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BULGARIA OFFERS INVESTORS A WINNING STRATEGY
AHEAD OF EU MEMBERSHIP 2007
WE HAVE SEVERAL OBJECTIVES, BUT ONE FOCUS.PRIVATE INVESTMENT.Our economic growth reflects our continued progress against key
objectives. We continue to reform our legal and regulatory frame-
work consistent with good governance, both public and private. . . to
reduce overhead associated with establishing and running a busi-
ness. . . to encourage development of capital markets and financial
institutions important to business expansion, particularly among
small and medium enterprises. . . to invest in infrastructure. . . to pro-
mote as unquestioned the rule of law in commercial disputes.
We know that for Bulgaria to grow, investors must succeed here.
We share that goal.
Lidia Shouleva
Deputy Prime Minister, Minister of Economy
MAKING THE RIGHT MOVES AT THE RIGHT TIME
EXPECTED IN 2004.
In the next decade, we expect gas distribution to grow from a total of 2,000 consumers
currently to literally 800,000 after seven distribution companies are privatized. Each com-
pany should bring between BGN 70-80 million when privatized this year.
Obviously, this is huge in terms of growth and opportunity. Plus, Bulgaria’s regulatory
commission is moving faster than any of its counterparts in the region. That alone is a
very positive statement for Bulgaria’s solid legal framework ahead of investment."Jake Delphia, Pierce Atwood, Attorneys-at-law
Energy Regulatory Development in Bulgaria
FFaacctt.. In 2004, Bulgaria will begin rehabilitation of Maritsa Iztok Thermal Power Plant 2
following award of a EUR 226 million contract to Mitsui and Toshiba. The project is
financed by the Japan Bank for International Cooperation (JBIC) with a credit of up to
EUR 196.8 million. (See page 33)
FFaacctt.. Standard & Poor’s issued a BB rating for Maritsa Iztok Thermal Power Plant 2 long
term corporate credit, the first company in Bulgaria’s energy sector to be rated. The rating
reflects the risk of a single-asset plant undergoing major upgrade, indebtness, interest rate,
and foreign exchange exposure, competitive position, and strategic importance. Bulgaria’s
current rating is BB-.
Source: Standard & Poor’s & Sofia Morning News
“
Where ROI is king.
WELCOME.
As a potential investor, we hope you will find Invest Bulgaria 2004 useful either as an
update or an introduction as you begin your due diligence. As your "one stop shop" for
information and service, our agency has one aim: to assist you start-to-finish.
A new Investment Encouragement Law passed in 2004 streamlines our assistance several
ways. We can assist with obtaining licenses and permits. We can perform cost-benefit
analyses to determine those investments which, based on economic value-added, qualify
for infrastructure and site acquisition aid. This brochure provides a summary of the law
and our website (www.bfia.org) provides other details.
And, should there be any doubt about Bulgaria as an investment location in Europe,
it's that highlighted area on the map where ROI is king.
We hope you will contact us.
Sincerely,
Invest Bulgaria Agency
UPDATE: In March 2004, Bulgaria joined NATO.In June 2004, Bulgaria closed its final EU negotiation chapter. Source: Invest Bulgaria Agency
Profile 2004 4
Bulgaria’s Economic Growth paces South East Europe. Why? 7
A Perspective... 18
EU Convergence 25
The Business Base 30
In the Company of Leaders 39
One-stop-shop 41
Directory 42
CONTENTS:
The more critical
the investor in
assigning values
for political stability,
business climate,
and experienced
skill base, industry
specific or unique
requirements, the
more sense Bulgaria
makes as a place
to do business
in Europe.
I n v e s t BG 2 0 0 4
p a g e
5
Prof i le 2004
A BASELINE & A WINDOW
Strategic investors considering the European
Union (EU) as a location or potential site for
expansion may do well to shortlist Bulgaria as
they evaluate options. Why? In a word, oppor-
tunity. Bulgaria's strong economic perform-
ance made 2003 both a “best ever" and a “break through"
year. Economic indicators, progress versus commitments
ahead of its planned EU accession in 2007, a continually
improving “business climate" – a new investor's law being a
primary example – plus, potential investors in the “pipeline,"
all suggest Bulgaria's robust growth will continue into
2004 and beyond.
Bulgaria's monetary and fiscal policy, macroeconomic and
political stability, functioning free-market economy, priva-
tized financial sector, favorable tax rates, laws governing
intellectual property, contracts and bankruptcy, flexible
labor laws and competitive wage rates all have contributed
to a quantifiable and qualitatively improved business climate.
CCoommbbiinnaattiioonn ooff ffaaccttoorrss.. The combination of high growth, low inflation, stable currency, low interest rate, price and
wage stability, low tax rates, low budget deficit – sets Bulgaria apart from neighboring states in Central and South East
Europe as a low risk, high return location.
As well, as part of their due diligence, investors repeatedly have found Bulgaria's well developed knowledge- and tech-
nological skill base comparable to, and compatible with their own.
Bulgaria also “makes it easy" for investors to do business, starting with an improved “one-stop-shop." Investors will find
professional counterparts each with business and specific industry experience as their point of contact, along with oppor-
tunities to discuss issues with a team of experts – from technical and business backgrounds – recruited especially for them,
case-by-case. The point of contact for such services is the Invest Bulgaria Agency (http://www.bfia.org).
On January 13, 2004, Sisecam,
a Turkish producer of flat glass, announced
a $160 million project to build two plants
in Targovishte. The plants are the largest
single greenfield project to date in Bulgaria.
When complete, the plants will employ
700 people. Sisecam produces approximately
three percent of the world's flat glass.
Source: Invest Bulgaria Agency
Evaluationinvited.
DID
YOU
KNOW?
p a g e
6
I n v e s t BG 2 0 0 4
The government's top level support for investors is driven by continuing feedback provided by businesses and interna-
tional organizations. Responses include, for example, a new investment law effective in 2004 and training for the judi-
ciary in important technicalities of commercial law. Efforts to simplify procedures and eliminate redundancy and cost
associated with compliance, continue to produce results – for example, a reduction of some 33 percent of licensing and
cost “overhead" – a fact confirmed by independent evaluations of international agencies. There are many other exam-
ples, some covered here.
RReettuurrnn oonn iinnvveessttmmeenntt.. The more critical the investor in assigning values for political stability, business climate, and
experienced skill base, industry specific or unique requirements, the more sense Bulgaria makes as a place to do business
in Europe as confirmed by continuing, recent trends.
EBRD FOCUS: POST-PRIVATIZATION, 'GREENFIELD' INVESTMENTS,CREDIT LINES.
The European Bank for Reconstruction & Development (EBRD) continues to be Bulgaria’s biggest investor. In 2003, EBRD
invested EUR 240 million, a record following EUR 182 million the previous year, also a record.
In 2004, the Bank’s total, cumulative investments since 1991 will top EUR 1 billion with another record year “likely”. Already
in March 2004, the Bank announced EUR 50 million in loans for Bulgaria’s energy sector on top of loans of EUR 258 mil-
lion to the sector previously. Also in 2004, the Bank will secure funding for EUR 40 million in credit lines available to small
and medium enterprises through commercial banks.
The Bank’s country strategy continues a focus on “greenfield” industry projects, tourism, agribusiness, and natural resources.
The Bank also will support non-bank financial services related to pension reform, private insurance markets, leasing and
mortgage financing.
Finally, the Bank will continue its co-financing roles, both as a commercial lender and donor related to environmental
and social components of projects in association with the International Monetary Fund (IMF), World Bank and European
Commission.
Bulgaria Profile 2000 2001 2002 2003 2004E
GDP (USD bn) 12.6 13.6 15.5 19.9 23.9Real GDP growth (%) 5.0 3.0 5.0 4.3 5.0Unemployment rate 18.1 17.9 16.3 13.5 n.a.Budget deficit (% GDP) -1.0 -0.9 -0.7 0.0 -0.7Forex reserves (USD bn) 3.5 3.6 4.7 5.2P 5.8FDI (USD m) 1,002 813 905 1,419 1,600
P – Preliminary, E — Estimate
SSoouurrcceess:: Bulgarian National Bank (BNB), National Statistical Institute (NSI), Employment Agency (EA), Agency for Economic Analyses & Forecasts (AEAF), Invest Bulgaria Agency (IBA), The Economist Intelligence Unit.
The combination of
factors- high growth,
low inflation, stable
currency, low inter-
est rate, price levels,
low tax rates, low
budget deficit - helps
to set Bulgaria apart
from neighboring
states in Central and
South East Europe.
I n v e s t BG 2 0 0 4
p a g e
8
FFiissccaall && MMoonneettaarryy PPoolliiccyy. With some modest analysis, apparent “turnarounds” often reveal themselves for what they
really are – long term trends which, in turn, begin with solid policy and tough decisions. In 2003, Bulgaria's economy
continued to track with its target of 4.5 percent average annual growth. In contrast, the Eurozone grew at 0.4 percent.
Bulgaria owes its progress to sound monetary and fiscal policies in effect since 1997. A currency board, a fixed exchange
rate, and conservative fiscal policy have led to steady economic growth and a declining government deficit, creating a
business climate conducive to private investments. In 2003, government deficit-to-Gross Domestic Product (GDP) ratio
was 0.0 percent. Other indicators suggest fundamental and continuing macroeconomic strength and stability.
Bulgaria already has met all of the Maastricht criteria, the prerequisite necessary to be included in the Eurozone.
Source: Bank Austria Creditanstalt
Forget “economic booms” because they are followed by
“economic busts”. We focus on policies to sustain
long-term growth.
Our fixed exchange rate and low budget deficit remain
key to sustaining our six year, 4.5 percent average annual
growth with low-and-stable inflation."Kalin Hristov
Economic Advisor, Bulgarian National Bank
WHAT
THEY
SAY
Average monthly inflation 2002-2003
Factor Price change (%)
Consumer price inflation 2.3Foodstuffs -0.9Non-foods 1Food/Entertainment 3.5Services 8.7
SSoouurrcceess:: National Statistical Institute (NSI)
“
I n v e s t BG 2 0 0 4
BULGARIA'S ECONOMIC GROWTH PACES SOUTH EAST EUROPE.
LLooww aanndd ssttaabbllee iinnffllaattiioonn.. One of Bulgaria's
success stories has been its stable currency. The
Bulgarian lev has been pegged to the Euro since
1997, obviously, with a zero fluctuation in terms
of exchange rates. By comparison, neighboring
states have experienced fluctuations ranging from
100 percent to 250 percent during the same period.
