BULGARIA: ENTREPRENEURIAL MISSION, B2B MEETINGS
BULGARIA: “ROAD SHOW TARGET BALKANS” ENTREPRENEURIAL MISSION, B2B MEETINGS, BUSINESS DEVELOPMENT AND PARNERSHIP WITH BULGARIAN ENTERPRISES
CONFINDUSTRIA BULGARIA – P.zza Pozitano 2, Sofia 1000, Bulgaria
INTERNATIONAL CENTER OF UNICREDIT BULBANK – 8 Aksakov Str, Sofia 1000, Bulgaria
IBS in synergy with CONFINDUSTRIA BLUGARIA has the pleasure of receiving signs of interest to participate to the next ENTREPRENEURIAL MISSION in Sofia. The event is promoted by Confindustria Bulgaria to communicate the strengths of Bulgaria for the benefit of the single businesses and/or delegations of Italian enterprises through the Industrial Associations interested in investments in Bulgaria and in meetings with local partners of different product sectors.
FOR FURTHER INFORMATION ABOUT THE PARTICIPATION TO THE MISSION, THE DATE AND THE ORGANIZATION
Please contact IBS through the following contact form and it will be our responsibility to recontact you to obtain your interest and to provide all the information of detail or to bring you into contact with the Manager of Confindustria Bulgaria instructed to organize the event.
DEEPENINGS ABOUT BULGARIA TO FOLLOW:
- 1. OUTCOMES OF THE MISSION OF NOVEMBER 3 2016 IN SOFIA: description of the event, Entrepreneurial Mission Agenda and Delegation of the Italian Businesses participating at the event.
- 2. WHY INVESTING IN BULGARIA: the introduction to the macroeconomic framework, advantages among which low operating costs, tax benefits, strategic position in the heart of Balkans.
Continue the reading to obtain information about the opportunities. For immediate INFORMATION write us through the following FORM.
DEEPENINGS ABOUT BULGARIA :
1. OUTCOMES OF THE MISSION OF NOVEMBER 3 2016 IN SOFIA
Promoters CONFINDUSTRIA BULGARIA AND UNICREDIT BULBANK
The last entrepreneurial mission took place on November 3 2016, in the office of the International Center of Unicredit Bulbank. The promoters of the event and the Entrepreneurial Mission are Unicredit Bulbank and Confindustria Bulgaria which through the over 300 businesses associated is related to 5% of the total GDP of Bulgaria through the Businesses associated which create over 25.000 jobs, among which we can mention renowned Italian businesses such as Italcementi, Mapei, Unicredit, General, and many others SME.
During the last edition “Target Balkans: Entrepreneurial Mission in Bulgaria” has been recorded the participation of nine Italian businesses interested in the Bulgarian market , particularly active on the territory of Piacenza, motivated to the search for partners and business opportunity in the Bulgarian territory and in the neighboring countries with which Bulgaria makes trades. The event takes place as consecutively reported in the following concise description of the Agenda of the day, through a presentation of Bulgaria and the opportunities of business offered by the country, as a consequence of the event which took place in May 2016 in Piacenza during the incoming of a delegation of Bulgarian Businesses and Institutions in Italy.
The Italian businesses which participate in the entrepreneurial mission in Bulgaria operate in particular in the building industry ( building, reconstruction, restoration, sound conditioning, railings, security doors) in the furnishing industry ( interior and outdoor decoration, urban furniture, pools) and in the industry of facilities or technologies for energy saving. In particular, the day started with the address of the Institutions among which the General Director of the Unicredit Bulbank Enrico Minniti, subsequently the ICE Director of the Agency of Sofia Cinzia Bruno and President of Confindustria Bulgaria Pietro Luigi Ghia. Subsequently, the presentation continued with the address of Aldo Andreoni, Senior Banker, Corporate, Investment and Private Banking division, in which the macroeconomic framework of Bulgaria has been showed and in particular the building, the hotel and catering industry have been analyzed.
The rest of the event has been based on b2b meetings (about one hundred meetings) between the different Italian businesses in a trip to Sofia, and the over sixty Bulgarian businesses which participated with great motivation in the event.
