Buy & Sell Bulgaria Insight Newsletter

The President of Cyprus, Mr. Dimitris Christofias paid an official visit to Sofia at the invitation of the President of Bulgaria, Mr. Georgi Purvanov. ‘We are bound by an old friendship but also by new favorable opportunities in the future that can benefit our two nations’, the President of Cyprus stated. He revealed his satisfaction with the talks held with his Bulgarian colleague Georgi Purvanov and pictured them as being constructive and useful, outlining new perspectives for the strengthening of the bilateral relations.

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Bulgaria’s government is going to pay BGN 300 000 to international law consultants who will prepare and carry out the negotiations for an investment agreement with the Austrian company Voestalpine Stahl. The government’s move is regarding Voestalpine’s plan to invest EUR 5 B in the construction of a new steel factory on the Black Sea coast.

Bulgaria is competing with Romania, Turkey, and the Ukraine to attract this investment, which is expected to create 4 500 new jobs in the region, where the new factory will be located.

The BGN 300 000 will come from the budget of the Ministry of Economy. The hiring of foreign consultants is necessitated by the technical complexity of the project and by its significance for the Bulgarian economy.

The international law consultants will focus on the preparation of an investment agreement serving Bulgaria’s best interests as well as on the negotiations conducted with the Austrian company.

Nestle has decided to move most of its production of ice cream destined for Romania from its factory in Bucharest to its factory in Bulgaria’s Varna.

The transformation is part of the company’s plan to optimize its production in Southeast Europe.

Its Nestle Ice Cream factory in Varna was selected because of its good geographic location (fewer than 200 km away from Bucharest), and because the company has invested EUR 6 M in it during the last two years.

As a result, the factory has a modern production base, and is certified according to all EU standards. It has the capacity to supply the markets in Bulgaria and Romania, and to maintain the present exports in third countries.

A BGN 10 fee would be collected to certify an invitation from an individual for the issuing of a short-term Bulgarian visa for a foreigner’s stay in Bulgaria while a BGN 20 fee would be due when the invitation is for a foreigner, who is conducting business activities on Bulgarian territory.

The new fees were determined by the Ministries’ Council during their regular weekly meeting.

The fees are introduced in accordance with the new Decree for the Conditions and the Regulations for Issuing Visas and Determining the Visa Regime. The Decree became effective mid-July and reflects general consular instructions and the practice established in countries members of the European Union.

By Kerin Hope and Theodor Troev in Sofia, The Financial Times Limited 2008

Bulgaria’s Black Sea shoreline once marked the country’s eastern border. Under communism, the coastal waters were effectively barred to all but licensed fishermen and small boats from officially approved clubs.

“Effectively the beach was the frontier and the sea was closely patrolled,” says Petar Kaloianov, a veteran yacht skipper. Twenty years on, the secluded coastline is acquiring a special allure for the global super-rich hoping to escape the sometimes unwelcome attention they attract elsewhere on Europe’s crowded beaches.

Kavarna, the northernmost town along Bulgaria’s 380km stretch of Black Sea coastline, is one place where they have found a welcome retreat, says Tsonko Tsonev, mayor. “Some legendary rock groups play our summer festival, and then stay on for a quiet holiday,” Mr Tsonev says. “The yacht business is at an early stage of development and we don’t get crowds of pleasure boats up here.” Rock star Alice Cooper and members of Manowar, the heavy metal band, were seen in Kavarna recovering from marathon gigs at the Kaliakra rock festival in July.

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The total financial wealth of the households in Bulgaria has gone up with 23% during the last year, according to a report published by the analyst’s section of the consulting company Industry Watch.

Industry Watch specializes in monitoring and providing analysis on overall economic dynamics, political risks and the business environment in Bulgaria.

The financial wealth is composed of the cash amounts, bank deposits, different types of bonds, deposits in mutual funds and others.

According to Industry Watch’s data, the total financial wealth of the Bulgarian households in the middle of 2008 is BGN 32 M while the households’ debts with different financial institutions amount to BGN 10 B.

The research further shows that 57% of Bulgarians do not have any savings while the majority of those who save prefer to have their savings in bank accounts or in cash instead of using more complicated ways to invest.

40% of those who have stated that they are saving money, keep it in bank accounts or in cash, 7% invest in real estate and 11% to 12% invest in retirement funds, stocks and bonds.

