Radoslav Tashev

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BPO opportunities in Bulgaria
Radoslav Tashev Legal Expert Invest Bulgaria
Agency Prague, December 2006
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Why Bulgaria

• EU member as of Jan 1st 2007
• Cultural proximity
• Regulatory proximity
• Geographic proximity (short flight times,
  same/close time zone)
• Multilingual workforce
• Availability of talent
• Employee loyalty
• Highly attractive labor costs
• Low wage growth rates
• Reasonable office prices
• Reliable Telecom infrastructure
• One of the most favorable tax regimes in Europe
  (10 Corporate Income Tax)

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BPO market in Bulgaria

• 34 contact centres in Bulgaria
• Largest contact centres employ 3,600 agents
• 90 university graduates
• All fluent in at least one foreign language
• All have undergone extensive training
• Low employee turnover - 15
• Low wage levels / average company cost
• EUR 300 470 for contact agent
• EUR 550 650 for supervisor

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Leading business process outsourcing operations
in Bulgaria
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Leading business process outsourcing operations
in Bulgaria
(1) Planned to grow to 125 (2),(3) Currently
evaluating expansion opportunities
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Labor force and unemployment, 1H 2006
Source National Statistics Institute
Number of universities in big cities
Universities with mixed profile Pls., check
http//www.swu.bg/index_en.htm,
http//www.aubg.bg/
Source Ministry of Education and Science
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Wage levels by major cities
Average monthly net salaries in major Bulgarian
cities (EUR), 2H 2006
The above listed salary levels apply for call
centre agents (entry level, non IT) add some 15
for Sofia and 10 for Varna
Source National Statistics Institute
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Employer / employee cost
Bulgaria social security rates, 2006
paid over the gross salary
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Number of university graduates by major city, 2005
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Investment incentives in Bulgaria

• 10 corporate income tax (will be reduced to 10
  as of 1Jan 2007) 0 for manufacturing companies
  in areas with high unemployment
• Opportunity for RD expenditure write-off
• Flexible depreciation rates (up to 50) 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

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Hewlett-Packard will create 1000 jobs in Bulgaria
in 2006-2007
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IBA

• Invest Bulgaria Agency
• Invest Bulgaria 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 regional
  information related to unemployment data,
  availability of skilled labor force, education
  level, infrastructure, foreign investors,
  industrial zones, free premises
• 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