Transcript Bulgaria – your investment decision Korea 20.10.2009

Bulgaria – your investment decision
“UBCCE Third Business Forum”
12-13 November 2009
Dr. Stoyan Stalev
Executive Director
InvestBulgaria Agency
www.investbg.government.bg
Structure of the Presentation











Strategic location
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
Pan-European Transport Corridors
9
4
7
10
8
Market access
Why Bulgaria
 EU membership and NATO membership
 Currency board
 EU’s most favourable taxes:
• 10% corporate income tax rate
• 0% in high-unemployment areas
• 10% flat tax rate on personal income
 Europe’s most competitive 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
GDP (annual real growth rate,%), 2002-2009
6.6
4.5
6.2
6.3
6.2
5.0
6.0
2009*
2002 2003 2004 2005 2006 2007 2008
* January - June 2009
-4.9
Source: Bulgarian National Bank
Inflation, (annual change, %), 2004 - 2009
12.5
6.5
7.8
6.5
4.0
0.2*
2004
2005
2006
2007
2008
2009
* January - September 2009
Source: Bulgarian National Bank
Unemployment rate (%), 2003 - 2009
13.5
12.2
10.7
9.1
2003
2004
2005
2006
8.0*
6.9
6.3
2007
2008
2009
* January - September 2009
Source: Bulgarian National Bank
Record FDI inflow in 2006 – 2008, EUR m
Greenfield+Expansion
8 596
6 549*
6 222
2 736
3 152
1 952**
1 851
866
1 103
903
980
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
* Preliminary Data, ** January – August
Source: BNB, IBA
Bulgaria leads CEE countries in terms of
FDI to GDP indicator
FDI to GDP, %, 2007 – 2008
29.7
19.2
6.0
6.8
4.9
3.4
5.8 6.6 6.1 5.8 6.2 5.4
5.4
3.3
3.0
CZECH
REP
HUNGARY
3.4
2.5
0.8
BULGARIA
4.4
2.5
-0.8 0.7
LATVIA
POLAND
ROMANIA UKRAINE
2007
SERBIA SLOVAKIA SLOVENIA TURKEY
2008
Source: BNB, Bank Austria Creditanstalt
FDI stock by sector, 1998 – 2008, %, EUR m
Real estate
7469.9
6477.5
Finance
6274.3
Manufacturing
5509.0
Trade
Construction
Electricity, gas and water
2247.5
1931.2
Telecom
1766.6
Other
1886.9
22%
19%
19%
16%
7%
6%
5%
6%
Quelle: BNB, IBA
FDI stock by country,1996 – 2008, %, EUR m
Austria
the Netherlands
Greece
Un. Kingdom
Germany
16%
12%
9%
8%
7%
5367.7
4145.7
3074.4
2710.0
2229.4
Belgium &
Cyprus
Luxemburg
USA
Hungary
Italy
5%
5%
4%
3%
3%
1726.2
1612.0
1285.8
1171.3
1105.4
Source: BNB, IBA
Greece investments in Bulgaria