In 2003, Bulgaria's average inflation rate was
2.3 percent. By comparison, South East Europe
neighboring states ranged from a high in
Romania of 15.3 percent to a low in Croatia of
1.5 percent (Source: Eurostat). In 2003, the aver-
age wage was USD 170 per month, with real
wage projections expected to increase by less
than two percent in 2004 (Source: AEAF).
p a g e
9
Bulgaria 's economic growth paces South East Europe
INTEREST RATES.
TTrreennddiinngg ddoowwnn.. The pattern of interest rates reflects the usual seasonal swings and other “one off" influences.
For example, given that money demand for transaction purposes is usually high at the end of the year, commercial banks
therefore tend to maintain their liquidity at a higher than average level, with a resulting upward spike. Or, a major investor
launches a project in Bulgaria, arranges a deal with a commercial bank, and the size of that deal and the likelihood of
favorable interest rate negotiated will create a downward spike – reflecting the size of the deal to the market overall.
Such influences create a “bounce" in the trend line, but long term data confirm continuing decline in interest rates,
reflecting the monetary and fiscal policy which has guided Bulgaria's recovery since 1997, increasing competition fol-
lowing the successful privatization of the banking sector, and the number and growth of commercial banks responding
to market opportunity.
1998 19997
8
9
10
11
12
13
14
15
16
2000 2001 2002 2003
Interest rate on credit in BGNTrend
GDP BY SECTOR: INDUSTRY LEADS EU-ACCESSION COUNTRIES, SERVICES EMERGE.
In 2003, Bulgaria's strong industrial sector registered 7.1 percent growth in sales overall, and 15 percent growth in produc-
tion, leading to overall GDP growth of 4.3 percent. At the same time, the services sector continued steady growth at 3.5
percent, and now accounts for more than 58 percent of GDP.
As recently as 1998, the service sector accounted for barely five percent of GDP, leading economists from the Agency for
Economic Analyses & Forecasts to conclude that Bulgaria's “transition economy" is evolving quickly, following a pattern
associated with “sophisticated" and “developed" economies which are typically dominated by the services sector. The data
also indirectly support as well the EU conclusion that Bulgaria's is a “full functioning free market economy."
Interest rate
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10
I n v e s t BG 2 0 0 4
Exports of both products and services grew in real terms by
nearly nine percent. Important for the future, certain sub-
sectors continued their individual recoveries, the latest
being the turnaround of the mining sub-sector. Nearly
dormant previously, the mining sector (metal ores) jumped
12.5 percent from December 2003 to January 2004 princi-
pally as a result of new gold ore discoveries.
Finance and trade remained strong, continuing the sector's trend of 20 percent annual growth. Only weak agricultural
performance due to a poor harvest and curtailed energy exports to Turkey resulted in modest declines, respectively
2.7 percent in the third quarter 2003, posted in the agricultural-forestry, and one percent, posted in the transport and com-
munications sector.
Increasing wages and new jobs – more than 307,000 new jobs created, with nearly 40 percent of those previously
categorized as “long-term" unemployed – led to a strong consumer demand for credit and continued expansion within
financial services sector. Many of the new jobs, however, mark successful government programs to move long term
unemployed back into the workforce, suggesting that the market for wage rates remains stable in certain labor categories,
even as demand for products and services – reflecting the newly employed – grows.
… The annual growth of Bulgaria's industrial output is the highest among EU accession candidate countries”.
Source: NSI
NOTE
THAT. . .
“
1.8
1.81.8
1.7
3.1
3.84.2
3.5
7.88.6
9.0
6.9
Gross value added by year, EUR billion
Industry, share of subsectors, % 2002 Services, share of subsectors, % 2002
Agriculture
Real estate 2017
16
10
9
8
7
5
5
5
4
Food processing
Electricity, gas and water
Metals
Chemical industry
Textiles, apparel, leather
Mechanical engineering
Mining and quarrying
Wood processing, paper
Electrical engineering
Building materials
18
18
11
9
5
5
5
4
Trade and repair
Transport
Public administration
Communication
Health andsocial work
Education
FinancialIntermediation
Hotels andrestaurants
Industry
Services
GDP BY SECTOR, BY VALUE ADDED.(gross output = gross value added + intermediate consumption)
Source: NSI
200120022003
2000
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Bulgaria 's economic growth paces South East Europe
GDP PER CAPITA: INDICATIVE OF GROWTH POTENTIAL.
Even as Bulgaria's economy continues to shift toward services at an increasing rate, indicative of an economy growing
in sophistication, Bulgaria’s costs remain below the EU. Bulgaria's service sector grew at rate of 3.5 percent in 2003, and
now accounts for 58.6 percent of GDP, up from 3.5 percent in 1998. Yet, Bulgaria's $2,538 per capita GDP remains only
30 percent of the EU, leading to the conclusion that Bulgaria currently offers a major growth opportunity and attractive
return on investment.
OUTLOOK 2004: BUSINESS CLIMATE INDICATOR REGISTERS 7 PERCENT GAIN.
Bulgaria's aggregate business climate indicator rose by seven percent from 2002 to 2003. The indicator is a broad meas-
ure of business sentiment and covers all sectors. Of all components of the aggregate index, only retail trade was off by
a slight 1.7 percent.
2001 2002 2003
80 12
12 03 06 09 12 03 06 09 12
14
16
18
20
22
24
26
28
90
100
110
120
130
140
Index of industrial sales (average level of sales for 2000=1000)Business climate, with a 3-month lag (right-hand scale)
Industrial sales index and business climate
Source: NSI, AEAF
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I n v e s t BG 2 0 0 4
TAX REVENUE: COMPLIANCE, COLLECTION PROGRESS RE-ESTABLISH BASELINE.
Trend data for 2003 show a steady increase in tax revenue as the central government collections and compliance con-
tinued to improve. As of November 2003, year-to-year overall tax revenues had increased by 25 percent despite a 31 per-
cent decrease in non-tax revenue. Revenue from custom duties increased by more than 12 percent, from excise duties
by nearly 16 percent, and from value-added tax (VAT) by nearly 28 percent. Corporate tax revenue rose by 271 percent
to BGN 49.2 million reflecting progress with collections from 2002. According to the Bulgarian National Bank, the suc-
cess with both compliance and collections overall will allow the government to meet revenue targets even with the
planned decrease in the corporate income tax to 15 percent. The debt/target GDP ratio at the end of November 2003 was
estimated at 48 percent.
1996 1997 1998 1999 2000 2001 2002 2003
350
400
450
500
550
600
650
700
750
06 12 06 12 06 12 06 12 06 12 06 12 06 12 06 12
Registered unemployedRegistered unemployed (seasonally adjusted data)
Number of registered unemployed
Thousand End of month
Source: EA, AEAF
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Bulgaria 's economic growth paces South East Europe
CURRENT ACCOUNT: FOREIGN CURRENCY RESERVES INCREASE.
The foreign currency reserves rose by an adjusted EUR 796 million by the end of the period, compared to the end
of 2002. Exports through October 2003 increased 11 percent to EUR 5,601 million compared to the same period 2002.
Revenues from tourism increased by EUR 25.9 million to EUR 1,305.8 million compared to 2002, offsetting an increase
in imports of more than 16 percent to EUR 7.215 million.
According to Bulgarian National Bank estimates, the combined
effect of crude oil, petroleum products and natural gas prices, and
the exchange rate resulted in a decrease of the trade balance deficit
for the period by EUR 47.1 million, and of the current account
deficit by EUR 50.5 million. The revenue deficit (estimated at EUR
409.1 million, up by EUR 155.3 million compared to 2002) led to a
decline in current account performance.
INVESTOR PERSPECTIVE: STABLE, CONVERTIBLE CURRENCYA HEDGE AGAINST RISK.
Bulgaria's currency pegged to the Euro and its macroeconomic stability in combination effectively provide investors with
a built-in hedge against exchange rate risk. In 2003, investors in other EU accession countries with less stable curren-
cies effectively suffered a profit squeeze as increasing deficits have weakened those currencies. Investors then faced the
problem of covering the difference by maintaining prices at a cost of reduced profit, or raising prices with possible loss
of market share. Either way, investors lost. Not so if, as in Bulgaria, the hedge is effectively built into a stable currency
pegged to the Euro.
The Bulgarian lev (BGN) is internally
convertible and is pegged to the Euro
at the rate of BGN 1 per EUR 0.51129.
NOTE
THAT. . .
1998 19993
4
5
6
7
8
9
10
11
2000 2001 2002 2003
International reserves, BGN billion
International reserves
Bulgaria imposes no constraints on hard currency trading. Local banks can sell hard currency to physical and legal entities
without limitation. Central exchange rates are quoted daily by the Bulgarian National Bank (BNB) for statistical and account-
ing purposes only.
CAPITAL MARKETS: SOFIX CLIMBS 148 PERCENT, ON-LINE TRADINGINTRODUCED.
RReeccoorrdd ggaaiinnss.. In 2003, Bulgaria's market capitalization increased nearly 99 percent to BNG 2.73 billion. At the same time,
the Bulgaria Stock Exchange-Sofia gained 148 percent on trading volume of 688,000 shares, a 121 percent increase from
2002. The SOFIX index and volume reflected the underlying strength of the economy, and likely as well, new financial mar-
ket regulatory changes and on-line trading, both introduced in March 2003.
MMaarrcchh ffoorrwwaarrdd.. In March 2003, a new law combined previously dispersed regulatory authorities into a single, new
Financial Supervision Commission (FSC) with sufficient legal guarantees to function independently. In the process, the new
law established the basis for simplified reporting intended to save administrative time and cost associated with compliance,
for example, when a single company offers different types of financial products.
The new FSC is charged with protecting investor interests,
promoting market development, regulating issue of securi-
ties, monitoring transactions, as well as supervising invest-
ment companies - including private pension funds and insu-
rance companies. The central bank, of course, continues to
regulate and supervise the banking sector to preserve the
distinction between the banking and non-banking financial
institutions. The new law creating the FSC prohibits chal-
lenges to its rulings through the judicial court system, and
thereby, provides a strong, sound regulatory framework nec-
essary to support investment. The strength of the new law
is evidence of the government's commitments in support of
change supporting its functioning free market.
In March 2003, International Accounting Standards became obligatory for all institutions in the banking sector and other
financial companies traded on the Bulgaria Stock Exchange-Sofia. Beginning 2005, all of Bulgaria's companies must com-
ply with this standard.
Finally, in March 2003, the exchange introduced real-time trading using the Internet. Using the new Client Order-Book
Online System (COBOS), clients or stock exchange members can trade securities, eliminating the need for a direct link to bro-
kers. As a result, trades can be placed from literally anywhere.
