1. BULGARIA – THE NEW GATEWAY TO EUROPE AND ASIA
Ivailo Kalfin
Deputy Prime Minister аnd Minister оf Foreign Affairs
June, 2008

2. Integration and proximity of markets
Bulgaria is on the crossroad of the main Pan European Corridors 9 4 7 10 8
EU membership and the strategic geographic location of Bulgaria provide easy access to the leading regional and world markets

3. Why Bulgaria – Political Relations with USA
For over 100 years the Republic of Bulgaria and the United States of America have enjoyed diplomatic relations.
These relations are at their highest level since their establishment.
The high intensity of the political dialog is a proof of the strong partnership between Bulgaria and the United States of America.

4. Why Bulgaria – Political Relations with USA
Excellent political relations between Bulgaria and USA - reasons:
- Political stability due to Bulgaria's NATO membership /March 29th, 2004/ and the accession to the EU /January 1st, 2007/;
- Stable economic perspective and growing credit rating of Bulgaria and its institutions;
- Common positions on various international issues;

5. Why Bulgaria – Political Relations with USA
- Bulgaria and the United States of America stand together in the fight against terrorism;
- Bulgaria actively participates in military missions and has a close security partnership with the USA and other anti-terrorist coalition partners;
- Republic of Bulgaria demonstrates strong commitment to all international obligations;
- Bulgaria is a reliable and predictable partner in the international arena.

6. Why Bulgaria – Basic Economic Data
Stable economic environment
10 % corporate income tax (lowest in EU together with Cyprus); 0% for manufacturing companies in areas with high unemployment
10 % personal income tax, flat rate
The lowest operational costs in Europe
Well educated and highly skilled labour force
22% of population hold university degree
45,000 Bulgarian students in Europe. Second largest group after China
Governmental support to priority investment projects
Excellent climate, natural scenery, food and hospitality

7. Bulgaria is full of investment opportunities waiting to be discovered…
Business opportunities
Industries with rapid annual growth
Financial services
Consumer credit up by 31,8%, mortgages up by 75,4%
Media, Advertising, IT, Telecom (up by 20%)
Retail (up by 20%)
4th in Europe and 12th in world in the 2007 A.T. Kearney GRD Index
Real estate (up by 30%)
Pharma and healthcare (up by 50%)
Fragmented market
Opportunity for consolidation, M&A activities
Seed financing, start-ups
Excess and growing demand for early stage company financing
Opportunity for private equity funds
A.T. Kearney Global Retail Development Index results
Source: A.T. Kearney Global Retail Development Index; Global finance

8. …in its people Bulgaria has an invaluable asset
Well-educated and affordable labor force
2nd in the world in international IQ tests
47 universities with 32,000 students graduating every year:
28% with business related degrees
63% with IT related degrees
Good language literacy (English, German, French, Spanish and Russian)
Average monthly salary as low as 221 EUR
Legal minimum monthly wage in Bulgaria is 113 EUR
Source: PWC Bulgaria, The Sofia Echo, InvestBulgaria Agency – Value Scope Bulgaria, Sofica

9. Bulgaria’s improving infrastructure is enhanced by the access to the Black Sea
Good infrastructure
Access to the Black Sea and world oceans through its 2 large ports and 470 km of waterways
4 international airports, 131 paved airports and 4 heliports
7,300 km of railways and 20,000 km of roads
EU-backed investments into infrastructure development
Access to 9.3bn EUR in EU financing until 2013 (structural and cohesion funds, funds for rural development)
Three GSM operators and ADSL internet
Source: EBRD country factsheet, CIA The World Factbook, Wikipedia, InvestBulgaria Agency - Bulgaria Investment Guide 2007,

10. Bulgaria is growing at a rapid pace while keeping labor cost low ...
GDP growth comparison
Labor cost
Bulgaria’s accession into the EU will ensure long term sustainable GDP growth
Source: Bulgaria Investment Guide 2007, InvestBulgaria Agency, Eurostat

11. ... and its growth outperforms other countries in the entire European Union also in the long term
GDP growth forecast (2007 – 2009)
Industrial growth forecast1) (2007 – 2009)
GDP growth (%)
Industrial growth (%)
Bulgaria has a stable forecast for GDP and industrial growth
Notes: (1) Malta doesn’t provide information about industrial growth, year 2000 = 100%
Source: Eurostat

12. A lot has been achieved, our competitiveness is continuously improving
World Competitiveness Yearbook 2007 – overall position 41
World Competitiveness Yearbook 2008 – overall position 39 39 41
Source: IMD, Centre for democracy research
Due to significant improvement of performance, Bulgaria moves in two places up in the global list of competitiveness

13. Record inflow of FDI in 2006 & 2007, EUR m
Source: BNB, IBA

14. Bulgaria leads CEE countries in terms of FDI to GDP indicator
FDI to GDP, %, 2006 – 2007F
Source: Bank Austria Creditanstalt

