Bulgarian policy clears a path for investment

Bulgaria’s legal framework and government policy is structured to actively attract foreign investment capital through a wide variety of incentives. The country is a member of the EU, although not of the euro zone. As a positive sign for business, in 2011 – a time of global financial crisis – the Bulgarian government adopted a long-term e-government strategy for 2011–2015, providing for a series of costly legislative reforms that should enable companies and individuals to have better, faster and more secure access to a great number of online administrative services (the Commercial Registry, Patent Office, Special Pledges Registry, Central Depository, Cadastre Registry, Land Registry, etc.) through a simple electronic signature.

Statutory incentives

The Investment Promotion Act encourages foreign investment in the industrial sector, the services sector and other areas of the local economy. Under the act, the Bulgarian Investment Agency can issue a general investment certificate, class A or class B, to any investor, depending on a minimum level of investment, which varies from sector to sector. The minimum investment for class A certificate eligibility applies to high-tech activities in the services sector, where at least 4 million lev (US$2.7 million) are required, while a minimum of 2 million lev are needed for a class B certificate. Each certificate corresponds to a different package of incentives.

In addition, an investment could qualify as a priority investment project (PIP) – a project significant for Bulgaria’s national or regional economic development. Investments in PIPs offer even greater incentives. General investment certificates provide for: administrative services obtained from central and local authorities in shorter periods than the statutory ones; acquisition of state or municipal property without tender on a market price assessment; and financial support considered on a case-by-case basis for the construction of public infrastructure (roads, water supply and sewerage), for employee training and professional qualifications, and other expenditures.

Tzvetoslav Mitev is an attorney-at-law at Georgiev Todorov & Co Law Offices in Sofia, Bulgaria. He can be contacted at +359 2 937 65 41 or by email at tzvetoslav.mitev@georg-tod.com