EEqquuiittiieess.. According to Bulgarian Stock Exchange - Sofia, in 2003, Bulgaria's equity market showed a consistent increase
and balanced growth as measured across a broad range of indicators: market leaders included Petrol (energy), Sopharma
(pharmaceuticals), Albena (tourist ventures), and Bulgartabac (tobacco).
p a g e
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I n v e s t BG 2 0 0 4
The new law creating the FSC prohibits challengesto its ruling through the judicial court system, andthereby, provides a strong, sound regulatory frame-work necessary to support investment.
...the new law simplifies reporting, saving bothtime and cost associated with compliance, forexample, when a single company offers differenttypes of financial products.
NOTE
THAT. . .
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Bulgaria 's economic growth paces South East Europe
BBoonnddss.. In 2003, the bond market includ-
ing official, unofficial and block trades, rose
to BGN 68 million, a sharp increase from
2002, yet still only a small fraction of the
activity on the equity market. To date, most
companies launch bond issues through a
private placement, then register the issue
with the exchange. This allows the bonds to
be traded on the secondary market, adds to
market liquidity, and allows the companies
to avoid the expense and complexity of
launching an issue through the exchange.
Following the success achieved in macroeconomic stabilization, the main challenge now facing Bulgaria is to implement furtherreforms in the enterprise and banking sectors."European Bank for Reconstruction & DevelopmentBulgaria Investment Profile 2001
While Bulgaria has privatized fully its banking sector and
isolated it completely from government intervention, other
countries…still require significant reform of the sector."Getting Incentives Right, Getting Perceptions RightAgenda for Civil Society in South East Europe
THEN. . .
NOW. . .
“
PRIVATIZATION: PROGRESS IN 2003, POTENTIAL IN 2004.
Bulgaria continues its progress toward private sector development through the sale of state enterprises. Important recent
privatizations include:
IN 2003The Hungary-based OTP Bank bought 100 percent of the shares of the third largest Bulgarian bank DSK for
EUR 311 million. With the DSK sale, Bulgaria's banking sector is completely privatized.
IN EARLY 2004Viva Ventures, a Special Purpose Vehicle (SPV) of a US private equity fund, bought 65 percent of Bulgarian
Telecommunications Company (BTC), the fixed-line telecommunications operator, for EUR 280 million.
The terms of sale provide for an additional investment of EUR 700 million during the next five years.
The Supervisory Board of Bulgartabac appointed Morgan Stanley as a consultant to advise on its offer of
Bulgartabac, the state tobacco company. Morgan Stanley will recommend a strategy for restructuring and
sale of several companies separately.
The government had received indicative bids for seven electricity distribution companies, with the objective
to privatize 67 percent of the share capital of each.
NNeeeedd ffoorr ssppeeeedd.. Although Bulgaria had divested 83 percent of its holdings of previously state-owned companies dur-
ing the past 10 years, until 2003 privatization remained a “cumbersome process”. As a consequence, the state remained a
minority shareholder or partner in nearly 1,600 companies. The government's objective is to sell the state's remaining
shares in the 1,600 companies as quickly as possible.
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I n v e s t BG 2 0 0 4
In 2003, share sales through the Bulgarian Stock Exchange-Sofia replaced the “cumbersome process” of tenders and com-
petitive bidding procedures with one that was both quick and transparent. As of early 2004, nearly 400 transactions had
taken place on the exchange, compared to 260 for all of 2003.
According to the Privatization & Post Privatization Act, all state-owned companies, with some exceptions, will be con-
sidered with open privatization procedures. The exceptions include regional utility companies, airports, seaports, free trade
zones, Bulgarian Post, NPP Kozlodui, Bulgargas, and the Bulgarian Stock Exchange-Sofia.
MMaajjoorr ccoommppaanniieess scheduled for privatization in 2004 include:
Seven electric distribution companies
Bulgaria Air - the national flag carrier
Balkankar Holding, machinery engineering
Bulgarian Commercial Fleet (Marine)
Bulgarian River Shipping
Bulgartabac
VMZ (defense)
Kinteks (defense)
Teraton (defense)
IN 2004: NEW EQUITY, PENSION REFORMS ADD TO MARKETCAPITALIZATION.
According to the Agency for Economic Analyses & Forecasts, continued privatizations will add an estimated BGN 511.4
million in new equity to the market by the end of 2004. The new equity plus pension fund reforms already passed, will
likely lead to new investment and long term stability as fund managers and individuals respond to new opportunities
to invest. New pension reforms include: 1) a basic free-to-all state system, paid for through compulsory contributions,
2) a mandatory privately managed second tier, and 3) a voluntary third tier funded by additional contributions. More
than a dozen private, specialty firms manage pension fund portfolios. Analysts predict assets of the three types of pen-
sion funds to grow from a current, relatively small capitalization of BGN 250 million to two percent of GDP by the end
of 2004.
FUNCTIONING FREE-MARKET.
In its 2002 report, the European Commission assessed Bulgaria as a “functioning market economy" with a high degree of
macroeconomic stability and working market mechanisms. Bulgaria imposes no constraints on transfer of profits, royal-
ties or fees, or on repatriation of invested capital.
CREDIT RATINGS.
Standard & Poor's BBB-/A-3 (stable outlook)
Fitch BB+ (positive outlook)
Moody's Ba2 (stable outlook)
Japan Credit Rating Agency BBB- (stable outlook)
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Bulgaria 's economic growth paces South East Europe
MANY POLITICAL PARTIES, ONE ECONOMIC POLICY: 'CONSERVATIVE GROWTH'.
Good policies and good governance, have turned Bulgaria from its self-administered shock therapy a short five years ago to
a solid performer. Now, based on the usual indicators cited here, Bulgaria arguably can offer investors South East Europe's
best current and future opportunity.
Although politics may always color debate, the politics of economics creates its own agreement among Bulgaria's political
factions. EU accession dictates meeting a set of pre-requisites and, in turn, commitment to supporting actions as the way
forward, looping back around in a “virtuous circle" promoting change. Seven years after initiating its reforms, Bulgaria has
a direction and a track record of meeting its commitments. In 2003, Bulgaria recorded its strongest macroeconomic per-
formance to date.
A currency board remains a national policy and the guiding mechanism for Bulgaria's own sound monetary policy fully sup-
ported by the IMF.
A conservative fiscal policy produced a zero deficit as a percent of GDP in 2003. Based on current projections, Bulgaria will
improve on that performance in 2004. Bulgaria has installed 1) a “spending buffer" so as not to exceed 2.5 percent of GDP,
2) a “stabilizer" so as to spend 90 percent of its budget in first three quarters of a fiscal year, and finally,
3) a “shock absorber" of 0.6 percent of GDP as a contingency fund.
Current law places tight limits on public debt, and fiscal reserve management actively aims at optimal levels of risk,
liquidity and yield. In 1998, Bulgaria's debt as a percent of GDP stood at 83 percent compared to 48 percent in 2003.
At the same time, Bulgaria has enjoyed several rating upgrades, easing its access to international capital markets.
With a share of nearly 28 percent of Foreign Direct Investment (FDI), Hungary ranked first among the
countries investing in Bulgaria for the period January-November 2003, followed by Greece with nearly
16 percent and Switzerland with nearly 15 percent.
Source: Agency for Economic Analyses & Forecasts
UK's Melrose Resources PLC projects a substantial increase in 2004 revenue following its first natural
gas produced from Bulgarian fields beginning late in the first quarter.
Source: Robert Adair, chairman, Melrose Resources PLC,
Sofia Morning News
Standard & Poor's issued a BB rating for Maritsa Iztok Thermal Power Plant 2 long term corporate credit,
the first company in Bulgaria's energy sector to be so rated. The rating reflects the risk of a single-asset
plant undergoing major upgrade, indebtedness, interest rate, and foreign exchange exposure, competitive
position, and strategic importance. Bulgaria's current rating is BB+.
Source: Standard & Poor's & Sofia Morning News
DID
YOU
KNOW?
One thing is sure.
For investors
already here,
Bulgaria emerged
from their “due
diligence" as a
“best fit" for its
combination of
factors supporting
their successful
business strategy.
I n v e s t BG 2 0 0 4
I n 2003, of Bulgaria's nearly $1.4 billion FDI – an increase of more than 57 percent from 2002 – $1 billion occurred with-
out the benefit of a major privatization. On a basis of FDI per capita estimates, Bulgaria ranked second in South East
Europe, at $181 per capita versus Croatia at $266, and well ahead of Hungary ($74 per capita), Romania ($76 per capita),
and Serbia and Montenegro ($121 per capita). This, in a year when FDI was down 21 percent globally, following a decline
of 41 percent in 2001. Economists often regard FDI per capita as an important indicator of labor quality and productivity.
By comparison, Central and Eastern Europe
increased FDI by 15 percent. The European
Union accounts for 70 percent of Bulgaria's
FDI, with industry accounting for 43.6 per-
cent of the EU total, followed by finance
(18.7 percent) and trade (16 percent).
Most new investors have been drawn to
Bulgaria for the same shared reasons – to
protect or grow market share, deliver new
products, reduce costs, stretch R&D budgets,
and most important for knowledge-based
industry, find quality, new talent.
Nonetheless, it's best for investors to say
“why" on an individual basis, and by sector.
In response to a phone call or an e-mail, the
Invest Bulgaria Agency (IBA) can put together a profile, by specialty, of representative investors already here, part of IBA's
“one-stop-shop" portfolio of investor services.
One thing is sure. For investors already here, Bulgaria emerged from their “due diligence" as a “best fit" for its combi-
nation of factors supporting their successful business strategy. The likely combination of factors? Starting with the
basics, consider what apparently diverse investors have in common.
Recent investments vary from plants producing precision automotive parts to electronic components, to development cen-
ters for “firewall" Internet software used by international banks for transmission of financial data. They represent a trend
toward “niche," “high quality," and “leading edge" types of products each within their industry. What do they have in
common? Investors' assessments of two important factors.
p a g e
19
A perspect ive . . .
The 2000 FDI inflow was almost equally divided between privatization projects and greenfield investment. The largest investment in 2000 was made in the financial sector when the country's largest bank, Bulbank, was privatized."
Source: Bank Austria Creditanstalt
Of the total $6.7 billion in Foreign Direct Investment
(FDI) in Bulgaria since 1992, $2.9 billion or 43 percent
has occurred since 2001, and of that total, $864 million
occurred in the first in the first three quarters of 2003.
Source: Invest Bulgaria Agency
THEN. . .
NOW. . .