ENTREPRENEURIAL MISSION AGENDA
h. 9.00 – 09.30 Businesses Registration and Welcome Coffee
h. 9.30 – 11.00
- Enrico Minniti, General Manager and Vice President of the board of directors of Unicredit Bulbank – Welcome speech
- Pietro Luigi Ghia, President of Confindustria Bulgaria- Welcome speech
- Cinzia Bruno, Director of Italian Trade Agency ITA Sofia
- Aldo Andreoni, Senior Banker, Corporate, Investment and Private Banking division – Presentation of the opportunities in Bulgaria
QUESTIONS AND ANSWERS
h. 11.00 – 12.30 B2B meetings with businesses associated to Confindustria Bulgaria already planned
h. 12.30 – 14.00 Launch and Networking
h. 14.00 – 14.30 Registration of Bulgarian associated businesses and welcome coffee
h. 14.30 – 15.00 Brief and presentation of the Italian Businesses by Roberto Tortelotti and Raffaele De Risi
h. 15.00 – 18.00 B2B meetings with the associated Bulgarian societies
DOWNLOAD : Entrepreneurial Mission Agenda
Witnesses and references of businesses which participated in the event are available. However, to win access to these information a manifestation of interest for the future mission in the phase of organization and a qualification through the business references are needed.
2. WHY INVESTING IN BULGARIA AND IN THE BALKANS
MACROECONOMIC FRAMEWORK IN BULGARIA
Bulgaria recorded a growth occurred in the triennial 2006-2008, and subsequently had a crisis in 2009. However, the data which refer to 2010 and 2011 reflect signs of recovery of the Bulgarian economy. Moreover, since 2012 a fundamental stabilization of the tendential development and a marked vitality on the trades, in particular on the export (export over the border) with foreign countries have been observed. Besides, a recovery of the domestic demand and a noticeable improvement of the coefficient of absorption of the doing business and European funds have occurred. The GDP (gross domestic product) on 2014 stood at EUR 42,8 billion ( Source: UniCredit Bulbank, 2016), recording an annual growth of 1.5%.
In 2015 Italy was promoted from third to second in the classification of the business partners of Bulgaria, after Germany, and only in the first six months of 2015 a 6,5% noticeable increase in foreign trade. The foreign trade between Italy and Bulgaria amount to over EUR 4 billion. The buying of Bulgarian goods from Italy gathered mainly in the mechanics, engineering, precision mechanics, durable instrumental goods, metals and clothing sectors. A good percentage of the businesses is addressed to the luxury footwear and footwear sectors, textile sector, equipment and machinery of general usage, and products resulting from oil and natural sources. For what concerns the total Italian foreign direct investments (FDI) in Bulgaria, they reached EUR 1,4 billion in 2014 and in particular the FDI net transactions for 2014 from Italy stand at around EUR 19 billion (MFA).
DOWNLOAD COUNTRY PROFILE (English): Bulgaria country profile (Source SACE, year 2016)
DOWNLOAD COUNTRY PROFILE (English):
DOWNLOAD (English): index from the dal National Statistical Institute, Republic of Bulgaria 2016
POLITIC AND ECONOMIC STABILITY IN BULGARIA AND DOING BUSINESS FAVOURABLE INDEX
• INTERNATIONAL AGREEMENTS : Bulgaria is a member state of the European Union, of the WTO (World Trade Organization) and NATO (North Atlantic Treaty Organization )
• CHANGE: the currency stability is guaranteed through the fixed change with euro of: 1 Euro = 1.96 BGN (lev)
• PUBLIC DEBT : Bulgaria has the second lower public debt on the European Union (around 17% of GDP) and one of the lower budget deficit of EU (2.1%) in 2011
• AVERAGE OF POLITICAL RISK 43% (Source: SACE, 2016)
• DOING BUSINESS INDEX : 38° of 189 countries (52 days to register a business)
• MAIN SECTORS OF OPPORTUNITY : infrastructures, means of transport, instrumental mechanics, energy, railways and building (complete list to follow)
• ITALIAN EXPORT IN THE PRECEDING YEAR : textile and clothing , instrumental mechanics, metals, means of transport, chemistry, others
• MAIN BUSINESS PARTNERS : Germany, Italy follows, then Spain and France
• ITALIAN EXPORT POTENTIAL INCREASE IN THE NEXT 3 YEARS : about EUR 240 billion.
TAX BENEFITS, LOW OPERATING COSTS, SYNTHESIS OF THE ADVANTAGES OF INVESTING IN BULGARIA
• Tax benefits : . The territory of Bulgaria commands one of the most favorable tax regimes of the European Union. The tax rate too for the businesses is fixed flat to 10%. The tax rate for natural persons stands at 10% . However, for the businesses which decide to settle and operate in areas placed in the development plan of the Government or at high unemployment the tax rate is 0% .
• Exemption from indirect tax : there are 2 years of exemption from indirect tax on the added value ( VAT ) for what concerns the import of machinery and equipment committed to investment projects in immobilizations or in fixed credit above EUR 5 billion which generate a return on employment, giving job to at least 50 employees.
• Dividend: tax rate 5% on the dividends and liquidation quota (0% for the residents of the EU).
• Cost of the work : Bulgaria has one of the most competitive costs of the work all over Central and eastern Europe.
• Lease and Users : Bulgaria boasts very low lease costs for different types of offices and users .
