1. Bulgaria – investment climate and business opportunities

2. Bulgaria – geographic location
Strategic geographic location in South-East Europe
Offers direct access to markets like: EU, Russia, Turkey and The Middle East
5 Pan-European transport corridors pass through Bulgaria
EU and EFTA
Russia and CIS
Turkey and Middle East
Offers direct access to markets like: EU, Russia, Turkey and The Middle East
This is already mentioned in the slide before.

3. Why invest in Bulgaria? Political and business stability
EU member
Currency board
Low budget deficit and government debt
Low cost of doing business
10% corporate tax rate (0% in high unemployment areas)
10% personal income tax
Lowest cost of labor within EU
Favorable office rents and low cost of utilities
Access to markets
European Union / EFTA
Russia
Turkey / Middle East
Educated and skilled workforce
Government incentives
No need to mention NATO

4. Macroeconomic indicators2
Real GDP Growth
Inflation (HICP)
Bulgarian
EU-28
Bulgarian
EU-28 2%
0.4%
2007
2008
2009
2010
2011
2012
2013
2014*
2007
2008
2009
2010
2011
2012
2013
2014*
*December
*December
Unemployment
FDI Inflow
Bulgarian
EU-28
€ mln.
9,052
10.3%
6,728
5.6%
2,437
1,151
1,330
1,141
1,275
1,181
2007
2008
2009
2010
2011
2012
2013
2014
2007
2008
2009
2010
2011
2012
2013
2014*
*Preliminary data
Source: Bulgarian National Bank, Eurostat, NSI

5. FDI in Bulgaria comes mostly from EU countries and is concentrated in four main sectors
FDI by host country, (€ mln.)
FDI flows by industry, (€ mln.)
(1) Netherlands
7147.6
Real Estate
7923.5
(2) Austria
5941.9
Finance
7686.3
(3) Greece
3504.5
Manufacturing
7584.7
(4) UK
2549.0
(5) Germany
2497.8
Trade
6875.5
(6) Cyprus
2107.4
Energy
3897.2
(7) Russia
2019.7
Construction
2995.4
(8) Switzerland
1555.2
Telecom
2062.5
(9) USA
1468.2
(10) Italy
1410.3
Other
4396.6
Source: Bulgarian National Bank

6. Government financial indicators
Government financial indicators
Average government debt ( )
Greece
Italy
Belgium
Portugal
Iceland
France
Ireland
Hungary
Germany
United Kingdom
Malta
Austria
Cyprus
Netherlands
Spain
Poland
Turkey
Slovakia
Denmark
Sweden
Latvia
Czech Republic
Finland
Norway
Slovenia
Romania
Croatia
Lithuania
Bulgaria
Luxembourg
Estonia
-13%
-12%
-11%
-7%
-6%
-5%
-4%
-3%
-2%
-1% 0% 1%
15%
Average budget deficit/surplus ( )
Source: Eurostat

7. Bulgaria’s credit rating 2014
Country credit ratings comparison 2014
Country
S&P Rating
Moody's rating
Fitch Rating
TE Rating*
Czech Republic
AA-
Stable A1 A+ 80
Poland A- A2 69
Italy
BBB-
Baa2
BBB+ 60
Negative
Bulgaria
BB+ 53
Spain
BBB
Positive
Croatia BB
Ba1
48.85
Macedonia
BB- 45
Romania
Baa3 51
Turkey
Hungary
Serbia B+ 36
Ukraine
CCC-
Caa3
CCC 16
*The TE credit rating is driven by a model created at Trading Economics.
Source: Trading Economics Rating

8. The lowest taxes in EU Country comparison
Income Tax (%)
Social Security (%)
VAT (%)
Corporate
Individual
Employer
Employee
Bulgaria(*) 10
17,9-18,5
12,9 20
Serbia 15
10-20
16,9
Romania 16
28,45
16,5 24
Hungary
10/19
28,5
18,5 27
Czech Rep. 19 22 34 11 21
Poland
18/32
22,14
13,7 23
Turkey
15-35 18
Slovakia
19-25
34,8
13,4 UK
0-45
13.8 12
Italy
27,5
23-43 30
Spain
24,75-52
29,9
6,35
Germany
30-33
(effective)
14-45
19,7
20,6
France
33,33
5,5-41 50
19,60
(*) means anything?
Source: Worldwide-tax

