Economic Overview & Business Opportunities
Bulgaria, a country located in the southern part of Europe, is the 105th largest country in the world and the 15th largest country in Europe with a population of around 7.9 million people. Bulgaria sits strategically at the crossroad between the Black Sea and the Danube river, providing the easy access to nearby markets like the European Union (which is equivalent to a market of 500 million consumers), Russia, Middle East, and North Africa.
The Bulgarian Economy
As a former communist country, Bulgarian economy is an open economy with strong economic growth. Bulgaria is one of the members of World Trade Organization (WTO) since 1996 and NATO since 2004, and it became part of EU in 2007. The trade alliance showcases Bulgaria’s good standing in international trade. It is currently one of the newest member countries in EU with emerging economy. Though Bulgaria’s GDP is among the lowest in EU, the economic outlook is always positive. In fact, the lower-than-average GDP translates into growth potential for international business and opportunities. The Bulgarian economy relies heavily on sectors in energy, mining, metallurgy, machine building, agriculture and tourism, as well as IT & ICT, as well as telecommunications.
Why Invest in Bulgaria?
According to the latest World Bank annual rating, Bulgaria ranked impressively at 50 (among 190 economies) in the ease of doing business. Apart from the good ranking in the ease of doing business, Bulgaria’s stable political and economic environments in South eastern Europe have played a crucial part that draws the foreign investors into the country.
Strategic location always translates into business opportunities. Bulgaria’s strategic location on the map makes it a springboard to enter the large neighbouring markets like Europe, the Middle East, Russia, as well as the former Soviet Republics. Besides, Bulgaria’s good location has its geo-strategic significance in terms of communication and transport links.
Low Tax Rate
The low tax rate in the country makes Bulgaria one of the investment hotspots in the region. Bulgaria has the most favourable tax regime within the EU with its corporate profit tax and personal income tax both stand at a flat rate of 10%. In addition to this, the VAT rate in Bulgaria is 20% while the dividend taxation rate is 5%. Last but not least, Bulgaria has signed Double Taxation Treaties with 70 countries across the globe where the advantage of double tax avoidance has increased the country’s competitiveness to attract foreign investors.
In summary, the low tax rate regime looks like this:
- Corporate profit tax 10%
- Personal income tax 10%
- VAT 20%
- Dividend tax rate 5%
Robust Business Environment
The government-backed business environment is the key to the favourable investment climate in Bulgaria. The Bulgarian government welcomes foreign investors with its attractive policies:
- No general limits on foreign ownership,
- No restrictions imposed of foreign investment in Bulgaria,
Other advantages include:
- Less red tape and simplified administrative procedures
- Financial aid for professional training
- Infrastructure subsidies
- Administrative services support
Strong and emerging Bulgarian Market
The attractive tax regime, government-supported business environment, as well as strategic location have all contributed to the strong economic growth in Bulgaria. Besides, well-trained human resource and low operating costs in Bulgaria are the drivers behind its thriving economy. Many foreign investors see Bulgaria as the hidden gem in EU in terms of investment climate and ease of doing business.
On a final note, if you are expanding your business and you wish to gain a foothold in EU, Bulgaria could the right place for you to start your international business.
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