15. FDI stock by sectors, 1998 – 2007, EUR m
21%
19%
19%
17% 7% 6% 6% 5%
Source: BNB, IBA

16. FDI stock by country,1996-2007, %, EUR m
Austria
the Netherlands
Greece
Un. Kingdom
Belgium &
Luxemburg
15%
3662.6
11%
2687.2
10%
2404.5 9%
2140.4 5%
1349.3
Germany
Cyprus
USA
Hungary
Italy
1227.3
1199.1 4%
1029.1
950.2
923.6
Source: BNB, IBA

17. Top Foreign Manufacturing Investors (between $24 & $580 m)
Sector
Solvey (Belgium)
Chemistry
Lukoil (Russia, Netherlands)
Refinery & Petrochemicals production
Cumerio (Belgium, Netherlands)
Copper smelting
Miroglio (Italy, Germany)
Textile
Sise Cam (Turkey)
Glass Industry
Heidelberger Zement (Germany)
Cement Industry
Viohalco (Greece)
Metal products
Liebher Hausgeraete (Germany)
Refrigerators
Carlsberg (Denmark)
Brewery
EPIQ (Belgium)
Electronics

18. Top US Investors in Bulgaria
real estate
BULGARIAN-AMERICAN PROPERTY MANAGEMENT
BULGARIAN-AMERICAN PROPERTY
MANAGEMENT (26)
packaging industry
ALKOA PACKAGING BULGARIA
ALKOA (30) IT
HP-Bulgaria
HP (52)
cable TV
EUROCOM CABLE
SOROS FUNDS (15)
television
BTV
NEWS INC (23)
restaurants
McDonalds BULGARIA
McDonalds (23)
tobacco
SOCOTAB BULGARIA
SOCOTAB (26)
food industry
KRAFT FOODS BULGARIA
KRAFT FOODS (36)
hotel
HILTON SOFIA
HILTON INTERNATIONAL (40)
banking
BULGARIAN-AMERICAN CREDIT
BANK, USA
BULGARIAN-AMERICAN ENTERPRISE FUND (94)
finance
POSHTENSKA BANKA
ALICO/CEN (111)
plumbing, sanitations
IDEAL STANDARD, VIDIMA
AMERICAN STANDARD (240)
telecommunications
BTK AD
(ADVENT INTERNATIONAL) through VIVA
VENTURES (433)
energy
TEZ MARITZA EAST 1
AES (1 400)*
Activity
Bulgarian company
Investor/investment amount USD mln.
*Project under implementation
Source: InvestBulgaria Agency

19. Sufficient acquisition of the EU funds is another important priority for stimulating the economy
OP “Development of the Competitiveness”
OP “Human Resources Development”
ОP “Transport"
OP “Environment"
ОP “Regional Development"
OP “Administrative Capacity"
OP “Technical Assistance"
The Ministry of Economy and Energy runs Operational Program “Competitiveness”
with a Budget of EUR 1.2 billion
Priority 1: Economic development based on knowledge and
innovation activities (budget – EUR 246 million or 21%)
Priority 2: Increasing production efficiency and development of
favorable business environment (budget – EUR 593 million or 51%)
Priority 3: Provision of financial resources for business development (budget – EUR 200 million or 17%)
Priority 4: Strengthening of the Bulgarian economy's position in
international markets (budget – EUR 87 million or 7.5%)
Technical support (budget – EUR 34 million or 3%)
Considerable financial support for SMEs

20. The list of foreign companies in Bulgaria is growing quickly!
Global companies are gaining insight in advantages of doing business in Bulgaria
Examples of those who already have discovered their opportunity in Bulgaria
“Very well educated, talented and committed workforce, large talent pool, very competitive cost structure, European culture, good English skills, short flight times and almost no time difference from Western Europe…” - Dr. Peter Kurpic, Senior Vice President NetWeaver Foundation SAP AG
“The combination of existing and proven local expertise, the excellent academic facilities and the strength of the Bulgarian economy, made Sofia an ideal choice for further investment in our global mixed-signal engineering capabilities.” – Nelly Pergoot, Managing Director, AMI Semiconductor (USA)
YOUR LOGO HERE
“Political and economic stability, the qualified labor force and the cost structure” – Gilles Bernard, Executive Director of EPIQ (Belgium)
“…among the reasons why HP had chosen Bulgaria were the high level of education in terms of technical skills and languages, good infrastructure and investor-friendly legislation.“ – Tino Canegrati, HP Global Delivery General Manager
The list of foreign companies in Bulgaria is growing quickly!
Source: InvestBulgaria Agency – Bulgaria Investment Guide 2007, ValueScope Bulgaria,

21. THANK YOU FOR YOUR ATTENTION!
IVAILO KALFIN
Deputy Prime Minister and Minister of Foreign Affairs