WHY DID FDI JUMP 57 PERCENT IN ONE YEAR? LOW RISK, HIGH RETURN, EASY ACCESS TO EU
“
p a g e
20
I n v e s t BG 2 0 0 4
Bulgaria's knowledge-and-skill base ranks with Europe's and the world's best
for its technology, math, engineering and specialized science strengths.FIRST:
KNOWLEDGE BASE
Investors are attracted by Bulgaria's knowledge base. Bulgaria:
Placed 1st in Tokyo math Olympics (2003)
Won two gold medals in the US IT Olympics (2003)
Finished 1st and 2nd among 40 teams participating
in South East Europe's International Collegiate
Programming Contest (2003)
SSoouurrccee:: Romanian Chapter, Association for Computing Machinery
Bulgarian secondary education is among the best in the world.
Bulgaria ranks:
2nd in world based on Scholastic Aptitude Test
scores of secondary school students
4th for literacy, elementary students,
(after Sweden, Netherlands, UK)
5th in the world in sciences
11th in mathematics
SSoouurrcceess:: World Bank, The Economist, World Literacy Survey
Bulgaria has 39 universities, 25 colleges, 460 secondary, vocational and technical schools in a country with
a population of less than 8 million.
More than 45 percent of Bulgarians can take part in a conversation in one of the major European languages.
More than 15 percent of Bulgarians have higher degrees, ranking third in the Europe.
Many study abroad: nearly 3,000 Bulgarians are currently enrolled in technical universities in Germany alone.
On an annual basis, Bulgaria's universities and colleges produce more than:
2,000 graduates with computer science degrees
700 graduates with communications technology degrees
5,000 graduates with engineering degrees
Bulgaria employs more than 20,000 professionals in the IT sector and ranks third in world for certified
IT professionals per capita, eighth in the world in terms of absolute numbers.
Top 10 Brainbench certified countries, 2002(number of certified professionals per 10,000 inhabitants),www.brainbench.com
8.2
5.8
4.0
3.6
3.4
1.7
1.2
1.1
0.9
0.3
Bulgaria
Canada
Australia
Romania
United Kingdom
Ukraine
Russian Federation
India
Pakistan
United States
Those companies, for example, that chose
Bulgaria as a location to produce “preci-
sion components" for demanding applica-
tions such as aircraft radar and Formula 1
race cars, or to develop “leading edge soft-
ware," or to manufacture "high quality"
products, stress their need for “technical
due diligence." Most often, this occurs
face-to-face, when investors turn “talent
scouts" looking past technical capability to
“technical closure" for the genuine article.
p a g e
21
A perspect ive . . .
BUSINESS CLIMATE UPDATE FOR 2004
New investor law guarantees all investors the same rights and protections
Substantial asset discount prior to EU membership
10 day VAT refund for major investor companies
VAT exemption for imports of investment projects over $5 million
30 percent annual depreciation for machinery and equipment
Free trade opportunities with market access to 560 million consumers, located in EU, EFTA,
CEFTA countries, Macedonia, Turkey, Estonia, Lithuania, Israel
Adoption of International Accounting Standards
Zero percent capital gains tax
Zero percent interest gains tax
Removal of 20 percent of licensing, permit and registration regimes
33 percent of licenses simplified
Reduced corruption: tied at 54th with Czech Republic among 133 countries ranked
by Transparency International
What's a test for technical creativity ahead of problem solving? If you ask a software developer in Bulgaria about 'fuzzy logic,' most would respond, ‘Okay, what do you want to know,' based on their strong math backgrounds. In many places, they wouldn't have a clue as to what that is".
Peter Statev
Chairman of the Board, EES Telecom Consortium
Any competent technology professional can perform tasks when
these are defined. Where we see value is in the ability to tran-
scend the task, and to think innovatively and creatively in terms
of new product development".
George Brashnarov, General Manager, Nemetschek OOD Bulgaria
WHAT
THEY
SAY
“
“
Investors response to opportunities they identified and Bulgaria's “business climate"
made 2003 a “best ever" year for Bulgaria based on foreign direct investment.
A “business climate update" (See below) provides a quick take on some of the key
changes already in place and planned to take effect in early 2004. These changes,
the current “pipeline” of interested investors, and the beginning of a worldwide
economic recovery, suggests the continuing strength of this trend.
SECOND:
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22
I n v e s t BG 2 0 0 4
CREDIT AVAILABLE: BANK COMPETITION, DEMAND LEAD TO LOAN 'BOOMLET'.
A casual take on the Bulgaria banking sector confirms the positive impressions of business persons on the receiv-
ing end of newly competitive banks, aggressively seeking new customers. As recently as two years ago, loans and
credit difficult to obtain today come with free services and rebates packaged as “business leader" services.
Consumers receive the promise of a five-day turnaround for mortgages in a “cozy Retail Lending Center," and those
who want to borrow on deposits can receive “flash credit" with disbursement in one working day.
Statistics confirm the impression. In 2003, for example, Bulbank added 40,000 customers to its base, and increased
its loan portfolio by 56 percent. In early 2004, the bank announced the purchase of a leasing company with a focus
on lease and lease-purchase of production and construction equipment, and agricultural equipment. The company
will establish a separate entity for auto leasing.
The best way to attract investors is to improve theoverall business environment and infrastructure."Source: Piritta Sorsa, IMF Resident Representative
Bulgaria, March 2003
As a strategic investor, UniCredito Italiano considersBulgaria an important platform for deploying itsstrategy in New Europe."Bulbank, Unicredit Group
WHAT
THEY
SAY
“
“
1991
0
200
400
600
800
1000
1200
1400
1600
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Non-privatization
Privatization
Foreign Direct Investment, million USD
p a g e
23
A perspect ive . . .
DSK Bank, as of 2003 a unit of OTP (Hungary), and Bulgaria's largest bank, reported a loan portfolio of BGN 1.245 million,
up more than 31 percent for the year, with consumer loans accounting for two-thirds of the total. In 2004, the bank fore-
casts an increase of 50 percent for its corporate credit portfolio, and 30 percent for individual credit accounts, for a com-
bined total increase of BGN 1.3 billion. The bank has announced its intention to roll out one new product per month in
2004.
The theme repeats among Bulgaria's other banking leaders. United Bulgarian Bank nearly doubled its loans based from 2001
to 2002. Postbank had tripled its loans to BGN 494 million in less than three years through September 2003. First Investbank
reported a loan increase of 69 percent in loans from 2002 to 2003 to nearly BGN 595 million (unaudited).
In 2004, Raiffeisenbank will partner with the European Investment Bank extending EUR 20 million in loans to small-and-
medium enterprises with a focus on industry, environmental protection, tourism, and infrastructure.
IN EUROPE: LOWEST CORPORATE TAX RATE, NO CAPITAL GAINSTAX, VAT CONCESSIONS, LOW PERSONAL INCOME TAX.
Bulgaria's current income and corporate tax rates continue to be the most competitive in Central and Eastern Europe. In 2005,
the already low, current corporate tax rate of 19.5 percent will decrease again to 15 percent. Currently, it is zero percent in
areas of high unemployment. Manufacturing companies located in regions of high unemployment receive a corporate tax
exemption for five years. The municipality tax has been repealed.
In 2003, consistent with its policy to decrease the overall tax burden on business, the government accelerated the deprecia-
tion norms for most assets. The ICT sector benefits from a preferential amortization regime for computer and software prod-
ucts. VAT refund period is three months, and for exporters, 45 days. Companies, realizing within a two-year period invest-
ment projects over BGN 10 million that create over 50 new jobs, are exempt from VAT on their imports.
There are four personal income tax brackets: 12 percent, 22 percent, 26 percent, and the highest, 29 percent.
FLEXIBLE LABOR LAWS: WORKING TO THE INVESTOR'S ADVANTAGE.
Based on World Bank indices, Bulgaria offers more flexibility regarding labor regulations than other countries in the region
as well as, on average, OECD countries. Factors measured include availability of part time and fixed term contracts, work-
ing time requirements, minimum wage laws and minimum conditions of employment. The government is actively engaged
in preparing new legislation to reducing the costs associated with hiring and firing.
COMPARING LOW COSTS: HIGH VALUE MATTERS MORE?
According to Eurostat and JP Morgan, Bulgaria's labor costs are less than 10 percent of the European Union level. At the
same time, productivity growth is well above both the EU and other EU-accession countries, according to Bulgaria's Agency
for Economic Analyses & Forecasts. As every investor knows, in time the gap will close, but never completely given the idea
of “value added."
p a g e
24
I n v e s t BG 2 0 0 4
Bulgaria Eastern Europeaverage*
Corruption Index 2003 (10 = lowest corruption) 3.9 4.0Business start-up: Number of procedures 10 9Duration (days) 30 74USD Cost 148 1343Unemployment rate 2003 E, % 12.9 12.7Average gross monthly salary (Oct 03), EUR 145 468
* Includes Czech Republic, Poland, Slovakia, HungarySSoouurrcceess:: Transparency International, World Bank, The Economist Intelligence Unit, national banks & investment promotion agencies
WHAT
THEY
SAY
“
“
“
Business "Market basket" October 2003, in USD equivalents
Gross monthly salary, average, 170Employer paid social security, unemployment, health care, as % of monthly salary 32.2%Office rent, Sofia center, per sq m/month 3.5–18Office purchase price, Sofia center, per sq m 470–1,300Cost in 2002, average, per sq m:Industrial construction 200–240Office building construction 260–330International phone call from Bulgaria per 1 min, VAT not included 0.18-0.50Electricity, industrial use, (1 kV - 60 kV), per kWh including VATPeak 0.082Day 0.050Night 0.032Motor fuel, VAT included, average, June 2003Gasoline (per liter) 0.72-0.91Diesel (per liter) 0.63
SSoouurrccee:: IInnvveesstt Bulgaria Agency
Investors who value cost saving more highly than skill can go many places other than Bulgaria. Cost saving isn't the
point. Adding value to a low cost, high skill base, is. Bulgaria's advantage comes in the spread between component
costs and value added when products and services are priced at global market rates. The challenge to investors is
leveraging this advantage with an appropriate business model."Pavel Ezekiev, Chairman Invest Bulgaria Agency
…(in Bulgaria) there have been perceptible improvements in standards of corporate transparency, with increasing
numbers of companies producing financial reports to international standards".
Source: Financial Times, October 14, 2003
Bulgaria achieved its 2003 goals against its top five SEE priorities, all vital growth of private investment".
Source: The South East Europe (SEE) Compact for Reform, Investment, Integrity & Growth (The Compact)
Bulgaria has passed
a number of amend-
ments to the civil
code procedure
which are related
to the enforcement
of civil judgments,
including acceler-
ated collection of
credit by empower-
ing the bailiffs to
seize assets.