Treaty for avoidance of double taxation
between Bulgaria and Greece

Treaty for encouragement and reciprocal
protection of investments

Greece investments (1996-2008)
3074.4 EUR m

The biggest investments are in Finance
and Telecom
Greece investment stock by years,
EUR million, 2004 - 2008
802.3
533.5
395.4
324.2
179.6
2004
2005
2006
2007
2008
Greece investment stock in Bulgaria as of end of 2008 amounts to EURO 3074.4
million, According to the FDI Stock by countries Greece is ranked 3rd
Source: BNB
Trade between Bulgaria and Greece
The trade between Bulgaria and Greece for 2008 amounts EUR 2676 m
1508
1230
1073
891
794
668
2004
1126
1168
967
735
2005
2006
Export to Greece
2007
2008
Import from Greece
Source: BNB
Language education in upper secondary
general schools by city, 2008/2009
132869
English
61262
39594
23764
10307
10124
German
French
Spanish
Italian
Russian
8253
4901
4175
12005
528
493
Sofia
Plovdiv
Varna
2862
262
681
25022
14288
12992
Source: National Statistics Institute
Students enrolment in vocational schools &
technical universities for 2008/2009
3592
4323
Rousse
Varna
Sofia
Gabrovo
4924
Plovdiv
16995
4132
~ 39,000 – Total number of
students enrolled in IT and
Engineering related programs
Comparison between Bulgaria and Europe
Strong Fiscal Policy and Stable Currency
General Government Balance, %
3.5%
Hungary
Romania
Slovakia
3.0%
Czech
Republic
Bulgaria
-2.2% -2.2%
-2.3%
-3.8%
-1.6%
-2.0%
-3.4%
*0% Forecast for 2009
-5.7%
2007
2008 E
Source: Economist Intelligence Unit, IBA
Comparison between Bulgaria and Europe
Average monthly wages, Q2 2008, EUR
945
744
790
463
261
Bulgaria
Romania
Slovakia
Hungary
Czech
Republic
Source: Economist Intelligence Unit
Comparison between Bulgaria and Europe
Corporate income tax rate, 2009
16%
16%
Rom ania
Hungary
19%
20%
20%
Slovakia
Czech
Republic
Turkey
10%
Bulgaria
* 0% for manufacturing companies in areas with high unemployment
Source: IBA
Price level indices for all consumer goods
and services, 2008, (EU27=100)
100
99
104
105
111
83
69
70
70
72
62
Fr
an
ce
Ita
ly
ul
ga
ria
R
om
an
ia
Po
la
nd
H
un
ga
ry
Sl
ov
C
ze
ak
ch
ia
R
ep
ub
lic
Sl
ov
U
ni
en
te
ia
d
K
in
gd
om
G
er
m
an
y
B
EU
27
51
Source: EUROSTAT
Manufacturing
Attractive sectors
 Electrical engineering
 Mechanical engineering
 Electronics
 Automotive parts manufacturing
 Chemical Industry
Competitive advantages
 Export oriented sectors
 The lowest operational cost in EU
 Highly skilled labour force
• 7% with engineering degree
• EUR 280 total average monthly
compensation (Q4 2008)
Major investors supported by
InvestBulgaria Agency
 Solvay (Belgium)
 Aurubis (Germany)
 Liebherr (Germany)
 Lufthansa Technik (Germany)
 Montupet (France)
 Italcementi (Italy)
 Sise Cam (Turkey)
 Stomana Industry (Greece)
 Miroglio (Italy)
 Knauf (Austria)
 Ixetic (Germany)
 Schneider Electric (France)
Energy Sector
Opportunities
 Wind parks
 Solar plants
 New nuclear PP
 Modernization and construction of
new TPPs
 Biomass
 Biofuel
Major projects supported by
InvestBulgaria Agency
 7 wind park projects
 3 projects for modernization and
construction of new TPPs
 2 Biomass projects
 3 Biofuel projects
Competitive advantages
 Skilled labour force
 Availability of natural resources
 Favorable climate conditions
 Harmonized legislation with the EU’s
 RES electricity production to
double (from 6% to 12%) by 2010
 Administrative and economic
incentives for RES energy
production
IT & BPO
Opportunities
 Software development
 IT support centers
 F/A shared service centers
 Contact centers
Competitive advantages
 Skills availability
 Strong traditions in IT development
 Reliable telecom infrastructure
 Europe's most competitive wages
 Reasonable office prices
 9.71% share of the GDP for 2008
(second fastest growing sector in the
country)
Main Players in Bulgaria
 IT
• Software AG (Germany)
• Microsoft (USA)
• Hewlett Packard (USA)
• IBM (USA)
• Nemetschek (Germany)
• Johnson Controls (USA)
• SAP Labs Bulgaria (Germany)
• CISCO (USA)
 BPO
• 60K (UK)
• Sutherland (USA)
• IBM (USA)
• OPI Global (USA)
• Hewlett Packard (USA)
• C3i (USA)
Real estate & Tourism
Opportunities
 Development of
• trade centers
• business parks
• residential parks
• convention centers
• winter resorts
• balneology and SPA tourism
• rural and alternative tourism
 Golf tourism
 Construction of luxury hotels
Major projects supported by
InvestBulgaria Agency
 23 trade centers projects
 6 business park projects
 9 golf projects
 5 winter resort projects
 5 balneology and SPA tourism
Competitive advantages
 Real Estate is the fastest growing sector in the country
 FDI inflow in Real Estate amounts to EUR 1900 mln. in 2008
(EUR 7409 mln. (22%) for the period 1998 – 2008)
Our achievements in figures
August 2004 – September 2009
 We are assisting 121 certified investment
projects
 EURO 9.8 bln planned investments
 53 800 new jobs will be created
Source: IBA
Investment Promotion Act
Promotion for initial investment in the following
sectors
 Manufacturing industry
 Production of electricity from renewable sources
 Computer technologies
 Research and development
 Education
 Human health care
Investment classifications under the
investment promotion act, (€ Million)
Investment classes A and B depending on the value, region and
sector allocation of the investment
Region or Sector
Class B
Class A
8 - 16
>16
In municipalities with unemployment rate
equal or more than the country average
4-8
>8
In high-tech activities in the manufacturing
industry for the whole country
4-8
>8
2.8 – 5.6
>5.6
General
In high-tech activities in the services,
computer technologies and R&D sectors
for the whole country
Incentives under the Investment Promotion
Act
 All classes (A&B)
 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 for the
needs of the investment project
 A class
 Individual administrative services
 Infrastructure support to the borders of the investment
project site
Priority Investment Projects
 No sector restrictions
 Council of Minister decision
Conditions:
 investment more than 50 Million Euro
 or investment in depressed regions
 or investment in High-Tech
 or investment in industrial zone construction
 Incentives
 VIP treatment
 Special Incentive Package
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 R&D 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)
 Up to 1 year minimum salary and reimbursement of social/health
care security for employing young people and disadvantaged
people through the Employment Agency
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
InvestBulgaria Agency
Sofia 1000, 31 Aksakov Str.
Phone: (+359 2) 985 5500
Fax: (+359 2) 980 1320
E-mail: [email protected]
Web: www.investbg.government.bg