• Electricity : in Bulgaria the cost of electricity is very favourable, corresponding to 70% of the european average.
STRATEGIC POSITION OF BULGARIA IN THE HEART OF THE BALKANS
Bulgaria is placed in the heart of the Balkans, representing a natural strategic logistic hub :
• LOGISTIC CORRIDORS: five European corridors Pan-European Corridors (IV, VII, VII, XI, X) which cross the country and give to Bulgaria a remarkable strategic importance for what concerns the connectivity with EU countries.
DOWNLOAD: Pan-European Corridors (English)
• TRACECA : transport program which connects Europe with Caucasus and the Central Asian region.
• AIRPORTS: 4 main airports Sofia, Bourgas, Plovdiv and Varna.
• PORTS: 2 ports Varna and Bourgas and different ports placed in the Danube river.
QUALITY HUMAN RESSOURCES IN BULGARIA
• HUMAN SKILLS: the workforce is excellent and highly trained in Bulgaria and speaks more than a foreign language.
• MEDIAN AGE : 62.2 % of the Bulgarian population is in the working age (about 4.6 million people)
• HIGH SCHOLASTIC-EDUCATION LEVEL: each year 60.000 students graduate
• LANGUAGESKILLS: 98% of the students of the high school study a foreign language (in most cases English) and 73% of the students study a second foreign language (German is the first for importance, French to follow, then Spanish and eventually Russian)
• INTERNET : the speed of access and web surfing through the internet in Bulgaria is one of the first for speed in Europe, furthermore the diffusion of the service allows the connection and the access to the internet for almost the whole of population and institutions.
THE CHALLENGES OF THE FUTURE FOR BULGARIA
Although in the last years Bulgaria invested and worked to improve the quality of many aspects of its socio-economic structure, there are some crucial themes for a further development which require attention for the future:
• Continue with the strengthening of the infrastructural network
• Continue with a further extension of the support given to the businesses in particular in terms of access to services and infrastructures
• Improve further the reduction of bureaucracy and fasten the practices
• Reform the justice
THE ROLE OF ITALIAN INVESTMENTS IN BULGARIAN TERRITORY (FDI)
Italy, besides having a key role in Foreign trade as second business partner of Bulgaria with over EUR 4 billion of trade in the last year, is a leading figure in FDI (foreign direct investment) for the Bulgarian economy, thanks to the investments made in Bulgaria from some big Italian businesses and different SME (small and medium enterprises).
In the time lapse passed between 1996 and 2014 the FDI Italian direct investments in Bulgaria, according to the official data of the Bulgarian National Bank, reached a total amount of over EUR 1,4 billion, figure which puts Italy among the main first ten investors in Bulgaria ( after the Netherlands, Austria, Greece, England, Germany, Cyprus, Russia, Switzerland and United States of America).
There is a solid delegation and a significant presence of big Italian enterprises like Enel, Assicurazioni Generali, Mapei, Edoardo Miroglio, Banca Unicredit and Rigoni di Asiago. Furthermore, also the presence of SMEs (Italian small and medium enterprises) of which 300 businesses associated to Confindustria Bulgaria is particularly intense.
The presence of Italian Businesses in Bulgaria has a significant impact also on the global national budget, contributing for around 5% towards the national GDP (gross domestic product), with about EUR 2 billion of annual turnover with consequences on employment for 25.000 jobs.
HIGHLY COMPETITIVE LABOR COST IN BULGARIA, AMONG THE LOWEST IN EUROPE
The labor cost in Bulgaria is one of the lowest among all the European countries. Actually, the average labor cost in this moment stands at around 490 euros per month (NSI data, National Statistical Institute Republic of Bulgaria, 2015).
Obviously, this is an average data, and in many areas of the country wages stand at lower salary levels. However, these areas of the country aren’t always provided with the same infrastructural level of the big urban centers or the main cities of Bulgaria.
At the same time, an excellent quality of the labor force can be detected, especially in the niches sectors and in the technical and informational fields. Some local realities like Plovdiv offer in particular excellent proportions between the labor cost and the quality of the work carried out by the staff.
TAX SYSTEM IN BULGARIA
An aspect that makes Bulgaria an attractive territory is also the tax field. In effects, for what concerns the taxation of the business and individuals Bulgaria offers a flat tax, with a flat rate at 10% for businesses and individuals.It is, as is the case for labor cost. One of lowest tax burdens in the EU (European Union). For what concerns indirect taxes, the VAT standard rate (tax on the added value) applied is equivalent to 20%, but for some specific cases a reduction of the rate to 9% is covered. The different executive governments ruling in the last years reaffirmed in different occasions that the flat tax remains also for the future one of the principles and strategic assets which will drive the fiscal policy of the country.
