InvestBulgaria Agency investbgernment.bg

1. Bulgaria – your investment decision Dr. Stoyan Stalev Executive Director InvestBulgaria Agency www.investbg.government.bg

2. Strategic location Why Bulgaria Macroeconomic Indicators FDI Inflow Highly Skilled Labor Force Comparison between Bulgaria and Europe Business Sectors of Highest Potential for Investors Our achievements in figures Investment Promotion Act Investment Incentives in Bulgaria InvestBulgaria Agency Structure of the Presentation

3. 9 4 7 10 8 Pan-European Transport Corridors

4. Market access

5. Why Bulgaria • EU membership and NATO membership • Currency board • EU’s most favourable taxes: • 10% corporate income tax rate • 0% in high-unemployment areas • 10% flat tax rate on personal income • Europe’s most competitive operational costs • Well-educated and highly-skilled labour force • 45,000 Bulgarian students in Europe • Government financial support for priority investment projects • Linking Europe and Asia • Excellent climate, natural scenery, food and hospitality

6. GDP growth (%), 2002 – 2009 2009* * January - September 2009 Source: Bulgarian National Bank

7. Inflation,(annual change, %), 2004 - 2009 Source: Bulgarian National Bank

8. Unemployment rate (%), 2003 - 2009 * January - November 2009 Source: Bulgarian National Bank

9. Credit rating Source: Ministry of Finance

10. Record FDI inflow in 2006– 2008, EUR m * Preliminary Data, **January – November Source: BNB, IBA

11. Bulgaria leads CEE countries in terms of FDI to GDP indicator FDI to GDP, %, 2007 – 2008 Source: BNB, Bank Austria Creditanstalt

12. FDI stock by country,1996 – 2008, %, EUR m Source: BNB, IBA

13. FDI stock by sector, 1998 – 2008, %, EUR m 22% 19% 19% 16% 7% 6% 5% 6% Source: BNB, IBA

14. Language education in upper secondary general schools by city, 2008/2009 Source: National Statistics Institute

15. Students enrolment in vocational schools & technical universities for 2008/2009 3592 4323 Rousse Varna 4924 Sofia Gabrovo Plovdiv 16995 ~ 39,000– Total number of students enrolled in IT and Engineering related programs 4132

16. Enrolment in university IT and engineering programs for 2008/2009 Number of students, BA+MA, 2008/2009 Source: NSI

17. Students in university programs of intensive education in Economics, 2008/2009 Source: NSI

18. Comparison between Bulgaria and Europe Strong Fiscal Policy and Stable Currency General Government Balance, % Czech Republic Romania Slovakia Hungary Bulgaria *0% Forecast for 2009 Source: Economist Intelligence Unit

19. Comparison between Bulgaria and Europe Average monthly wages, Q2 2008, EUR Source: Economist Intelligence Unit

20. Corporate income tax rate, 2009 Comparison between Bulgaria and Europe * 0% for manufacturing companies in areas with high unemployment Source: IBA

21. Price level indices for all consumer goods and services, 2008, (EU27=100) Source: EUROSTAT

22. Manufacturing

23. Energy Sector

24. IT & BPO

25. Real estate & Tourism

26. Our achievements in figures August 2004 – September 2009 • We are assisting121certified investment projects • EURO 9.8bln planned investments • 53800 new jobs will be created Source: IBA

27. Investment Promotion Act • Promotion for initial investment in the following sectors • Manufacturing industry • Production of electricity from renewable sources • Computer technologies • Research and development • Education • Human health care

28. Investment classifications under the investment promotion act, (€ Million) Investment classes A and B depending on the value, region and sector allocation of the investment

29. Incentives under the Investment Promotion Act • All classes (A&B) • Information services and shortened administrative services • Preferential treatment upon acquisition of a right of ownership and limited real rights over real estate – private state or private municipal property • Financial supportfor vocational training of employees for the needs of the investment project • A class • Individual administrative services • Infrastructure support to the borders of the investment project site

30. Priority Investment Projects • No sector restrictions • Council of Minister decision Conditions: • investment more than 50 Million Euro • or investment in depressed regions • or investment in High-Tech • or investment in industrial zone construction • Incentives • VIP treatment • Special Incentive Package

31. 10%corporate income tax; 0% for manufacturing companies in areas with high unemployment 10% personal income tax, flat rate Opportunity for R&D expenditure write-off Depreciation of 2 years for computers and new manufacturing equipment 2-year VAT exemption for imports of equipment for investment projects over € 5 million, creating at least 50 jobs 5% withholding tax on dividends and liquidation quotas (0% for EU tax residents) Up to 1 year minimum salary and reimbursement of social/health care security for employing young people and disadvantaged people through the Employment Agency Investment incentives in Bulgaria

32. InvestBulgaria Agency InvestBulgaria Agency is the Government investment promotion arm, part of the Ministry of Economy, Energy and Tourism. IBA services: • Macroeconomic data on Bulgaria • Legal advice • Data on operational costs • Regional information: industrial zones and infrastructure, data on unemployment, skilled labour force and level of education • Recommendation of investment project sites • Identification of potential suppliers, contract manufacturers and joint-venture partners • Personalized administrative servicing • Liaison with central and local governments • Liaison with branch chambers and NGOs

33. InvestBulgaria Agency Sofia 1000, 31Aksakov Str. Phone: (+359 2) 985 5500 Fax: (+359 2) 980 1320 E-mail: iba@investbg.government.bg Web: www.investbg.government.bg