I n v e s t BG 2 0 0 4
p a g e
26
I n v e s t BG 2 0 0 4
TThhrreeee ggooaallss iiddeennttiiffiieedd,, tthhrreeee ggooaallss aacchhiieevveedd..Bulgaria shares a top ranking for achieving its targets in
2003, effectively “keeping pace with its own pace" for change.
Among its top three priorities, Bulgaria in 2003
Adapted a uniform corporate tax rate and revoked its
municipal tax. Effective 2004, the corporate tax rate is 19.5
percent, and in 2005, is again reduced to15 percent
Improved its civil code and judiciary system by enact-
ing amendments to several laws and procedures
Amended several laws and the Commercial Law
The EU Commission report for 2003 assessed Bulgaria's
economy capable “in the near future" to manage EU com-
petitive pressure. Compared to Bulgaria's 87 percent closure
rate, one neighboring state had achieved a 63 percent clo-
sure, and five others held steady at zero percent. The
Commission expects Bulgaria and Romania to sign a joint
agreement for accession in 2005.
EU CONVERGENCE: PROGRESS ECLIPSES PROMISES.
In 2004, Bulgaria expects to close its remaining four chapters, namely, agriculture, competition policy, regional policy,
and finance and budget.
RReessuullttss ccoonnffiirrmmeedd.. The countries of South East Europe have joined in an effort to introduce reforms leading to invest-
ment as a basis not only for their individual accessions to the European Union, but to secure regional future economic
and social stability. The Organization for Economic Co-operation and Development (OECD) representing 17 European
countries plus Japan and the US support and finance the Compact. The standards and timetable for progress have been
set by the SEE countries themselves.
Through its monitoring instruments, the Compact reports progress of SEE states. The standards provide incentives for
countries to maintain their own pace with their regional partners. SEE countries have more to gain individually if the
region as a whole can achieve its goals – similar to the success of the EU model itself.
…One of the key concerns of private investors
across the region…(is) the need to develop
a well-defined and stable legal framework,
which includes the possibility to obtain court
decisions on civil code cases within a reason-
able period of time, followed by effective
enforcement".
Bulgaria has passed a number of amendments
to the civil code procedure, related to the
enforcement of civil judgments, including
accelerated collection of credit by empowering
the bailiffs to seize assets".
Source: Progress in Policy Reform in South EastEurope. Monitoring Investment Report,March 2003
NOTE
THAT
. . .
“
“
p a g e
27
EU Convergence
MMeessssaaggee ffoorr iinnvveessttoorrss.. As monitored by the Compact, Bulgaria's performance has been impressive in terms of con-
tinuing macroeconomic strengths, and in terms of qualitative gains in areas key to future economic growth, particularly
legal, regulatory, and pre-accession compliance with EU standards. As a byproduct, these same monitoring instruments
provide investors a convenient, independent, quantifiable assessment of Bulgaria's progress against recognized standards
as a factor ahead of their own due diligence and analysis of options.
NEW: INVESTMENT ENCOURAGEMENT LAW PROVIDES EQUALTREATMENT FOR FOREIGN AND DOMESTIC INVESTORS.
IInnvveessttmmeenntt.. A new investment law passed in 2004 extends to foreign investors the same rights, protections, and guar-
antees accorded domestic investors. Bulgaria's message to foreign investors is simple: they receive equal access to all
forms of economic activity and can rely on rule of law, impartially adjudicated, to decide commercial
disputes, as supported by Bulgaria's recent record.
According to the new law, investments of more than EUR 50 million are eligible for free state or municipal land and infra-
structure, as well as administrative and other support. The law specifies the level of assistance by level of investment,
starting with level one, large-scale investments of EUR 50 million or more; level two, EUR 25 million - EUR 50 million;
and level three, EUR 5 million - EUR 25 million.
Foreign investors receive the same access as any domestic investor in any business activity, including participation in sale
of public assets or tenders, acquisition of shares, debentures, treasury bonds and other kinds of securities, assurance of
intellectual and real property rights, and sanctity of contracts.
BByy ttrreeaattyy,, bbyy llaaww.. When Bulgaria's international treaties offer foreign investors more favorable terms and conditions,
then these terms take precedence over applicable local rules. The law also provides guarantees against adverse changes,
and protection against expropriation.
Bulgaria's Law on Obligations and Contracts allows creditors to seek performance plus damages for non-performance.
Bulgaria's Civil Procedure Code also allows for resolution of disputes in an arbitration court abroad if one of the parties
resides in another country. Bulgaria's Law on International Commercial Arbitration provides for settlement of civil prop-
erty disputes arising from foreign economic relations through international arbitration when one of the parties is a legal
resident of a foreign country.
Indeed, the establishment of the South East Europe Free Trade Area is well
in progress. (By mid-2003), this will mean a free trade area of 55 million
people with access as well to European markets."
… there are good examples of reform advancing. Bulgaria introduced
legislative changes concerning anti-trust and state aid laws as required
under EC accession negotiations."Source: The Compact
NOTE
THAT
. . .
“
“
p a g e
28
I n v e s t BG 2 0 0 4
NEW: LAW ON RESTRAINT REDUCES LICENSES, ELIMINATES 'BUREAUCRATIC DISCRETION'.
RReegguullaattoorryy RReeffoorrmm.. In June 2003, Bulgaria passed the Law on Restraint of Administrative Regulation and Control of
Business Activities and thereby reduced the potential for regulatory abuse at all levels of government.
The new law effectively eliminates bureaucratic discretion in the granting of applications for routine economic activities,
and provides for “silent consent" if the government has not acted upon an application in the allowed time.
In addition, the new law reduces the number of licenses, sets up permit and certification regimes, and requires that gov-
ernment at all levels must demonstrate good reason to impose any regulation affecting business.
“Good reasons" are limited to national security, environmental protection or personal and material rights of citizens. Any
regulatory authority must take into account compliance costs, and no national level law can be passed without an eco-
nomic impact analysis over a regulated activity.
IN LEGAL HARMONY: INTELLECTUAL PROPERTY PROTECTIONSPROMOTE INNOVATION, SECURE FREE MOVEMENT OF COMMODITIES.
Bulgaria's current laws comply with the main conventions, agreements, and treaties as administered by the World
Intellectual Property Organization. As well, Bulgaria is a member of the European Patent Convention and of the
Agreement on Trade Related Aspects of the Intellectual Property Rights (TRIPS Agreement) and as of 2003, was compliant
with nearly all provisions of current EU intellectual property legislation.
Key provisions include the principle of equal protection and non-discrimination to all citizens and non-citizens.
Important references include:
Patent Law (1993, amended 2002)
Law on Protection of New Plant Varieties & Animal Breeds (1997)
Law on Trademarks and Geographic Indications (1999)
Law on Industrial Design (1999)
Law on Topography of Integrated Circuits (1999)
COMING IN 2005: LAW ON AGRICULTURAL LAND WOULD EXTENDOWNERSHIP TO FOREIGNERS.
A new agricultural land law to be considered in 2005 would extend ownership rights to foreign investors. Currently,
foreign investors need to partner with a Bulgarian owner regarding sale of agricultural land.
p a g e
29
EU Convergence
E-QUIPPED. E-GOVERNMENT INFRASTRUCTURE SUPPORTS ACCESS,PROVIDES PROTECTIONS, MEETS EU STANDARDS.
Bulgaria is currently rolling out a national optical cable network to link all state and local administrations. Already a
secure, transactional portal provides business and individuals with access for information and services.
As a result of the portal, the government introduced new services including change of address notification, electronic
access to company social records, access to company registration data, social security installments for individuals, all with
access provided through issued "smart cards." More than 20 other new services will be rolled out through 2005.
The e-government changes implement recently passed laws including the Access to Public Information Act (2000), the
Electronic Document and Digital Signature Act (2001) and the Personal Data Protection Act (2002).
An IInnffoorrmmaattiioonn && CCoommmmuunniiccaattiioonn TTeecchhnnoollooggiieess DDeevveellooppmmeenntt AAggeennccyy serves as the government's focal point for the gov-
ernment's own e-initiative, as well as an interface with private initiatives to support coherent strategic planning, invest-
ment, and related policy to foster information and communication technology (ICT) growth.
In 2004, a CCoonnssuullttaattiivvee CCoouunncciill ffoorr IICCTT DDeevveellooppmmeenntt, a public-private council, will contribute to a draft law for high-end
technological parks and activities, strategy for providing broadband Internet access, as well as national strategy for the
development of an information society. In the past, major projects have included: telecenters, the John Atanasoff Virtual
University Computing Department, the Regional Center of the European Software Institute, as well as a National Research
& Education Network.
Among Bulgaria's ISO 9000 certified companies, ICT companies rank fourth. IT and “high-technology sectors" (electrical
and optical equipment, communications, engineering services) together account for almost one-third of all of Bulgaria's
ISO 9000 certified companies.
Sector with biggest numberof companies certified
176
139
953
637
108
95
86
74
74
66
51
46
Machinery
Metal Products
IT
Trade
Building
Food & Beverage
Other Services
Transport, Comm.
Engineering Services
El. & Optical Equip.
Number of companiescertified
451
259
127
82
42
10
4
1
2002
2001
2000
1999
1998
1997
1996
1995
1994
2003
Bulgaria has become
a technology cre-
ative base of choice
for investors looking
for the hard-to-find
combination of
technical expertise,
innovation, univer-
sal language skills,
and project closure
which represents
start-to-finish,
"leading edge"
development.
I n v e s t BG 2 0 0 4
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31
The Business Base . . .
THE BUSINESS BASE: ICT.
BULGARIA EMERGES AS A PREFERRED KNOWLEDGE AND SKILL BASE FOR LEADING EDGE ICT PRODUCT DEVELOPMENT, SYSTEMS INTEGRATION, PROJECTS AND OUTSOURCING.
AAss tthhee wwoorrlldd ttuurrnnss.. The “time-to-market" need to generate products and solutions is changing the way ICT compa-
nies think and work, leading, in turn, to a corollary need to manage "seamless research" and product development.
This need to “manage the clock" such that “like talent” works continuously toward the “time-to-market" objective pres-
ents a new challenge for how companies compete and maintain their profit margins. In short, often it's less about dis-
placement, more about complementary staff, chosen for their unique capability to meet needs, that defines market nich-
es, and is often less about “mass market” and more about a comparative “right few”. Bulgaria can already demonstrate its
case for offering a “right few” when that's what the market requires.
GGlloobbaall ttaalleenntt ssccoouuttss.. Where to find the talent to achieve “time to market" objectives and to meet the need for “seamless
research"? Where to go to complement current staff when the task starts with the definition of the task and the solution
begins with a “clean sheet" solution? As ICT investors assess their options, they quickly assume the role of global talent
scouts. Many have found their needs met best in Bulgaria for reasons identifiable as skill sets, problem-solving, and delivery.
