Transcript bulgaria_-_general_presentation_april_2013

Bulgaria – investment climate and business
opportunities
April 2013
Macroeconomic indicators show consistent pre-crisis
economic growth and quick post-crisis recovery
Real GDP Growth
6.4%
6.5%
6.4%
Inflation (HICP)
Bulgaria
6.2%
0.4%
1.8%
EU-27
0.8%
Bulgaria
6.0%
7.4%
EU-27
12.0%
7.6%
2.5%
3.0%
3.4%
2009
2010
2011
2012
1,151
1,315
1,478
2010
2011
2012
2.4%
-5.5%
2005
2006
2007
2008
2009
2010
2011
2012
Bulgaria
9.1%
9.1%
6.9%
2005
2006
2007
2006
2007
2008
FDI Inflow
Unemployment
10.7%
2005
9.2%
EU-27
10.4% 11.4%
6.3%
2008
€ mln.
9,052
6,728
6,222
3,152
2009
Source: Bulgarian National Bank, Eurostat
2010
2011
2012
2005
2,437
2006
2007
2008
2009
FDI in Bulgaria comes mostly from EU countries and is
concentrated in four main sectors
FDI by host country, 1996-2012 (€ mln.)
​(1) Netherlands
FDI flows by industry, 1996-2012 (€ mln.)
6,601
(2) Austria
Real Estate
7,990
5,638
Finance
(3) Greece
7,604
3,576
(4) UK
2,606
(5) Germany
2,501
(6) Cyprus
2,317
(7) Russia
Manufacturing
6,750
Trade
6,698
Energy
3,522
1,658
Construction
(8) Hungary
1,332
(9) Switzerland
1,289
(10) Italy
1,287
Source: Bulgarian National Bank
Telecom
Other
2,891
2,209
2,915
Why invest in Bulgaria?
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Political and business stability
–
EU and NATO member
–
Currency board
–
Low budget deficit and government debt
Low cost of doing business
–
10% corporate tax rate
–
Lowest cost of labor within EU
Access to markets
–
European Union / EFTA
–
Russia
–
Turkey / Middle East
•
Educated and skilled workforce
•
Government incentives
Bulgaria enjoys one of the most stable political and
economic environments in Southeastern Europe
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Bulgaria is a member of some of the
most prestigious political organizations
–
European Union member since 2007
–
NATO member since 2004
–
WTO member since 1996
Strong commitment to political reform
and transparency has earned praise
from leading media and experts
worldwide
Stable currency
–
Bulgarian Lev has been pegged to the Euro
since the adoption of the currency in 2002
–
Currency board backed by IMF
„While governments across the eurozone periphery are on the ropes or
have been felled by the economic
crisis, Prime Minister Boyko
Borisov's government has drawn
international accolades for cutting
spending while maintaining high
levels of public support.”
September 10, 2011
Standard & Poor's ratings agency
raised its short-term foreign and local
currency sovereign credit ratings on
Bulgaria to 'A-2' from 'A-3' based on
its recently adopted methodology.
The agency also affirmed our 'BBB'
long-term foreign and local currency
sovereign credit ratings.The outlook
is stable.
August 10, 2012
Government financial indicators are remarkable not only
in the region, but on a pan-European scale
Average government debt (2006-2011)
130%
120%
Greece
Italy
110%
100%
Belgium
90%
80%
70%
60%
United Kingdom
Portugal
France
Iceland
Ireland
Poland
50%
Spain
40%
Hungary
Germany
Malta
Austria
Cyprus
Netherlands
Turkey
Croatia
Slovakia
Lithuania Slovenia Czech Republic
Latvia
Romania
30%
20%
Finland
Sweden
Norway
Denmark
Bulgaria
10%
Luxembourg
Estonia
0%
-11%
-10%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
15%
16%
Average budget deficit/surplus (2006-2011)
Source: Eurostat
Bulgarian economy maintains its excellent performance
despite global challenges
BG
Budget deficit for 2012, % of GDP
Egypt
Japan
United Kingdom
Spain
Greece
United States
India
Czech Republic
France
Netherlands
Poland
Denmark
Euro Area
Italy
Hungary
Austria
Brazil
Turkey
China
Sweden
Switzerland
Germany
Bulgaria was the only European country with
increased credit rating by Moody’s in 2010 and 2011
-10.9%
-9.8%
-8.3%
-8.0%
-7.0%
-7.0%
Estonia
-5.6%
-5.0%
-4.5%
Lithuania
-4.1%
-3.7%
Bulgaria
-3.6%
Hungary
-3.3%
Ireland
-3.0%
-2.8%
Turkey
-2.6%
-2.5%
-2.0%
-1.6%
0.0%
0.0%
0.1%
Greece
01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11
Source: Eurostat, The Economist, National Statistics
Page 7
Bulgaria has one of the lowest business costs in Europe
Lowest corporate income tax rate
in Europe
Bulgaria
Romania
Hungary
Slovakia
Czech Rep
Croatia
Turkey
Source: Eurostat; Savills
10%
Cost of electricity for industrial
users is 70% of the EU average
Estonia
0.065
Bulgaria
0.068
€/kWh,
2011
16%
19%
19%
19%
Romania
0.083
Turkey
0.083
Lowest cost of agricultural land
in the European Union
Bulgaria
1,595
Romania
2,000
Hungary
Greece
Germany
€ / ha,
2008
3,000
4,000
France
5,000
Czech Rep.
