Buy & Sell Bulgaria Insight Newsletter

Not only has Bulgaria dominated Knight Frank’s Global House Price league tables for the past year, but its mortgage market is now one of the strongest in Europe, even amid the prevailing worldwide credit crunch

Bulgaria’s real estate market has been the world’s strongest since 2007, according to the latest Bulgarian Banking Sector Analysis published by leading research house RNCOS. Even in the midst of an international credit crunch, Bulgarian property buyers took out over €2.5bn in mortgages over the past year, a trend that is expected to see an unprecedented forecast CAGR of 88% by 2010.

Housing loans now account for over a third of all lending products in the country, making Bulgaria one of the fastest growing credit markets in Europe, bolstered by a huge increase in mortgage products which offer attractive incentives for investors.

Bulgaria’s real estate market has consistently beaten all records and expectations. Bulgaria recently clinched its third consecutive placement at the top of Knight Frank’s Global House Price Index for the first quarter of 2008, with an annualised growth of 31.5%. Bulgaria beat France, Hungary, Austria, Switzerland, Poland and Denmark, all of which recorded 3% growth or less for the first quarter of 2008, while convincingly outpacing Lativa, Estonia and Northern Ireland, which all recorded negative growth of -20% and less for the year.

Analysts remain extremely optimistic about Bulgaria’s long-term growth, in part due to its bourgeoning tourist industry. Tourism is tipped to increase by over 10% in 2008 according to the State Tourist Agency, and the country’s image as an emerging tourist hub is expected to be bolstered with the addition of multi-million euro golf clubs and resorts in the Black Sea region.

Currently there are nineteen golf courses being built in Bulgaria, including a €50m development near Pravets, and experts believe that strong investment interest will eventually lead to the construction of up to forty more resorts in the near future.

In a further show of confidence, American investors who have been hard hit by the credit crunch have put over $1bn into Bulgaria, seeking to capitalize on Bulgaria’s growth boom. According to Borislav Boyanov, President of the Bulgarian American Chamber of Commerce, Bulgaria’s NATO and EU memberships, its 10% corporate tax and the agreement on joint military facilities between the US and Bulgaria have contributed greatly to this investment boom. “The world economic crisis and its global consequences have not affected any essential aspects of Bulgarian-US economic relations. US investors keep coming because Bulgaria is a strong emerging market and continues to create favourable business conditions”, Boyanov said.

Knight Frank, Global House Price Index (annual % growth)

 Close of Charity Auction

The Bulgarian Parliament has reduced the minimum capital needed to register a company in Bulgaria by a factor of 10, after adopting changes in the Trade Law on first reading.

The changes have been submitted by Martin Dimitrov from the United Democratic Forces (UDF) and stipulate that the minimum capital to register a joint stock company is reduced from 50 thousand BGN to 5 thousand BGN while the minimum capital to register a limited responsibility company becomes 500 BGN instead of the current 5 thousand BGN.

The rapid adoption of the changes came as a surprise since during recent debates, the majority of Parliament members voiced objections arguing that the current decree allows everyone to register a company anyway and that 500 BGN is not an amount appropriate to be used for the start up of commercial activity since the sum is not even enough for one person to go on vacation nowadays. The move is widely viewed as an attempt to encourage the setting up of more companies in order to assist the economy.

During the discussion, Martin Dimitrov cited research conducted by the World Bank in 176 countries, showing that 75 of them do not have a requirement for minimum capital for the registration of a limited responsibility companies, at all, France being one such example, where a company can be established in one day for the cost of 150 EUR.

US companies and US individuals investing in Bulgaria will soon pay lower taxes for doing business in the country, the Bulgarian Standard Daily announced.

The tax reduction is included in the agreement between Bulgaria and the US for avoiding dual taxation. US President George W. Bush has sent a letter to the Senate, urging senators to ratify the agreement. The US Senate’s approval is the last formality before the agreement can come into operation as Bulgarian MPs have already approved the proposal.

The agreement for avoiding dual taxation provides for a five-percent interest and royalties’ tax to be paid by Bulgarian firms to US companies. Copyrights can include distribution of books, movies, music and television shows as well as the use of trademarks. Bulgarian companies will pay the same five-percent dividend tax to US shareholders.

Bulgarian firms participating in US pension funds investing in Bulgaria will also take advantage of the new tax relief measures since the interests and the dividends paid to those US pension funds will be tax exempt. The pensions, the ex-spouse and child support given to US citizens residing in Bulgaria would not be taxed according to the Bulgarian Tax Law. The same is valid for the financial support received by Bulgarians residing in the US.