TRANSPORTS IN BULGARIA
Bulgaria represents an ideal bridge between UE and the countries of the Balkans, Turkey inclusive, as it is placed at the center of the southeast Europe. The country is a regular transitional point for five Pan-Europeans corridors (IV, VII, VIII, IX e X) and is part of TRACECA (Transport Corridor Europe Caucasus Asia) AN INTERNATIONAL ORGANIZATION created with the aim of promoting an effective infrastructural network between Europe, Caucasus and Central Asia.
The corridor VIII in particular, will link Bulgaria to Italy thanks to the ports of Albania. At the moment the Bulgarian government is investing in the adaptation of the railway and motorway networks. In effects the “Trakia” motorway, which is able to link the capital Sofia to the second most important city of the country, that is Plovdiv, and to the port of Burgas in the Black sea, has been finished. The “Struma” motorway stretch to follow, which will link Bulgaria to Greece. For what concerns the air transports the cities of Sofia, Plovdiv, Burgas and Varna are provided with international airports.
Moreover, in addition to national-flag airlines also the low-cost companies broke into the Bulgarian market strengthening the competition in the civil aeronautical sector. Eventually, it is fair to remember that Bulgaria has two of the most important ports of the Black Sea in Varna and Burgas and that the North of Bulgaria it’s part of the fluvial transport system of the Danube. This logistic asset, thanks to the Main Canal, allows the ships to travel and to cover directly the stages from the Black Sea to the North Sea.
HOW THE INSTITUTIONS AND THE EUROPEAN FUNDS AFFECT BULGARIA
The investments of the foreign countries in Bulgaria represent one of the main engines for the growth of GDP and the country. Therefore the attention for the international entrepreneurship is high. The membership to EU (European Union) makes the legal system of the country similar to Italian and other European countries standards. The Europan funds too, which have a great impact on the country, are very important. For the period 2007- 2013, EUR 6,8 billion were earmarked to Bulgaria through the EU Structural FundS. Particularly interesting and effective were also the funds allocated and disbursed through the Competitiveness Operative program, funds earmarked for private businesses. For the European Commission planning period of the European Structural Funds 2014-2020, EUR 7,4 billion have been allocated for Bulgaria, an important amount divided into 7 operative programs:
- Transports EUR 1,6 billion
- Environment EUR 1,5 billion
- Areas on the increase EUR 1,3 billion
- Innovation and competitiveness EUR 1,2 billion
- Human Ressources EUR 0.9 billion
- Governance EUR 0,2 billion
- Science and Education EUR 0,5 billion
To these funds follow the EU resources coming from the Common Agricultural Policy (CAP) and others funds coming from the Common Fisheries Policy (CFP) which allocate EUR 7,5 billion.
PRODUCT SECTORS OF INTEREST IN BULGARIA :
- Agricultural and Food sector
- Textile sector and clothing
- Leather industry and footwear
- Wood industry and furniture
- Energy, renewable energies and natural resources
- Chemical and pharmaceutical industry
- Rubber and plastics manufacture
- Glass and ceramic
- Metals manufacture
- Mechanics, precision mechanics, instrumental and durable goods
- Transport and logistics
- Constructions, building material, real estate and property activities.
- Other manufacturing industries
- Insurance and bank services
- Commerce and marketing
- Environment and ecology
- Informational services, ICT, communication
- Services to businesses
- Tourism, refreshment, hotels
PROMOTERS AND PARTNERS OF THE INITIATIVE:
P.zza Pozitano 2, Sofia 1000, Bulgaria
Tel: +359 (0) 2 8901420;
Fax: +359 (0) 2 8901424
INTERNATIONAL CENTER OF UNICREDIT BULBANK
1000 Sofia, 8 Aksakov Str.
ITA BULGARIA (Italian Trade Agency)
Bul. knyaghinya Maria Luisa, 2
Business Center TZUM, 1000 Sofia Bulgaria
OTHER PARTNERS OF CONFINDUSTRIA, 2016
- CONFINDUSTRIA BALCANI
- SIMEST (WORLDWIDE ITALIAN ENGAGEMENT)
- BE BULGARIA ENGINEERING
- ASSICURAZIONI GENERALI
- UNIVERSITY OF NATIONAL AND WORLD ECONOMY
- IL SOLE 24 ORE BUSINESS SCHOOL
SOURCES FOR THE ARTICLE: “Entrepreneurial Mission in Bulgaria”
- Confindustria Bulgaria
- International Center of UniCredit Bulbank
- ITA (Italian Trade Agency)
- SACE Country Risk Map
- Ministry of Transport GOV Bulgaria
- National Statistical Institute Republic of Bulgaria
- TRACECA (Transport Corridor Europe Caucasus Asia),
- EU STRUCTURAL FUNDS