This is an article that uses information from material published on the official website of the British government www.gov.uk. In it, the subjects of Her Majesty the Queen of Great Britain has been informed extensively about the possible business risks in Bulgaria if they decide to make a company in the country. An extremely beautiful and full of business perspective country! But that’s just our opinion. Let’s see if it will coincide with that of British government experts…
Political Structure of the Country
In the beginning, facts about Bulgaria’s political system were reported. It is pointed out that Bulgaria is a parliamentary republic and is run by a coalition headed by Boyko Borisov. He is a Prime Minister and leader of the GERB party. The ruling center-right party has been in power in Bulgaria since 2009. For 10 years Boyko Borissov has lost only once elections – the presidential in 2016. We will add that Boyko Borissov and the GERB party also won the last elections to the European Parliament in 2019.
The main priorities of the coalition are the observance of fiscal discipline based on the flat rate tax. And also border security, enhancing Bulgaria’s energy security and continuing with judicial reform. Next parliamentary elections are due in March 2021.
There is also a passage in the material devoted to the President of the Republic, the former military pilot, General Rumen Radev. He was elected by the opposition Socialist Party BSP and took office in 2017 for a 5-year period until 2022.
Follow basic economic facts and economic development of Bulgaria. For example, it is reported that Gross Domestic Product (GDP) is € 47.3 billion (2016). As well as other data such as:
GDP per capita: € 6 644;
GDP (real annual) growth: 3.4%;
Exports: € 22.6 billion;
Imports: € 24.4 billion.
Long-term credit ratings: Moody’s: Baa2 stable (2017), S&P: (Positive) (2018), Fitch: BBB (2019).
As well as other data are quoted. Major industries for Bulgaria include: energy, oil and gas, machine building, info tech and food processing. The main trading partners of the country are Germany, Romania, Italy, Turkey and Greece. Trade Balance: € -1.8 billion
Current Account balance: 4.2% of GDP
Fiscal Balance: 1.6% of GDP
According to experts from www.gov.uk Bulgaria’s geographic position, low cost and good technical skills make Bulgaria attractive as an outsourced manufacturing base.
Such as, Bulgaria has benefitted from increased service off shoring (including call centres, accountancy back office, software programming, IT support and architectural design services).
Bulgaria has been following an international currency board since 1997. Since then, the currency of the country, the Bulgarian lev(BGN), has been tied to the euro. This guarantees a disciplined and stable monetary system.
Economic development has been steady over the last decade. Private consumption has a key role and provides the country with a GDP growth of around 3% in recent years. Growth is expected to continue with higher disposable income and higher employment rates. Fiscal policy is expected to remain tight, while improving growth prospects in the Eurozone will help boost net exports.
EU funds, IMF and Other IFI Programmes
About EUR 10 billion for the period 2014-2020 is foreseen for Bulgaria under the EU structural and investment funds. Of these, at most € 3.57 billion is ERDF (European Regional Development Fund), € 2.28 billion Cohesion Fund, € 1.52 billion ESF (European Social Fund) and others.
The last mission of the International Monetary Fund found that the Bulgarian economy is developing steadily and is relatively resistant to possible external shocks. Macroeconomic development is steady and optimistic. Unemployment is at its lowest levels in the past 9 years. Deflation showing signs of gradual easing. The IMF mission has welcomed the completion of the Asset Quality Review (AQR) and banking stress tests. According to them, this is another step in strengthening the banking system of the country and the ability of the national bank – the BNB to manage and control it.
The World Bank, as well as the EBRD, also appreciate the efforts of the government and its financial institutions to enhance competitiveness through improved efficiency, governance and innovation.
The assessment of Bulgaria’s economic situation and prospects for encouraging those willing to do business in the country. And it would be even better if there was someone to organize and channel the start of such an undertaking. By submitting the necessary documents for the registration of the company, for example, the opening of bank accounts, etc. To do all these corporate services, do not hesitate to contact VD&A Law Firm.