Bulgarian interns and students in the US will not pay taxes on income lower than USD 9000 per annum; neither will they pay taxes on all amounts they receive from Bulgaria to pay their tuition fees and living expenses. However, Bulgarian students who work in the US only for the summer will continue to pay taxes according to the US Tax Law. Afterwards, however, the taxes paid in the US will be deducted from the tax they owe in Bulgaria.

In addition, the agreement regulates the information exchange between taxation and investigating authorities in Bulgaria and USA, which will lead to the prevention of tax evasion for deals conducted between Bulgarian and US companies.

The preparation of the tax agreement preceded the recent visit of the Bulgarian Prime Minister Sergey Stanishev to the US in June.

The summer season started with a “great” challenge for Varna Airport. Now every Monday Varna Airport operates twice as many Boeing 747 “Jumbo Jet” airplanes, compared to last year. About 2800 passengers are arriving on Monday with the Russian Transaero Airlines in a Boeing 747. Russian tourists arrive from Moscow, St. Petersburg, Novosibirsk, Rostov-on-Don in Varna during this season with regular flights of Bulgaria Air, Siberia Airlines, Russia, Aeroflot-Don.

Varna Airport operates chartered flights to different destinations in Russia: Moscow, Ekaterinburg, Samara, Saratovo, Surgut, etc. The new airlines at Varna Airport for this season are: Edelweiss Air, Lithuanian Airlines, Air Italy Polska, Lviv Airlines with flights to- Zurich, Vilnius, Warsaw, Katowice, Lviv.

With high frequency during the week, Varna Airport is running regular flights in 24 destinations in different countries: Russia, Germany, Great Britain, Ukraine, Poland, Switzerland, Belgium, Luxemburg, Denmark, Hungary, Czech Republic, Slovakia, and Austria. There are more traveling opportunities with low-rate airlines from Varna Airport. In April the spring timetable of Norwegian Air Shuttle to Oslo came into force. Later this month the airline launches flights to Warsaw. With a great frequency there are low-rate flights to Copenhagen, Düsseldorf, Cologne and Berlin with the following airlines: Sterling Airlines, Air Berlin and Germanwings. Flights of the low-rate airlines Centralwings, Sky Europe Airlines and Wizz Air started in June respectively to Warsaw, Bratislava, Prague, Vienna and Budapest. Since July Wizz Air is going to have flights to Sofia four times a week.

During the first five months more than 185 000 passengers have travelled through Varna Airport, which equates to 8% growth, compared to the same period last year, reported by the airport’s press-centre.

There are many birthday boys and girls in July. Our clients and good friends Ray Potter, Kevin Webster, Stephen Barker, Joel House, Margaret Pender and Louise Todd, have their special day this month. We would like to wish them all Many Happy Returns and the best of luck!

And great news regarding our friend and honourable investor, Ms Veronica Sack. On 29^th June, Veronica became Mrs. Malcolm Waters. Congratulations to the new family!

“Dear Veronica and Malcolm,

As you set off for a new life together …

Here’s wishing you smiles for every mile you cross together!”

Malcolm & Veronica

It is our company policy to celebrate all Great Events!!!

By Mira Atanasova

To all our clients, I am happy to announce that this month’s Employee of the Month is our most respectful colleague Lili Gospodinova, Corporate Public & Customer Relations Manager at EUROLINK INVESTMENT GROUP.

Lili is an employee of many years, who has repeatedly proven her professionalism. She is an extremely capable and reliable person, always ready to take responsibility in every situation. Lili is always in a great mood, always smiling, ready to listen to anybody, who has a problem or something to share, trying to help them out, therefore, she is not only a good employee, but also a very good friend.

For almost a year now, she has been working on the CHOOSE LIFE initiative, doing everything she can to help disadvantaged youngsters, organizing concerts, tournaments and competitions. We are all very proud of her devotion to the campaign, because she made a lot of children smile and happy. Lili, always be yourself!

Bulgarian wine cellars received 40 awards at the International Wine Fair, which was held in London. This is Bulgaria’s best achievement at international wine exhibits and fairs in recent years. Bulgarian wines were awarded with 6 silver, 14 bronze medals and 20 honorary certificates.

