The foreign direct investments in Bulgaria increased by 1.9% in the first half of 2015 to EUR 800 million. The results are due to the good macroeconomic environment and political stability in this country, the Executive Director of InvestBulgaria Agency Stamen Yanev told Radio Bulgaria. Different types of foreign investors are making inquiries in various sectors of the national economy, but most inquiries regard the production of parts and components for the large car manufacturers. The IT industry, tourism, outsourcing services, logistics, transport and the food industry are also within the scope of the investors’ interest.

Can Bulgaria rely on investors from other regions and countries, apart from the European states?

“I hope that the ranking of the top 10 foreign investors in Bulgaria would change slightly,” Stamen Yanev comments. “Of course, Bulgaria has traditional partners such as Germany and Italy. However, we are making great efforts to attract investors from Asia, because the big money is currently on this continent, despite the recent turbulence registered on their financial markets. That is why we are focused to bring more investments from China. For the purpose, we are planning to launch the so-called Center of Excellence, which would help us gather more information about these countries and attract more capital from that region.”

In 2014 German companies withdrew some EUR 300 million from their Bulgarian subsidiaries. Stamen Yanev contends, however, that we can not speak of a permanent reflux of German capital from Bulgaria. During the last visit to Germany Mr Yanev and Bulgaria’s Minister of Economy Bojidar Loukarsky met with a series of German firms which intended to do business in Bulgaria. We made a second meeting with the German Multivac company, which is a world leader in the manufacture of packaging machinery and equipment. It is interesting to note that Multivac is a family-owned company. The family business is usually quite conservative and if such a company decides to expand its business and move to Bulgaria, we are confident that the German investments would again come to Bulgaria, even if there was a temporary reflux of German capital from that country, Mr Stamen Yanev further pointed out.

In Mr Yanev’s view, Europe’s new investment plan Juncker enables those Bulgarian companies, which fail to find public financing, to receive European funds. It is important to note that the companies must apply with their projects directly to the European Investment Bank. They have to come up with interesting projects. Moreover, these projects must not be highly-commercial and should not guarantee quick and easy profit, Stamen Yanev went on to say.

What are the biggest obstacles for foreign investments?

“Recently the Bulgarian cabinet received a report from the Ministry of Finance, which included 10 problematic fields that hamper foreign investments to Bulgaria. The corporate tax in this country is low. Bulgaria has a very good geographical location and has established good transport corridors with third countries. However, we have problems regarding the implementation of the law in Bulgaria and the relations between the local and the central authorities. Sometimes the central authorities are willing to assist a given investor, but the local authorities are acting very independently and fail to take documents such as the Class A investor document into consideration. They often delay the application procedure. However, the business can not wait for too long. That is why the authorities undertook a series of measures aimed at reducing the administrative burden and making the process of certification simple.”

Some of the encouraging measures in regions with high unemployment regard the opportunity of the companies to purchase land without public procurement orders and tenders. The state authorities can also support given investment through building the public infrastructure to the production site, or to provide financial assistance by paying part of the training, or part of the social security contributions of the newly-employed personnel.

Bulgaria’s Northwestern region lacks foreign investments? How the authorities can overcome the regional imbalance?

“The Northwestern region is our top priority. Some of our measures regard the awarding of additional bonus points to each European project fulfilled in this region. Another good measure that encourages foreign investments in that region is linked with the implementation of a zero percent tax rate levied on profits reinvested in such regions with high unemployment. The InvestBulgaria Agency directs given industries typical for the region of Northwestern Bulgaria to invest there. These are mainly companies from the chemical industry and firms manufacturing products and sub-products from chemical substances. I hope that we will soon overcome the negative trends in this region and Northwestern Bulgaria will show its full potential.”

English version: Kostadin Atanasov