Bulgaria right place for auto parts manufacturing

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Bulgaria your investment decision
International Economic Forum STRUMA Blagoevgrad,
21-22 May 2009
Dr. Stoyan Stalev Executive Director
InvestBulgaria Agency www.investbg.government.bg
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Structure of the Presentation

• Positioning Bulgaria
• Why Bulgaria
• Macroeconomic Indicators
• FDI Inflow
• Highly Skilled Labor Force
• Comparison between Bulgaria and Europe
• Business Sectors of Highest Potential for
  Investors
• Our achievements in figures
• Investment Promotion Act
• Investment Incentives in Bulgaria
• InvestBulgaria Agency

3
Pan-European Transport Corridors
4
Market access
5
Why Bulgaria

• EU membership and NATO membership
• Macroeconomic and financial stability
• EUs most favourable taxes
• 10 corporate income tax rate
• 0 in high-unemployment areas
• 10 flat tax rate on personal income
• Europes lowest operational costs
• Well-educated and highly-skilled labour force
• 45,000 Bulgarian students in Europe.
• Government financial support for priority
  investment projects
• Linking Europe and Asia
• Excellent climate, natural scenery, food and
  hospitality

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Steady GDP growth, 2002 2008
Source Bulgarian National Bank
7
Inflation, (annual change, ), 2004 - 2008
Source Bulgarian National Bank
8
Decreasing unemployment rate, 2003 - 2008
Source Bulgarian National Bank
9
Credit rating
Source Ministry of Finance
10
Record inflow FDI in 2006 2008, EUR m
Preliminary Data
Source BNB, IBA
11
Bulgaria leads CEE countries in terms of FDI to
GDP indicator
FDI to GDP, , 2007 2008
Source Bank Austria Creditanstalt
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FDI stock by country,1996 2008, , EUR m
Source BNB, IBA
13
FDI stock by sector, 1998 2008, , EUR m
22
19
19
17
6
6
5
6
Source BNB, IBA
14
Language education in upper secondary general
schools by city, 2006/2007
Source National Statistics Institute
15
Students enrolment in vocational schools
technical universities for 2006/2007
3 439
3 483
Rousse
Varna
16 291
Gabrovo
4 692
Sofia
Plovdiv
3 690
Source NSI
16
Enrolment in university IT and engineering
programs for 2006/2007
36,000 Total number of students enrolled in IT
and Engineering related programs
Source NSI
17
Comparison between Bulgaria and Europe
General Government Balance,
Czech Republic
Hungary
Romania
Slovakia
Bulgaria
Source Economist Intelligence Unit
18
Comparison between Bulgaria and Europe
Average monthly wages, Q2 2008, EUR
Source Economist Intelligence Unit
19
Comparison between Bulgaria and Europe
Average monthly wages growth, Q2 2008 ( change,
yoy)
Source Economist Intelligence Unit
20
Corporate income tax rate, 2009
Comparison between Bulgaria and Europe
0 for manufacturing companies in areas with
high unemployment
Source IBA
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Manufacturing
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Energy Sector
23
IT BPO
24
Real estate Tourism
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Our achievements in figures
August 2004 May 2009

• We are assisting 115 certified investment
  projects
• EURO 9.4 bln planned investments
• 45 410 new jobs will be created

Source IBA
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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

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Investment classifications under the investment
promotion act, ( Million)
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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

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Amendment Bill for the Investment Promotion Act

• Conformity with Commission Regulation (EC) No
  800/2008
• Removing the age limit of 29 for vocational
  training of personnel for certified investment
  projects
• Possibility for certified investors to buy, rent
  or exchange rights over real estate from state or
  municipal companies at preferential prices but
  not lower than the property tax assessment
• State support for priority investment projects
  meeting one or more of the following criteria
• the volume of the investments to be at least
  three times the threshold amount for Class A
  certification
• creating jobs in high-tech activities or in
  undeveloped regions
• construction of industrial zones or technology
  parks

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National Company Industrial Zones Plc
National Company Industrial Zones is a stock
company, dealing with the building,
establishment, management and marketing of
industrial zones within Bulgaria

• The Companys main purposes are
• To encourage investments in branches with high
  added value
• To support projects of significant economic
  interest for the country
• To support the development of separate economic
  regions in the country

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National Company Industrial Zones Plc

• NCIZ started the building of the following
  industrial zones
• Rousse 34,5 ha, with option to increase to 120
  ha
• Plovdiv 15,5 ha
• Varna municipality Suvorovo above 100 ha
• Svilengrad 7 ha from which 30 with developed
  infrastructure
• Vidin 30,8 ha land (7300 sq. m. covered and
  3000 sq. m. uncovered areas

Contact address Sofia 1000 1 Angel Kanchev
str. tel./fax [phone] e-mail
office_at_nciz.bg www.industrialzones.bg
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Investment incentives in Bulgaria

• 10 corporate income tax
• 0 for manufacturing companies in areas with high
  unemployment
• 10 personal income tax, flat rate
• 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
• 5 withholding tax on dividends and liquidation
  quotas (0 for EU tax residents holding at least
  15 of the Bulgarian company)
• 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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InvestBulgaria Agency

• InvestBulgaria Agency is the 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

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InvestBulgaria Agency Sofia 1000, 31 Aksakov
Str. Phone [phone] Fax [phone]
1320 E-mail iba_at_investbg.government.bg Web
www.investbg.government.bg