Of course, compared to the awards received by world wine leaders, such as France with its 700 medals, the number of the Bulgarian ones seems quite small. However, according to experts, the 20 medals are very important because they demonstrate that after years of decline, the Bulgarian wine industry can once again become competitive on the world market.

In the 90’s Great Britain was invaded by Bulgarian wines - over 20 million bottles were imported there in 1999 alone. Official data from the Ministry of Agriculture shows that currently this number is 10 times lower. Bulgarian wines in Great Britain have been replaced by the New World competitors - manufacturers from Chile, Argentina and South Africa.
The International Wine Fair is one of the most anticipated events each year among world wine producers. 180 000 bottles of red, white and rose wines have been sent to London from all over the world. The visitors, which included mostly wine merchants and tasters, could sample over 1250 stands.

Bulgaria was represented by 20 companies and such overwhelming competition makes the 40 Bulgarian awards seem even more significant.

From Donegal News

Well it might not be a very good summer, but it is, nevertheless, summer, and this year’s brochures are starting to arrive!

One destination that has grown in popularity over the last number of years is Bulgaria. It is now one of the most sought-after destinations from Ireland.

Bulgaria is known as the “Jewel of the Balkans” and is a country of beautiful, unspoilt scenery, with miles of golden sandy beaches. It is rich in tradition and culture with beachside resorts offering relaxing holidays by the Black Sea followed by great nightlife in bars and restaurants dotted along the coastline.

Situated in South Eastern Europe Bulgaria features ancient cities and picturesque hilltop villages.

Some of the best-known resorts in Bulgaria are featured in brochures from Ireland including Golden Sands, Sunny Beach, Elenite and Albena.

Golden Sands is the largest resort on the northern black sea coast. It is situated in the beautiful natural park - Zlatni Piasaci, home to a variety of wild life and natural springs. This resort boasts rich wooded hills, pale yellow sand and crystal clear warm waters. This is a beach lover’s paradise with a good selection of water sports and a nightlife that gets really busy during the summer months. Some of the hotels are brand new having only opened their doors this year and the facilities should be excellent.

Bulgaria is good value for money with a good variety of hotels on offer, and I would be inclined to encourage costumers to book four star and this will be equivalent to three star accommodation here in Ireland. Some of the attractions in Bulgaria are the great value spa treatments available in many of the hotels. Everything from chocolate massage to wine baths is available and at a fraction of the prices charged in Ireland.

Bulgaria is a great destination and worth visiting at least once, although I suspect you will be tempted to return.

Varna’s Mayor Kiril Yordanov and Krasimir Uzunov, Executive Director of Mall Varna cut the ribbon and officially opened the biggest shopping centre in Bulgaria in mid June.

The official ceremony began at 11 am in the presence of Varna’s Deputy Regional Governor, the Chair of Varna’s Municipal Council and many Varna residents. His Highness, Right Reverend of Varna and Veliki Preslav Kiril consecrated the newest and most modern commercial and shopping complex in Bulgaria.

Varna’s Mayor stated that the quick construction of the Mall on two of Varna’s major thoroughfares and the upcoming opening of the expanded “Hristo Smirnenski” Boulevard was a prime example of good collaboration between private business and the municipal administration of the city.

The parking area with 800 parking spaces was able to accommodate the many Varna residents who came to see their city’s newest attraction.

Mall Varna has a total built-up area of 70 000 square meters, including 33 000 square meters of commercial space. Its 150 stores have already been contracted for the maximum period of ten years. Brands such as New Yorker, Camper and Burger King will be represented for the first time in Bulgaria.

The mall in Bulgaria’s Sea Capital will also have a children’s center named Capella Play, an ice skating facility called Avangard Ice, Excalibur Bowling, pool, as well as the first “Arena” movie theater in the city with 1300 thousand seats over eight movie theaters and a 3D cinema.

The facade of the five-storey building of Mall Varna will be illuminated by a unique light show changing color every thirty minutes.

Mall Varna was constructed by the Bulgarian Interservice Uzunovi Jsc. In the fall of 2007 it was bought by the Scottish company, Miller Developments, a subsidiary of Miller Group.

The price of EUR 120 M was a record for the purchase of a commercial centre in Bulgaria. This is also the second largest real estate deal in the history of the country.

The willingness of foreign firms to invest in the area bodes well for land and property values in Varna and serves as further proof of the rapid and ongoing development of the region.

“If you realized how powerful your thoughts are, you would never think a negative thought.”

Peace Pilgrim