1. Bulgaria – investment climate and business opportunities

2. Bulgaria is only 3 hours flight from all major destinations in Europe, Russia and the Mediterranean region
Strategic geographic location
Major transport corridors passing through Bulgaria
EU and EFTA
Russia and CIS
Turkey and Middle East

3. Macroeconomic indicators1
Macroeconomic indicators
Real GDP Growth
Inflation (HICP)
Bulgarian
EU-28
Bulgarian
EU-28
0.4%
0.4%
2006
2007
2008
2009
2010
2011
2012
2013
2007
2008
2009
2010
2011
2012
2013
2014*
* February
Unemployment
FDI Inflow
Bulgarian
EU-28
€ mln.
9,052
6,222
6,728
6.3%
2,437
1,151
1,330
1,070
1,092
2007
2008
2009
2010
2011
2012
2013
2014
2006
2007
2008
2009
2010
2011
2012
2013*
* January
* Preliminary data
Source: Bulgarian National Bank, Eurostat

4. FDI in Bulgaria comes mostly from EU countries and is concentrated in four main sectors
FDI by host country, (€ mln.)
FDI flows by industry, (€ mln.)
(1) Netherlands
6306.2
Real Estate
7936.9
(2) Austria
5750.9
Finance
7479.3
(3) Greece
3585.8
Trade
7059.5
(4) Germany
2834.3
(5) UK
2409.8
Manufacturing
7056.2
(6) Cyprus
2358.7
Energy
3490.6
(7) Russia
1889.8
Construction
2948.3
(8) Italy
1413.6
Telecom
2647.4
(9) USA
1395.6
(10) Hungary
1314.6
Other
3 207.8
Source: Bulgarian National Bank

5. Government financial indicators are remarkable not only in the region, but on a pan-European scale
Average government debt ( )
Greece
Italy
Belgium
Portugal
Iceland
France
Ireland
Hungary
Germany
United Kingdom
Malta
Austria
Cyprus
Netherlands
Spain
Poland
Turkey
Sweden
Slovakia
Denmark
Latvia
Czech Republic
Finland
Norway
Slovenia
Romania
Croatia
Lithuania
Bulgaria
Luxembourg
Estonia
-13%
-12%
-11%
-7%
-6%
-5%
-4%
-3%
-2%
-1% 0% 1%
15%
Average budget deficit/surplus ( )
Source: Eurostat

6. Country credit ratings comparison Q4 2013
Bulgaria was the only European country with increased credit rating by Moody’s in 2010 and 2011
Country credit ratings comparison Q4 2013
Country
S&P Rating
Moody's rating
Fitch Rating
TE Rating*
Czech Republic
AA-
Stable A1 A+
79.28
Poland A- A2
67.41
Italy
BBB
Negative
Baa2
BBB+
62.09
Bulgaria
BBB-
54.24
Spain
Baa3
52.55
Croatia
BB+
48.85
Macedonia BB
47.5
Romania
47.35
Turkey
Ba1
Positive
44.58
Hungary
42.58
Serbia
BB- 40
Ukraine B
Caa1
28.75
*The TE credit rating is driven by a model created at Trading Economics.
Source: Trading Economics Rating

7. Educated and skilled workforce is among the main advantages of Bulgaria
Key facts about education in Bulgaria
Almost 60,000 students graduate every year from over 50 universities
Bulgaria has one of the highest proportions of students abroad from all European countries
53 Universities, colleges and higher schools (6 with technical sciences)
Bulgarian students in foreign countries
24.6 % of population hold university degree
7 % of the workforce has engineering degrees
45.5 % from the population in Bulgaria speak at least one foreign language
English language studied by ≈ 85 % of students
Business
19 480
Iceland
17.8%
Social sciences
8 372
Ireland
14.2%
Slovakia
10.2%
Engineering
7 178
Bulgaria
8.3%
Education
3 677
Greece
5.8%
Health
3 166
Austria
4.7%
Law
1 553
Germany
3.1%
Architecture
833
EU-27 average
2.8%
Students in another EU / EEA country, % of all
Agriculture
860
Romania
2.2%
Other
12 684
Czech Republic
2.1%
Source: National Institute of Statistics, Bulgaria

8. Bulgaria has one of the lowest business costs in Europe.
Bulgaria has one of the lowest business costs in Europe
Gas prices for industrial users in Europe
Electricity prices for industrial users in Europe
€/Gigajoule, 2013
€/kWh, 2013
Czech Republic
Bulgaria
Bulgaria
Estonia
Poland
Germany
Austria
Turkey
Italy
Romania
EU average
Hungary
Spain
EU average
France
Czech Rep
Germany
Slovakia
Source: Eurostat

9. Bulgaria has one of the lowest business costs in Europe9
Bulgaria has one of the lowest business costs in Europe
Average gross annual salaries in industry and services
Lowest corporate income tax rate in Europe
€, 2011
%, 2014
Bulgaria
Bulgaria
10%
Romania
Romania
16%
Latvia
Hungary
19%
Hungary
Czech Rep
19%
Slovakia
10 788
Croatia
20%
EU average
26 402
Turkey
20%
United Kingdom
38 284
Estonia
21%
Germany
42 900
Slovakia
23%
Netherlands
45 793
EU average
24%
Denmark
56 299
Germany
30%
Source: Eurostat

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

11. Biggest investors are supported through a priority investment scheme
Priority projects can be related to all sectors of the economy, which do not contradict regulation 800/2008 of the European Commission
Subsidies not allowed in mining, primary agriculture production, and shipbuilding
Priority projects should exceed €50m and create at least 200 new working places for a 3-year period
€25m working places for certain manufacturing projects
€10m + 50 working places for high-tech services and R&D
Priority projects receive all benefits for certified investors, as well as the following:
Lowest possible costs for the acquisition of government and municipal land + waived taxes for land status changes
Working group for project support is assigned by the Council of Ministers
Financial grant scheme for up to 10% of the investment project cost (50% for R&D)

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

13. Why invest in Bulgaria? Political and business stability
EU and NATO member
Currency board
Low budget deficit and government debt
Low cost of doing business
10% corporate tax rate (0% in high unemployment areas)
10% personal income tax
Lowest cost of labor within EU
Favorable office rents and low cost of utilities
Access to markets
European Union / EFTA
Russia
Turkey / Middle East
Educated and skilled workforce
Government incentives

14. Leading global investors have chosen Bulgaria as an FDI destination
IT development
Back office operations
Chemical and metal Industry
Engineering
Food

15. InvestBulgaria Agency
InvestBulgaria Agency is a Government investment promotion arm, part of the Ministry of Economy and Energy
IBA services:
Macroeconomic data on Bulgaria
Legal advice
Data on operational costs
Regional information: industrial zones and infrastructure, data on unemployment, skilled labour force and level of education
Recommendation of investment project sites
Identification of potential suppliers, contract manufacturers and joint-venture partners
Personalized administrative servicing
Liaison with central and local governments
Liaison with branch chambers and NGOs 14

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