Work done in Bulgaria continues to attract investment by familiar “brand
name" giants looking for “greenfield" sites for software development centers
and related production sites as well as leading niche companies and “bou-
tiques", any of whom could have set up shop literally anywhere.
Either way, Bulgaria has become a technology creative base of choice for investors looking for the hard-to-find combi-
nation of technical expertise, innovation, universal language skills, and project closure which represents start-to-finish,
“leading edge" development. Virtually all Bulgaria ICT professionals are fluent in another European language – most in
English, German, or French.
Current strengths include software specialties such as: customized software development, development of Internet solutions
and applications, multimedia development, wireless application development, security solutions development, education
software development, quality assurance, computer system software, networking software and Web design,
CAD/CAM/CAE software, telecommunications and wireless development software, application software, and firmware.
In GoodCompany:
In 2002 the number of the mobile network subscribers exceeded2 million (there are two GSM operators and one NMT450).
DID
YOU
KNOW?
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32
I n v e s t BG 2 0 0 4
THE BUSINESS BASE: TOURISM.
In 2003, tourist arrivals increased by 17.9 percent from 2002 to more than 4 million according to the Ministry of
Economy. Greek tourists arrivals increased by nearly 40 percent from the previous year, but Britons increased the
most as a percentage, up by more than 43 percent. In 2004, the trend continues with an increase of 25 percent in
the first two months of the year.
In 2005, Bulgaria expects more than 4.4 million visitors, and associated revenue of $2 billion which is according to
the Ministry of Finance, an increase from 3.4 million visitors and $1.5 billion respectively in 2004.
Developers have invested more than $250 million in the past three years in Sunny Beach, Bulgaria's most prominent
summer resort. Based on totals in 2003, this year Sunny Beach will attract an estimated 300,000 visitors, predomi-
nately from the Scandinavian countries, Germany and Great Britain. Development includes15 new hotels started, and
a new aquapark.
Bulgaria's Black Sea Coast averages nearly 300 days of sunshine annually.
Bulgaria's more than 600 hot, warm and cold mineral springs offer varying physical and chemical contents,mineral levels, curative gases, biologically active trace elements and curative properties.
Bulgaria spas cater to tourists seeking state-of-the-art treatments talasso-therapy, phyto-therapy, curative mud,manual therapy, paraffin treatment, acupuncture, helio-prophylaxis, ozone and oxygen therapy, slimming proce-dures, and balneo-cosmetics.
Ski resorts at Pamporovo, Borovets and Bansko offer some of Europe's best skiing and a season lasting fromChristmas until Easter. Investors have announced plans for a EUR 100-150 million development with more than80 km of new ski trails.
DID
YOU
KNOW?
THE BUSINESS BASE: AGRICULTURE & FOOD PROCESSING.
A PURE APPEAL: ORGANIC TRADITION COMES FULL CIRCLE AS MARKET DIFFERENCE AND INVESTMENT OPPORTUNITY.
5500 ppeerrcceenntt EEUU ssuubbssiiddiieess.. Bulgaria's traditional approach to agriculture, chemically free agricultural land, proximity
to both East and Western markets, coupled with consumer preferences for organically grown foods, all suggest a major
investment opportunity for processors. Recent investment has focused on the introduction of modern marketing, grow-
ing, processing and distribution methods. The Special Accession Program for Agricultural and Rural Development
(SAPARD) provides for a 50 percent investment subsidy for qualified investment projects in agriculture.
Reforms planned ahead of EU membership would allow accelerated and easier conversion of agricultural land to indus-
trial use, and thereby allow the construction of more food processing plants adjacent to growing areas. Nearly 150 new
processing plants, and 450 dairies currently are in operation. Important, too, the government's proposed constitutional
change to permit outright foreign ownership of agricultural land will make market entry even easier than it is currently.
Now foreigners own land in conjunction with a Bulgarian partner. A pre-accession EU Program provides for a 50 percent
investment subsidy for investment projects in Agriculture.
p a g e
33
The Business Base . . .
THE BUSINESS BASE: ENERGY.
IT'S ALL IN THE TIMING: STATE-OF-THE-ART REGULATORY COMMISSION, STABLE RATES, MAJOR OPPORTUNITIES FOR REGIONAL EXPORT.
FFoorr iinnvveessttoorrss aanndd eenndd uusseerrss.. Bulgaria's energy sector promises stable rates ahead. Reasons?
FFiirrsstt,, the current rate structure already reflects the true cost of generation. Since 1999, rates to consumers increased 50
percent to a level sufficient to recover the costs of generation. Rates to industry remained flat during the same period.
Effectively, the necessary “pain" associated with the end of government subsidy is past. A social program protects “vul-
nerable consumers" but removes associated “social costs" from the rate structure.
SSeeccoonndd,, EU compliant Energy Act passed in 2003 provides for a modern regulatory commission to assure consumer pric-
ing protection yet still encourage new investment. The regulatory mechanism both builds in an “efficiency incentive" and
exerts a downward pressure into cost recovery, even as it builds a market for new investment. The regulations provide
1) incentives for generators, transmitters and distributors to produce and deliver, 2) controls to protect industry and con-
sumers alike, and 3) market development of trading at negotiated prices. Net result? Momentum toward a free market
for power distribution in the Balkans by 2007, and now in Bulgaria, free market forces taking shape.
TThhiirrdd,, the new Regulation on Electricity Prices passed in early 2004 provides for inflation-indexed prices, while provid-
ing for a decrease for certain classes of consumers who may, as well, directly negotiate contracts with producers.
Source: www.energy.bg
Bulgaria's privatization leading to renewal of its infrastructure is a statement of both its commitment and progress tomaintain its position as a regional net exporter of electricity.
In 2004, Bulgaria will begin rehabilitation of Maritsa Iztok Thermal Power Plant 2 following award of a Euro 226 million
contract Mitsui and Toshiba. The project is financed by the Japan Bank for International Cooperation (JBIC) with a cred-
it of up to EUR 196.8 million.
Maritsa Iztok Thermal Power Plant 3 will require an additional EUR 660 million in new investment. A joint venture of
NEK, Entersy (USA) and Enel (Italy) has begun rehabilitation, with completion scheduled for 2007.
Vatech Hydro GmbH (Austria) has also began a construction of the Tsankov Hydro Power Plant in accordance with Kyoto
Protocol. The EUR 200 million project will generate 80 mW of capacity. Source: www.doe.bg.
Bulgaria's Biotechnologies Information Center opened December 18, 2003, a pilot project of the World Plan Biotechnologies Science Center, financed by the US Department of Agriculture
Source: Sofia Morning News
Bulgaria's apiculture industry will double its productive capacity to 1.1 million by 2007. In 2004, the industry will launch a Bulgarian "quality mark" program to promote recognition of its honey in markets worldwide.
Source: Bulgarian Apiculture Association
DID
YOU
KNOW?
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I n v e s t BG 2 0 0 4
Other investment opportunities include rehabilitation of:
Existing power plants.
Power transmission grid to meet UCTE requirements.
Power distribution network upgrade to curb energy distribution losses and costs.
Construction of new capacity.
In total, Bulgaria will need of EUR 6 billion in energy investment over the next years to meet projected market needs.
NNaattuurraall ggaass.. Bulgaria's need for a low pressure natural gas distribution network as an environmentally sound, cost-
effective alternative for residential heating and industrial needs translates to a major investment opportunity.
With additional investment, Bulgaria is well positioned as a net exporter of natural gas with opportunities for growth in
Turkey, Greece, and Macedonia. The privately-owned Bulgargas Company will begin natural gas production in 2004, and
through its distributor, Petreco, will meet approximately 10 percent of current national needs annually.
Total current investment in the natural gas industry amounts to more than $30 million of $65 million forecast. Petreco
currently manages a $5 million annual exploration program for new reserves.
THE BUSINESS BASE: TELECOMMUNICATIONS.
CELLS TO SELL: ANALYSTS, SURVEY PREDICT RECORD GROWTH.
EEUURR 4400--5500 mmiilllliioonn.. In 2004-2005, industry experts familiar with the Bulgaria telecommunications market project
investments of EUR 40-50 million likely, including the current installation of a new, nationwide fiberoptic network already
in progress. At the same time, some analysts believe cost reduction, as much as 50 percent or more for domestic and inter-
national access, and half-to-two-thirds for international access likely following the final sale of the state telecom company.
In 2003, Bulgaria passed a new telecom law in full accordance with EU standards. Technological developments have kept
pace with worldwide standards, such as the availability of high-speed data transfer (up to 76.8 kilobit per second) lead-
ing to predicted growth of smart phones with access e-mail, browsing, and more.
According to Alpha Research, a Sofia-based market research firm, more than 38 percent of adults in Bulgaria currently
use mobile phones. The Alpha survey did not include consumers 18-years-old and younger. The expected launch of a third
GSM operator would likely increase the number of adult users by another 37 percent over the next 12 months, according
to the survey.
We are back in Bulgaria because we believe that, after the liberalizationof the Bulgarian telecom market, many companies can take advantage ofour products and services."Oyvind Isaksen, President Nera
(Norwegian-based Nera is a global market leader in wireless transmissionproducts, high capacity (SDH) and mobile satellite communications).
WHAT
THEY
SAY
“
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The Business Base . . .
THE BUSINESS BASE: CHEMICALS AND PETROCHEMICALS.
Chemical industry accounts for approximately 20 percent of Bulgaria's industrial output and has a strong position in
Bulgarian exports. Major sub-sectors include:
Petroleum and petrochemical processing
Automotive gasoline, diesel fuels, gas oil, lubricants, antifreeze, acrylonitrile, toluene, styrene
Inorganic and organic chemical production, fertilizers
Perfume, cosmetics and essential oils
Synthetic fibers: polyester and viscose fibres and silks
Paints and varnishes
Plastic and rubber industry
Major foreign investors in sector include:
Lukoil Neftochim Bourgas JSCo (Russia): fuels, petrochemicals and polymer
Solvay Sodi JSCo. Soda ash
Acid & Fertilizers LLC (US)/Agropolychim JSCo: fertilizers
Texaco Global Products (US)/Prista Oil: lubricants
Hendrik Rietdijk (Netherlands)/Kula Ring JSCo: rubber compounds, press products,
conveyor belts, profiles, rubber-metal products
THE BUSINESS BASE: METALLURGY AND COMPONENTS.
Ferrous and non-ferrous metallurgy are the basis of machine-building industry, construction and other branches of
the Bulgarian economy. In 2002, metallurgy accounted for nearly 10 percent of Bulgaria's industrial GDP, and nearly
18 percent of total exports.
Main sub-sectors include:
Basic iron, steel & ferroalloys – 46%
Metal casting – 11%
Basic non-ferrous metals – 38%
Tubes – 3%
Iron & steel production – 2%
…with annual production, in tons (2002):
Flat roll-formed steel products – 1,352,000
Long steel products – 246,000
Anode copper – 161,000
Lead – 82,000
Zinc – 87,000
Source: Invest Bulgaria Agency
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THE BUSINESS BASE: PHARMACEUTICALS.
Bulgaria both formulates and manufactures pharmaceutical products. In 2002 the Bulgarian pharmaceutical market con-
tributed EUR 296.5 million to GDP, with EUR 317 million projected for 2003, driven by growth in over-the-counter (OTC)
products and prescription drugs.
Currently, two companies, Balkanpharma and Sopharma, account for between 90-95 percent of the domestic productive capac-
ity. Another Bulgaria based company, the Commercial League - National Pharma Center Inc., is Eastern Europe's leading phar-
maceutical distributor. The National Center for Infectious and Parasitic Diseases is the only local manufacturer of vaccines.
During the past five years, Bulgaria's OTC market more than doubled, with a real growth of 37 percent. Market leaders includ-
ed herbal products, cough remedies, pharyngeal preparations, digestive remedies, medicated shampoos, dietary supplements,
sedatives and sleeping products. In 2002, the number of pharmacies in Bulgaria increased from 2,700 in 1997 to 4,500.
Health-food shops, supermarkets, specialty stores and opticians now compete with pharmacies and drugstores in markets for
vitamins and dietary supplements, other OTC consumer products.
Pharmaco (Iceland) and Bioland (France) are the largest investors to date in Bulgaria's market. Since Pharmaco bought
Balkanpharma AD in 2000, the company has invested $39 million in Bulgaria and currently employs 6,000 people.
AstraZeneca, Novartis, Aventis, Alcon, GlaxoSmithKline and other leading pharmaceutical companies maintain sales offices
in Bulgaria.
THE BUSINESS BASE: PRECISION MACHINES & MECHANICALENGINEERING.
In 2002, machine production and metallurgy accounted for more than seven percent of Bulgaria's total industrial output.
By 2003, more than half of Bulgaria's machine-tool companies had introduced certified quality assurance systems meeting
ISO 9000 standards, and some had already implemented ISO 14001environmental management systems. Bulgaria exports
most of its machines and components to EU countries both for Original Equipment Manufacture (OEM) assembly and for end
users. Most carry the “CE" mark.
Bulgaria's machine tool and metal producers are known for manufacture of:
Metal products, including cisterns, tanks, steam boilers, forging press and powder metallurgy products,
fittings, kitchen utensils, tools, fixtures
Machine tools, including hydraulic and pneumatic products, arms and munitions, automated machines,
specialized automobile machine tools, warehouse systems, fork-lifts, electric chain hoists, household
appliances, machines for metal cutting, and woodworking, agricultural machines, specialized machinery
for food, wine and tobacco industries
Motor vehicles, trailers, semi-trailers, parts and accessories
Transport equipment, including ships, shipyard machinery and tools, railway carriages, motorcycles, bicycles
Production technologies used in the machine tool and metallurgy industry range from state-of-the-art laser metal cutting to
cold and hot plastic metalworking, welding, casting (of non-ferrous metals) under counter-pressure, to heat and chemical heat
treatment of metals in controlled atmosphere, to traditional gas-flame metal cutting.
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The Business Base . . .
THE BUSINESS BASE: ELECTRICAL MANUFACTURING AND ENGINEERING.
In 2002, electrical manufacturing, electrical engineering and electronics accounted for five percent of GDP. Asian and African
markets dominate the export market. Engineering services and consulting have emerged as major growth areas. Both
Siemens Bulgaria and Electroimpex have established engineering services firms.
Bulgaria's manufacturers continue to expand production in several key markets, including cables and wires in response to
continuing demand driven by telecommunication and data processing systems and consumer appliances.
Bulgaria is a leader in the production of automation, electronic measuring and control devices. Overall, the sector is well posi-
tioned to respond to major regional investments to upgrade consumer metering in response to energy grid investments
planned for mid-decade. Recent investments include Festo's new factory for the manufacture of sensors and pneumatic sys-
tems.
Other key sub-sectors include:
Heavy-duty industrial grade electric motors, hand tools, hoisting & hauling and transport and special motors
State-of-the-art industrial grade batteries for all types of vehicles, including diesel locomotives and other rail
applications
High/middle voltage electric power equipment, switchgear
Low voltage switchgear, electric utility & installation products
Component manufacturing including parts, castings, moldings, contact elements, coatings, and related materials
Electric thermal equipment for both industrial, residential applications, from furnaces to consumer products
Engineering services and consulting
THE BUSINESS BASE: TRANSPORT.
ROAD TRAVEL TIMES REDUCED, MAJOR PRIVATE INVESTMENT REVIVES RAIL, NEW AIRPORT TERMINAL CONSTRUCTION BEGINS…
…IN 2003RRooaaddss.. Bulgaria awarded contracts worth EUR 15.3 million for road construction in northeastern, southern and central
areas serving tourist destinations. Bulgaria submitted its plan to introduce a phased-in toll system for Bulgaria and EU
registered vehicles, and continued its major investment in highway construction and repair. A number of motor freight,
freight forwarders, and logistic companies including Biomet, Transcapital, Schenker, and M&M have a well established base
serving customers and handling trans-Europe traffic.
RRaaiill.. Bulgaria restructured the former Bulgarian State Railways (BDZ) as BDZ-Rolling Stock & Operations and BDZ
Infrastructure and announced plans to privatize both. The new BDZ will float its first corporate bond issue to finance the
repair of 3000 carriages, and reported a 10 percent increase in annual freight shipments.
AAiirrppoorrttss.. Bulgaria began construction of both a new passenger terminal for Sofia Airport scheduled for completion in mid-
2005, and new runway expansion. Lufthansa, the leading European carrier serving Sofia, recorded 160,000 passengers, an
11 percent increase. The government announced plans to privatize Bulgaria Air, the national flag carrier, in 2004.
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MMaarriinnee.. Bulgaria's commercial fleet includes sea and river fleets, one of the region's largest. Both are scheduled to be
privatized in 2004.
Pan Europe Projects.
Bulgaria continues to make progress on a number of Pan-European Transport Corridor projects including:
Pan-European Transport Corridor IV:In 2004, pending EU approval for EUR 70 million in co-financing, Bulgaria expects to begin construction
of the EUR 223 million Vidin - Kalafat Danube Bridge project. The bridge will link Bulgaria and Romania
and open to traffic in 2007-2008
Reconstruction and electrification of the Plovdiv-Svilengrad-Greek/Turkish border railway line
Construction of the Orizovo-Kapitan Andreevo (Turkish border) section – Maritsa Motorway
Pan-European Transport Corridor VII:Reconstruction and modernization of the Danube Port of Lom
Pan-European Transport Corridor VIII:Construction of TRAKIA Motorway, section Orizovo (Plovdiv) - Karnobat (Bourgas) 190 km
Construction of the railway line (2.5 km) between Gueshevo station and the Macedonian border
Extension, reconstruction and modernization of the Port of Bourgas
Extension, reconstruction and modernization of the Port of Varna
I n v e s t BG 2 0 0 4
THE BUSINESS BASE:IN THE COMPANY OF LEADERS
Market-leading software. TumbleweedCommunications Corporation
In 2003, Tumbleweed (NASDAQ:TMWD), a Redwood
City, California (USA) provider of mission-critical
Internet communications software, opened a new soft-
ware engineering center in Sofia with a focus on devel-
opment and support of the company's market-leading e-
mail firewall and secure e-mail software products.
Tumbleweed Communications customers include: ABN
Amro, Bank of America Securities, JP Morgan Chase &
Co., Society for Worldwide Interbank Financial
Telecommunication (SWIFT).
Market leading technology. SAP Labs Bulgaria
SAP Labs Bulgaria, a subsidiary of SAP AG, Germany,
works closely with SAP sites worldwide to develop
leading-edge J2EE Application Server infrastructure for
portal, warehouse, exchange, and all application com-
ponents. In 2004, the company announced plans to
increase its 100 professional staff 10-fold.
Market-leading fun. Haeminont Games
Who better to say gold fit for a king that Computer
Gaming World Magazine? In 2003, Haeminont Games'
an independent, Bulgaria-based and wholly-owned
game developer, won the Editor's Choice Gold Award as
top game in for its games, “Celtic Kings: Rage of War"
and “Celtic Kings: The Punic Wars". Celtic Kings games
are No.1 selling titles in some territories. The games are
available in 12 languages, and are market leaders.
Software
Technology
Pharmaceuticals
Dairy Products
Solar Batteries
Metals
Multiplex
Textile
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Market-leading pharmaceuticals. AstraZeneca Bulgaria
In 2003, the Swedish parent company of AstraZeneca Bulgaria, a producer of specialty pharmaceuticals used in treatment of
central nervous system disorders sponsored its annual "Contemporary Approaches and Technologies in Psychiatry" featuring
British Professor of Psychiatry William Deakin, president of the British Association of Psychopharmacology and professor of
psychiatry, University of Manchester. Deakin spoke on new discoveries partially explaining schizophrenia's mechanism at
the conference held in Varna, Bulgaria's Black Sea resort. The company recently invested more than $5 million in Bulgaria's
health care system.
Market-leading dairy products. Danone-Serdika
In 2004, Yogurt producer Danone-Serdika will invest BGN 40 million to install milk producer equipment to EU standards.
Danone reports that its raw milk product at contracted farms already exceeds European standards for purity and quality.
Market-leading solar batteries. Viohalco
In 2004, Viohalko, a Greek-based metal producer, will begin manufacture of solar batteries in a new EUR 2 million plant.
The company previously has more than $200 million invested in 20 projects in Bulgaria.
Market-leading metals. Umicore Med
In 2004, Umicore will expand for the second consecutive year adding another $12 million to the $25 million invested in 2003,
and nearly more than $267 million since 1997. The company primarily exports anodes and cathodes for industrial use pri-
marily to customers in Belgium and Southeast Europe. Other major export product is sulphuric acid. In 2003, the company
reported annual gross sales of $226 million.
Major multiplex. Israeli consortium
In 2004, an Israeli consortium will begin construction of a EUR 50 million commercial/retail mixed development, its third in
Bulgaria and at 45,000 sq. meters, its largest. The development will include 120 shops, a superstore, a six story office com-
plex, 12 cinemas, recreational facilities. The complex is scheduled for completion in 2005.