Open Society Institute - Sofia is a non-governmental organization, acting for the benefit of the public to defend the values of the open society in Bulgaria and to support the integration of the country to the European Union.

Bulgaria’s Minister of Economy Petar Dimitrov and his Deputy Yavor Kuyumdzhiev presented the government’s export strategy for the period 2008-2013.

According to Dimitrov, the export strategy was approved by the Council of the governing coalition during its meeting in Bansko, and was to be submitted for approval to the Parliament.

The aim of the new strategy is to make Bulgaria’s trade balance positive by 2014. Currently the country’s trade deficit is 25,5% of its GDP.

The plan envisages that in 2018 Bulgaria’s exports will amount to EUR 75 B. In 2007 the country exported goods and services for under EUR 30 B.

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The Bulgarian Justice Ministry has sent for approval to all Ministries the project for changes in the Trade Law, as announced by the Justice Ministry’s press center.

The changes have the goal to reduce bureaucratic procedures and save time and expenses for the businesses in Bulgaria and are expected to have a positive influence on their economic activity and competitiveness.

The changes remove the report from an independent expert and the mandatory verification of the agreement to divide or merge a company, if all shareholders have agreed to the company’s transformation and the mandatory. Currently, when companies divide or merge they are also required to hire an independent while the overall procedures to transform a company can take up to 8 months even a full year.

The changes are in accordance with a directive of the European Commission. All countries members of the European Union must align their national legislature to the directive mandates by the end of 2008.

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The citizens of Bulgaria must realize that they should not allow the image of their country to be discredited by a handful of individuals, who are the foundation of organized crime in Bulgaria, according to the Vice President of the European Commission Günter Verheugen.

Verheugen, who is also the Commissioner for Enterprise and Industry, spoke during his visit to the Region of Veliko Turnovo. He appealed to the entire society in Bulgaria to take a stand against corruption.

The European Commissar further stated that during the last 24 hours he had discovered at least three great news about Bulgaria:

“Bulgaria would succeed to comply with the European Commission’s (EC) requirements from the last reports very quickly. At the end of the year Brussels will prepare another report about the economic growth and progress of the countries members of the European Union (EU). It will include assessments about Bulgaria that quite a few other countries would like to hear as well. For example, you a have a budget surplus, while many others are fighting to, at least, be at the 0 level; the state distributes only 40% of all revenues - yet another success and the unemployment rate is falling steadily. Your country has excellent relations with all others from the Black Sea area and can contribute to the stability in the region,” Verheugen stated in Veliko Turnovo.

The Commissar further added that in 1999, he had proposed that the EU initiates negotiations for Bulgaria’s accession and had never regretted his proposal.

The Mayor of Veliko Turnovo, Doctor Rumen Rachev presented Günter Verheugen with a gold badge with the city’s coat of arms and the symbolic key to Bulgaria’s old capital, owned only by the father of the “Perestroyka” Mikhail Gorbatchev and the famous Bulgarian sumo wrestler Kaloyan Mahlyanov.

Bulgaria will celebrate the 100th anniversary since its official declaration of independence from the Ottoman Empire with over 60 events spanning over a period of eight months.

“We must stage an impressive celebration of the 100th anniversary since the Declaration of Independence”, Bulgaria’s Prime Minister Sergey Stanishev said during the second sitting of National Committee organizing the events, which is chaired by him.

The PM pointed out the celebrations should emphasize on contemporary Bulgaria, and should reach out to the young people, because every society needs a sense of perspective and national goals.

In his view, the celebrations should not be limited only around their culmination in the city of Veliko Turnovo (old capital of Bulgaria) on September 22 but should be spread over time.

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Bulgaria’s Minister of Culture Stefan Danailov awarded at a special ceremony the Ambassador of the Kingdom of Belgium to Sofia Philip Beke for his contribution to the development and promotion of Bulgarian culture.

The Representative of the Delegation of Walloon-Brussels to Bulgaria and Romania Daniel Sotio received the same award.

Minister Danailov presented each of the two Belgian diplomats with a Golden Age Plaque and a Certificate of Recognition.

The Bulgarian Minister stressed the active cultural exchange between the two countries reminding of a recent event - the official presentation of the miniature model of the Rila Monastery as part of the Mini Europe Park in Brussels.

His Excellency Ambassador Beke said that his first interaction with Bulgarian culture was in 2002 during the Europalia Festival in Brussels, and that he had come to admire the uniqueness of Bulgarian talent ever since.

