Bulgaria foreign Investments incentives
Bulgaria attempts to encourage investments from foreign residents.
-Political and economic stability.
-Membership of important organizations such as NATO since 2002 and Bulgaria is expected to join the EU in 2007.
-Labor costs that are considerably lower than European standard costs. The average gross monthly wage for September 2005 was Euro 167.
-An highly proficient work force in all that is connected with hi-tech.
-47 agreements with other countries to promote and protect foreign investment.
-Among other companies that have invested in Bulgaria, are Microsoft, Siemens, IBM and Carlsberg.
Restrictions on Foreign Ownership
As a general rule, there is no discrimination in Bulgaria between overseas investors and local investors. Nevertheless, there are restrictions in certain areas.
Real estate may be purchased by an individual who is a foreign resident only on setting up a company in Bulgaria.
Special permission must be obtained from the Council of Ministers in Bulgaria on the purchase of real estate in border areas or in areas that are defined as being of high security priority.
Overseas investors may obtain a concession in regard to projects that are carried out on municipally owned property such as water supply, drainage, road paving, etc. The concession is usually for a period of 15 years, and in any case, not for more than 25 years.
INCENTIVES FOR OVERSEAS INVESTORS
Companies that are connected with investments in production, subject to the terms specified in law, are exempt from corporation tax. For this purpose, the companies must meet the following requirements:
- All the property of the company making the investment must be located in areas in which the unemployment rate exceeded the national average in the preceding year by 50%.
- At least 80% of the employees must be residents of the municipal area described in the previous paragraph.
- In the year in which the tax incentives are payable to the company, the company must have no debts in regard to its employees' social security.
- The tax incentives for companies are contingent on the amount of tax saved being re-invested in the purchase of equipment or payment of wages.
- Exemption from corporation tax is for a period of 5 years, even during the years that the municipality within whose border the company is located is excluded from the list of municipalities recognized as centers of unemployment.
Free Trade Zones (FTZ)
Bulgaria has 6 free trade zones. All the zones are located at strategic transport hubs to facilitate speedy transportation to international trade routes to neighboring countries.
Free trade zones are located at the ports of Vidin and Ruse. Another FTZ is located on the Bulgarian - Serbian border and one on the Turkish - Bulgarian border and another in the Plovdiv region. Plovdic is the second largest city in Bulgaria and has an independent airport. The sixth FTZ is situated at Burgas beside the largest Bulgarian Black Sea port.
Activities in a FTZ include, among others, convenient currency exchange, the possibility of transferring profits overseas without restrictions, and an organizational structure that negates the need for the investor having to conduct negotiations through the local authority