Market-leading textile production. Miroglio
In 2003, the Italy-based Miroglio textile manufacturer added another $11 million to its previous EUR 153 million investment
in five plants producing cotton, viscose, polyester and wool fabrics. The state-of-the-art plants operate to ISO 9001 standards.
I n v e s t BG 2 0 0 4
ONE-STOP-SHOP:INVESTOR SERVICES INCLUDE AN "ASK US" PROGRAM
In the end,investmentbecomesa matterof trust.
How to build it from the start? As part of their due dili-
gence, investors typically like to talk with one of “their
own" familiar both with their business as well the “local
terrain." To help that process along, the Invest Bulgaria
Agency (IBA) takes its “one-stop-shop" two steps beyond
the “normal services" with its “Ask us” program.
In Part One, the Agency pairs “like with like" so that
specialist can talk with specialist: by industry, by inter-
est, by background, effectively, fielding a team com-
prised of those already here who can respond independ-
ently and confidentially to investor questions.
In Part Two, the Agency extends the services of its “one-
stop-shop" with its newly formed Bulgarian Investor
Information Network (BIIN). The Network assists
investors with timely, accurate, objective, and some-
times, hard-to-get specialty data. Members include some
of Bulgaria's best sources for business consulting, legal,
accounting, risk analysis, investment banking, stock
management, and education/training. Members must meet
stringent standards for professional performance and
international credentials, and agree to a code of ethics.
As well, the Agency introduces investors to Bulgaria
opportunities: from itineraries, to identifying sites, to
introduction to potential partners, through incentives
available, labor market conditions and more.
Finally, the IBA remains a “friend and ally" and when
necessary, a “troubleshooter" for investors afterward in
the hope one satisfied investor will lead to another.
IBA services offered include:
Bulgarian Investor Information Network:
relevant, authoritative, objective data to
assist with due diligence.
Information on legal, taxation and financial
issues.
Business partner and site search.
Preparation of a "Business Case" unique
to the investor.
Site location and related services.
BULGARIA ON THE INTERNET
The President of Bulgaria www.president.bg
Bulgarian Government www.government.bg
National Assembly www.parliament.bg
Ministry of Foreign Affairs www.mfa.government.bg
Ministry of Economy www.mi.government.bg
Ministry of Finance www.minfin.bg
Ministry of Energy & Energy Resources www.doe.bg
Ministry of Justice www.justice.government.bg
Ministry of Transport & Communications www.mtc.government.bg
Ministry of Agriculture & Forestry www.mzgar.government.bg
Sofia Municipality www.sofia.bg
Investment Agency www.bfia.org
Privatization Agency www.priv.government.bg
Agency for Small & Medium-sized Enterprises www.asme.bg
Bulgarian Trade Promotion Agency www.bepc.government.bg
Bulgarian Stock Exchange www.bse-sofia.bg
Bulgarian National Bank www.bnb.bg
National Statistical Institute www.nsi.bg
Bulgarian International Business Association www.biba.bg
Bulgaria Economic Forum www.biforum.org
Bourse Information Company www.bic.bia-bg.com
Bulgarian Industrial Association www.bia-bg.com
Bulgarian Chamber of Commerce & Industry www.bcci.bg
Bulgarian Economic Portal www.econ.bg
Business Portal on SEEurope www.seeurope.net
Sofia Morning News www.novinite.com
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Directory
Agency for Economic Analyses & Forecasts31 Aksakov Street,1000 Sofia, BulgariaTel: +359 2 985 95601Fax: +359 2 981 3358E-mail: [email protected]://www.aeaf.minfin.bg
Agency for Small & Medium-sized Enterprises1 Sveta Nedelya Square, 1000 Sofia, BulgariaTel: +359 2 981 6600,Fax: +359 2 986 1899E-mail: [email protected]
American Chamber of Commerce in BulgariaBusiness Park Sofia, Mladost 4 Area, Building 2, 6th floor1715 Sofia, BulgariaTel: +359 2 976 9565, 976 9566Fax: +359 2 976 9569E-mail: [email protected]://www.amcham.bg
Bulgarian Association of Software Companies51 Cherni Vrah Boulevard, 1407 Sofia, BulgariaTel: +359 2 962 4156Fax: +359 2 862 1194E-mail: [email protected]://www.basscom.org
Bulgarian Association for Information Technologies13 Shipka Street, enr. 2, 1st floor, 1504 Sofia BulgariaTel: +359 2 946 1513Fax: +359 2 946 1457http://www.bait.bg
Bulgarian Chamber of Commerce & Industry42 Parchevitch Street, 1058 Sofia, BulgariaTel: +359 2 987 2631, 980 9899Fax: +359 2 987 3209E-mail: [email protected]://www.bcci.bg
Bulgarian Industrial Association16-20 Alabin Street, 1000 Sofia, BulgariaTel: +359 2 980 9916, 980 9096Fax: +359 2 987 2604E-mail: [email protected]://www.bia-bg.com
Bulgarian International Business Association55 Al. Stamboliiski Blvd., floor 3, 1000 Sofia, BulgariaTel/Fax: +359 2 981 9169, 981 9564, 988 6776E-mail: [email protected], http://www.biba.bg
Bulgarian National Bank1 Alexander Batenberg Square, 1000 Sofia, BulgariaTel: +359 2 914 59Fax: +359 2 980 2425, 980 6493E-mail: [email protected]://www.bnb.bg
Coordination Center for Information, Communication & Management Technologies1 Dondoukov Boulevard, 1000 Sofia, BulgariaTel: +359 2 940 3643Fax: +359 2 940 3646E-mail: [email protected]://www.ccit.government.bg
ICT Development Agency6 Gourko Street, 1000 Sofia, BulgariaTel: +359 2 949 2151Fax: +359 2 949 2277E-mail: [email protected], http://www.ict.bg
Insurance Supervision Directorate6 Sveta Nedelya Square, 1000 Sofia, BulgariaTel: +359 2 981 7934Fax: +359 2 981 7858E-mail: [email protected]://www.fsc.bg
Invest Bulgaria Agency31 Akaskov Street, 3rd floor, 1000 Sofia, BulgariaTel: +3592 985 5500, +359 2 980 0918 Fax: +3592 980 1320, +3592 987 4211 E-mail: [email protected]://www.bfia.org
Ministry of Foreign Affairs2 Aleksandar Zhendov Street, 1032 Sofia, BulgariaTel: +359 2 948 2999Fax: +359 2 870 3041E-mail: [email protected]://www.mfa.government.bg
DIRECTORY: HELPFUL WEB SITES & SOURCES:
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Ministry of Economy
8 Slavyanska Street, 1000 Sofia, BulgariaTel: +359 2 940 73 03Fax: +359 2 988 5532; 987 2190E-mail: [email protected]://www.mi.government.bg
Ministry of Finance
102 Rakovski Street, 1000 Sofia, BulgariaTel: +359 2 985 91Fax: +359 2 980 6863E-mail: [email protected]://www.minfin.bg
Ministry of Agriculture & Forestry
55 Hristo Botev Boulevard, 1606 Sofia, BulgariaTel: +359 2 985 11255Fax: +359 2 980 6256E-mail: [email protected]://www.mzgar.government.bg
Ministry of Labor & Social Policy
2 Triaditsa Street, 1051 Sofia, BulgariaTel: +359 2 91 408Fax: +359 2 986 1318E-mail: [email protected]://www.mlsp.government.bg
Ministry of Transport & Communications
9 Diakon Ignatyi Street, 1000 Sofia, BulgariaTel: +359 2 940 9771Fax: +359 2 987 1805E-mail: [email protected]://www.mtc.government.bg
Ministry of Justice
1 Slavianska Street, 1040 Sofia, BulgariaTel: +359 2 923 7352Fax: +359 2 981 9157E-mail: [email protected]://www.justice.government.bg
Ministry of Energy & Energy Resources
8 Triaditsa Street, 1040 Sofia, BulgariaTel: +359 2 54 90 325, 987 8425Fax: +359 2 988 1443E-mail: [email protected]://www.doe.bg
Ministry of Regional Development & Public Works
17-19 Kiril I Metodii Street, 1202 Sofia, BulgariaTel: +3592 94 059Fax: +3592 987 2517E-mail: [email protected]://www.mrrb.government.bg
Ministry of Environment and Waters
67 W. Gladston Street, 1000 Sofia, BulgariaTel: +359 2 940 6000Fax: +359 2 988 5913E-mail: [email protected]://www.moew.government.bg
National Statistical Institute
2 Panayot Volov Street, 1038 Sofia, BulgariaTel: +359 2 985 7729; 985 75357Fax: +359 2 985 7799E mail: [email protected]://www.nsi.bg
Privatization Agency
29 Aksakov Street, 1000 Sofia, BulgariaTel: +359 2 987 3294Fax: +359 2 980 9827E-mail: [email protected]://www.priv.government.bg
Repraesentanz der Deutschen
Wirtschaft in Bulgarien25A F.J. Curie Street, 1113 Sofia, BulgariaTel: +359 2 963 4301Fax: +359 2 963 3391E-mail: [email protected]://www.ahk.de
Securities & Stock Exchanges Commission
6 Sveta Nedelya Square, 1000 Sofia, BulgariaTel: +359 2 940 49 99Fax: +359 2 980 26 47E-mail: [email protected]://www.fsc.bg
State Energy Regulatory Commission
8-10 Dondukov Boulevard, 1000 Sofia, BulgariaTel: +359 2 988 2498Fax: +359 2 988 8782E-mail: [email protected]://www.dker.bg
Is it really so sudden or just recent recognition?
In early 2004, Bulgaria was a-buzz with casting calls for an actor to portray Victor Krum in
the film adaptation of J.K. Rowling’s TThhee GGoobblleett ooff FFiirree...Then, the Washington Post kindly
named Sofia one of its ““2200 hhoott ddeessttiinnaattiioonnss..""...CCoorrnneelliiuuss CCllaauuddiioo KKrreeuusscchh was one of the small
army of performers at 2004 Sofia Jazz Peak Festival ...CCoossmmoo, the lifestyle publication cater-
ing to young women, launched a Bulgarian language edition...And, then, too, we seem to have
become a favorite for German, Danes, well, Europeans seeking wwoorrlldd ccllaassss sskkiiiinngg.
SIGNS OF THE TIMES:
UH-OH. SUDDENLY, WE'RE
YOUR STRATEGY
OUR "PIECES"
YOU WIN IN THE END
. . .
CONTACT US. Invest Bulgaria Agency
e-mail: [email protected]
This publication was made possible through support provided by
the United States Agency for International Development