5,000
Poland
5,000
0.090
EU average
0.098
Hungary
0.100
Czech Rep
0.103
Germany
10,000
20%
20%
Slovakia
0.127
Spain
11,070
UK
11,400
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Bulgaria is only 3 hours flight from all major destinations
in Europe, Russia and the Mediterranean region
Strategic geographic location
Major transport corridors passing
through Bulgaria
The role of the European Union as a trade partner for
Bulgaria is significant
Share of EU-27 exports has increased
visibly since 1995
... in absolute terms EU-27 exports have
grown more than 7 times
+33%
13,000
12,000
€ mln
11,000
EU-27
44%
10,000
56%
60%
61%
58%
9,000
8,000
7,000
Balkans
16%
Asia
12%
6,000
5,000
21%
6%
Other
18%
16%
6%
9%
15%
15%
14%
10%
3,000
2,000
28%
16%
4,000
17%
1,000
0
1995
2000
2005
Source: National Institute of Statistics, Bulgaria
2010
2012
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Educated and skilled workforce is among the main
advantages of Bulgaria
Almost 60,000 students graduate every year from
over 50 universities
Business
19,480
Social sciences
Health
Architecture
Agriculture
14.2%
10.2%
8.3%
Bulgaria
3,677
5.8%
Greece
3,166
Austria
Law
17.8%
Slovakia
7,178
Education
Iceland
Ireland
8,372
Engineering
Bulgaria has one of the highest proportions of
students abroad from all European countries
4.7%
1,553
Germany
3.1%
EU-27 average
2.8%
833
860
Other
Source: National Institute of Statistics, Bulgaria
Romania
2.2%
Czech Republic
2.1%
12,684
Students in another EU
/ EEA country, % of all
The government supports specific industries under the
Investment Promotion Act (IPA)
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Investments must be related to the following sectors:
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Manufacturing
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Research & development
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Education
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Healthcare
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High-tech services
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Warehousing and logistics
Minimum investment amounts must exceed €2.5m
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€1m in regions with high unemployment and €0.5m for
investment projects in high-tech services
Benefits for certified investors include:
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Shortened administrative procedures
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Preferential acquisition of state or municipal land
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Financial support for professional training / education
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Infrastructure subsidies
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Labor cost subsidies
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Individual administrative services
Biggest investors are supported through a priority
investment scheme
•
Priority projects can be related to all sectors of the
economy, which do not contradict regulation 800/2008 of
the European Commission
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Subsidies not allowed in mining, primary agriculture
production, and shipbuilding
Priority projects should exceed €50m and create at least
200 new working places for a 3-year period
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€25m + 100 working places for certain manufacturing projects
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€10m + 50 working places for high-tech services and R&D
Priority projects receive all benefits for certified investors,
as well as the following:
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Lowest possible costs for the acquisition of government and
municipal land + waived taxes for land status changes
–
Working group for project support is assigned by the Council
of Ministers
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Financial grant scheme for up to 10% of the investment
project cost (50% for R&D)
Attractive FDI sectors
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Services:
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Transport and Logistics
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Information technologies
–
Outsourcing of business processes
–
Health and tourism related to healthy
lifestyle
Industry:
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Transport equipment and machine
building
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Electronics and Electrical engineering
–
Chemical industry
–
Food and Agriculture
Resources:
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Mining
–
Oil
–
Alternative energy
Leading global investors have chosen Bulgaria as an
FDI destination
IT & BPO
Mechanical and
Electrical
Engineering
Construction
Materials
Telecom and
Media
Energy
Finance
InvestBulgaria Agency
InvestBulgaria Agency is a Government investment
promotion arm, part of the Ministry of Economy,
Energy and Tourism
IBA services:
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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
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Liaison with central and local governments
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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