10 Things That You Need To Know About Doing Business In Bulgaria

 

         1. Capital for forming a company. As from January 2010 the Bulgarian parliament have decided to decrease the minimal capital required for registration of a limited liability company from EUR 2500 to EUR 1. This was part of the significant anti-crisis measures that were taken from the Bulgarian government.

         2. Registering a company in Bulgaria is complicated . Registration of limited liability companies and joint stock companies in Bulgaria can be registered within 5- 10 working days after all the necessary documentation is submitted in the Commercial Agency. Bulgaria was ranked 50 th out of 183 economies by the World Bank report in 2010 for the ease of doing business in Bulgaria (an increase of 31 positions from 2009).

         3. Labor force in Bulgaria is low-qualified, incompetent and expensive. Labor force in Bulgaria is talented and educated and has one of the lowest wage rates in EU. 54 universities and specialized colleges spread throughout the country in 16 cities.

         4. Distinction between national and international companies. Companies with foreign interest established in Bulgaria as well as local companies operate under the same rules and conditions. Furthermore, Bulgaria has signed Double Tax Treaties with 67 countries.

         5. The economic envirounment in Bulgaria is unstable. Macroeconomic stability is achieved by pegging the Bulgarian currency - "LEV" to the EURO. Major international credit rating agencies acknowledged the progress achieved and give Bulgaria an investment grade rating. Bulgaria's exchange rate is fixed to the Euro at 1.95583 BGN to 1 Euro.

         6. Tax rates are high in Bulgaria. The lowest tax rates in Europe are in Bulgaria – 10% both on personal and corporate income which contributes to strong foreign investment flows. The VAT is at the standard rate of 20%.

         7. Working permit is required for foreigners to work in Bulgaria. As from 01.01.2007, with the entry into force of the Agreement for the accession of the Republic of Bulgaria in the European Union, citizens of EU member countries can exercise their right to free movement with the intention to work in the Republic of Bulgaria without requiring a work permit.

         8. Although Bulgaria is a communist country, it has a socialist President. Bulgaria is a parliamentary democracy. In the July 2009 General Elections the right-wing party GERB (Citizens for European Development of Bulgaria) won 116 of the 240 seats in the Bulgarian parliament. The Prime Minister is its unformal leader - Boiko Borissov.

         9. Infrastructure (especially transport) is underdeveloped in Bulgaria. Bulgaria's transport network is currently being renovated. Bulgaria benefited from EU infrastructure funds which resulted in rapid improvements of the entire Bulgarian road network. Furthermore Bulgaria has 4 international airports. The biggest airport is in Sofia. However, there are airports in Plovdiv, Varna and Bourgas which are used for local flights and for charter flights. Bulgaria also has two major ports on the Black Sea - in the towns Varna and Bourgas. Both act as East-West transport corridor gateways of Bulgaria. Bourgas is the second largest port in Bulgaria, and is in close proximity to Serbia, FYR Macedonia, Greece and Turkey.

         10. Foreign investments in Bulgaria (classified as substantial) are missing. Economic stability and Bulgaria's EU accession has made Bulgaria an increasingly attractive option for investment. Some of the top investment countries include Austria, Germany, Greece and Russia. Hot investment sectors include real estate, construction, information technology and software development.