9. Bulgaria has one of the lowest business costs in Europe.
Bulgaria has one of the lowest business costs in Europe
Gas prices for industrial users in Europe
Electricity prices for industrial users in Europe
€/Gigajoule, 2014
€/kWh, 2014
Czech Republic
Bulgaria
Bulgaria
Estonia
Poland
Germany
Austria
Turkey
Italy
Romania
EU average
Hungary
Spain
EU average
France
Czech Rep
Germany
Slovakia
Source: Eurostat

10. Salaries in Bulgaria S Average salary by position, EUR per month
Labour cost / Salary
% of the Gross Salary
Top Management
Management
R&D Engineers
Technicians
Skilled labor
Unskilled labor
In EUR, per month
Low
High
Net Salary Employee
77,1%
924
1925
576
770
539
693
347
462
285
385
216
270
Gross Salary Employee
100%
1200
2500
750
1000
700
900
450
600
370
500
280
350
Total Cost for Company
117,9%
1415
2948
884
1179
825
1061
531
707
436
590
330
413
Average gross salary by region, EUR per month
Statistical region
North-West
North Central
North-East
South-East
South-West
South Central
September 2014
347
350
383
378
501
356
Source: IBA Analysis, National Statistics Institute

11. (‘Bachelor’, ‘Master’, ‘Doctor’)
Students in Bulgaria by narrow field of education in universities and colleges in 2013/14 academic year
Business and administration
67113
Engineering and engineering trades
Social and behavioural science
Health
Teacher training and education science
Humanities
Law
Personal services
Computing
Architecture and building
Agriculture, forestry and aquacultures
What is “Personal services”?
Manufacturing and processing
Physical and chemical sciences
Mathematics and statistics
A big number of students study in universities in Europe and USA
TOTAL:
(‘Bachelor’, ‘Master’, ‘Doctor’)
Source: National Statistics Institute

12. Number of universities in some of the biggest cities3
Bulgaria has highly-qualified, well-motivated, flexible and multilingual labour force
53 Universities, colleges and higher schools
494 Vocational gymnasiums and colleges
80000 Bulgarian students in foreign countries
24,6% Population hold university degree
7% Workforce has engineering degrees
45,5% Population speak at least one foreign language
85% Students studied English
Number of universities in some of the biggest cities
Blagoevgrad
Veliko Tarnovo
Burgas
Varna 1 2
Total number of higher schools* 53
Universities and equivalent higher schools 45
Colleges 29
Independent colleges 8
Colleges, at the universities and equivalent higher schools 21
*Incl. universities and equivalent higher schools and independent colleges
Plovdiv 1 2
Sofia 6 3
Technical sciences
Business field
Other
Source: National Statistics Institute

13. The government supports specific industries under the Investment Promotion Act (IPA)
Investments must be related to the following sectors:
Manufacturing
Research & development
Education
Healthcare
High-tech services
Warehousing and logistics
Minimum investment amounts must exceed €2.5m
€1m in regions with high unemployment and €0.5m for investment projects in high-tech services
Benefits for certified investors include:
Shortened administrative procedures
Preferential acquisition of state or municipal land
Financial support for professional training / education
Infrastructure subsidies
Labor cost subsidies
Individual administrative services

14. 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
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
€25m working places for certain manufacturing projects
€10m + 50 working places for high-tech services and R&D
Priority projects receive all benefits for certified investors, as well as the following:
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
Financial grant scheme for up to 10% of the investment project cost (50% for R&D)

15. Attractive FDI sectors
Services:
Transport and Logistics
Information technologies
Outsourcing of business processes
Health and tourism related to healthy lifestyle
Industry:
Transport equipment and machine building
Electronics and Electrical engineering
Chemical industry
Food and Agriculture
Resources:
Mineral water
Tourism
Balneology
Alternative energy

16. Leading global investors have chosen Bulgaria
IT development
Back office operations
Chemical and metal Industry
Engineering
Food

17. Invest Bulgaria Agency
InvestBulgaria Agency is a 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 14

18. InvestBulgaria Agency
Sofia 1000, 31 Aksakov Str.
Phone: (+359 2)
Fax: (+359 2)
Web: