit
15
Investment incentives in Bulgaria

• 10 corporate income 0 for manufacturing
  companies in areas with high unemployment
• Opportunity for RD expenditure write-off
• Depreciation of 2 years for computers and new
  manufacturing equipment
• 2-year VAT exemption for imports of equipment for
  investment projects over  5 million, creating at
  least 50 jobs
• 7 withholding tax on dividends and liquidation
  quotas (0 for EU tax residents holding at least
  20 of the Bulgarian company)
• 24 highest bracket for personal income tax
  (monthly income over 300)
• Up to 1 year minimum salary and reimbursement of
  social/health care security for employing young
  people and disadvantaged people through the
  Employment Agency

16
New Investment Promotion Act

• Equal treatment for Bulgarian and foreign
  investors
• Investment classes A and B depending on the
  value, region and sector allocation of the
  investment
• Priority sectors and activities
• Manufacturing industry and production of
  electricity from renewable energy sources
• High-tech activities in the field of ICT, RD, as
  well as education and human health care

17
New Investment Promotion Act
Investment Classification ( Million)
General
Municipalities with unemployment up to 35 higher
than the average for the country
Municipalities with unemployment higher than 35
of the countrys average or high-tech
manufacturing
Computer technologies and RD
18
Incentives under the new Investment Promotion Act

• All classes (AB)
• Information services and shortened administrative
  services
• Preferential treatment upon acquisition of a
  right of ownership and limited real rights over
  real estate private state or private municipal
  property
• Financial support for vocational training of
  employees up to 29 years old for the needs of the
  investment project
• A class
• Individual administrative services
• Infrastructure support to the borders of the
  investment
• project site

19
InvestBulgaria Agency

• InvestBulgaria Agency is the Government
  investment promotion arm, part of the Ministry of
  Economy and Energy
• IBA services
• Comparative macroeconomic information
• Legal advice
• Data on operational costs
• Assistance with feasibility studies
• Assistance with site selection
• Identification of potential suppliers,
• contract manufacturing or joint venture
  partners
• Creating linkages with local university
• Creating linkages with central and local
  governments
• Information and provision of investment incentives