Bulgaria chose the Madarski Konnik (Madara Horseman) for the design of the future Bulgarian Euro coins after one-year debates in the framework of the national symbol campaign.

The relief near Bulgaria’s town of Shumen gathered a total of 25% of all citizens across the country, who voted for months to choose between the rose, the Rila monastery, Madara Horseman and the Cyrillic alphabet.

Bulgaria’s President Georgi Parvanov also attended the final discussion, which took place in the National museum of History.

The relief depicts a majestic horseman thrusting a spear into a lion lying at his horse’s feet while an eagle is flying in front of the rider and a dog is running after him. The scene symbolically depicts a military triumph and was engraved in the rock during Khan Tervel’s rule at the beginning of the 8th century.

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.

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.

Bulgarian economy ranks 39 in the world this year according to the annual ranking of different countries’ competitiveness conducted by the IMD World Competitiveness Yearbook 2008. Bulgaria has been evaluated along with other 55 countries, considered world economy leaders.

There are four main evaluation criteria for the international competitiveness of a country: economic performance, government efficiency, business efficiency, and infrastructure.

This is the third time Bulgaria has been included in the IMD World Competitiveness Yearbook ranking. The good news is that Bulgaria has moved up in the list. The country was ranked 41 in 2006 and 2007 due to problems created by bureaucratic obstacles for business development, unfair competition, corruption, poor infrastructure and lack of qualified work force.

According to the Center for the Study of Democracy in Bulgaria, the ranking has contributed a great deal for the establishment of a competitiveness policy on the part of the Bulgarian government.

Today the Center presented the results regarding Bulgaria’s ranking in the World Competitiveness Yearbook 2008. The press conference was held in Hall 1 of the Center. The meeting also focused on the government policies for the development of the economy, and the measures needed to be taken to increase the income of Bulgarian workers.

The Sofia Weekly

An exhibition dedicated to the Cyrillic Alphabet was open by Bulgarian Socialist Members of the European Parliament in Strasbourg on Wednesday. The exhibition, which was organized at the initiative of Bulgarian MEP from Atanas Paparizov, attracted the interest of the European deputies. Its opening was preceded by a lecture and a discussion on the topic “Multilinguism and Inter-Cultural Dialogue - Cyrillic Alphabet’s Message to Europe”.

The leader of the Party of European Socialists group in EP Martin Schulz was a special guest at the ceremony. “The contribution of the Cyrillic alphabet to the cultural diversity and inter-cultural dialogue of Europe, and to the European linguistic heritage, is especially important”, Schulz said.

The thirty pictures - one for each letter in the Bulgarian alphabet - will be exhibited at the ASP Building of the European Parliament.

www.News.Dnevnik.BG

Source: NSI /Graphics: Dnevnik

The Bulgarian economy expanded 6.2% in 2007 which in nominal terms translates to 56.52 billion BGN or 28.898 billion EUR, preliminary data of the central bank showed on Monday. This is the fourth year on the trot that the Bulgarian economy has grown by an annual margin larger than 6%. GDP per capita was reported at 3,735.5 EUR.

Q4 2007 economic growth was clocked at 6.9% over the year-ago period, a spurt that was made up for the softer growth patch in Q3 when the farming sector contracted sharply.

The GDP numbers surprised most analysts who were expecting a showing of 5.5% to 6%, mainly due to concerns about the reserved prognosis of the economic performance in the last quarter. The government had projected a Q4 rate of 6.4%. The pleasing GDP metrics were mainly due to strong domestic consumption and solid industrial growth in 2007.

The GDP share of industrial manufacture jumped 14% to 26.5%. The biggest growth contribution came from the processing industry (+15.4%), construction (+16.9%) and production of electricity and heating energy (+17.2%). The only decliner in terms of value added contribution to the economy last year was the mining industry.

The services industry posted a growth of 7.5%, increasing its share of GDP to 50%. Within the sector, the top performers were financial services (+34%), hotels and restaurants (+11.8), commercial intermediation (+6.6%). Transportation and telecommunications turned in a growth rate of 4.3%.

The farming industry, battered by inclement weather conditions, posted a record decline of 30% in 2007 with its GDP share shrinking to 5.1%.

The central bank also restated the 2006 GDP figure to 6.3% from 6.1% after receiving additional data form the customs administration, the balance of payments and others.