Bulgaria

BULGARIA

The main sectors of Bulgarian economy are services (59 percent of total GDP), followed by industry (24 percent) and agriculture (5 percent). On the expenditure side, household consumption is the main component of GDP and accounts for 63 percent of its total use, followed by gross fixed capital formation (21 percent) and government expenditure (17 percent). Exports of goods and services account for 65 percent of GDP while imports account for 66 percent, subtracting 1 percent of total GDP. Bulgaria exports mostly fuels, manufactured goods (clothing, footwear), machinery and transport equipment and chemicals. Bulgaria’s main exports partners are Germany, Turkey, Italy, Greece and Romania. Bulgaria imports fuels, machinery and transport equipment, metals, raw materials. Bulgaria’s main imports partners are Russia, Germany, Romania and Italy.

Agriculture

Bulgaria enjoys excellent natural conditions for developing the agriculture and forestry sector. Cultivated agricultural land occupies about 4.9 million hectares or 44% of the total territory of the country. The favorable climate for crop production and the availability of agricultural land and long traditions have resulted in well-developed plant growing and animal breeding. Other advantages are the low labor costs and the high-schools and colleges offering training in modern farming and animal breeding. Foreigners cannot own land, but the Foreign Investment Law removed restrictions on the acquisition of land by locally registered companies with foreign participation. Among the main crops produced are tomatoes, pepper, tobacco, grapes, wheat, maize, beans, potato, sunflower, peaches, apricots, apples, melons, and nuts. There are traditions in the sheep, pig and cattle breeding, poultry farming, and bee-keeping. Good opportunities in the sector exist for the creation of total production chains through a combination of selected companies in clusters covering primary sector, processing, sales and distribution. An important advantage of the sector is the presence of well-established food research and development institutions. Within Bulgaria a special EU support program (SAPARD), provides for a 50% investment subsidy for investment projects in agriculture. Bulgarian agriculture is one of the hottest investment sectors in Bulgaria! During the next 5-10 years massive growth is expected.

Food and Beverage

Bulgaria enjoys excellent natural conditions for developing the agriculture and forestry sector. Cultivated agricultural land occupies about 4.9 million hectares or 44% of the total territory of the country. The favorable climate for crop production and the availability of agricultural land and long traditions have resulted in well-developed plant growing and animal breeding. Other advantages are the low labor costs and the high-schools and colleges offering training in modern farming and animal breeding. Foreigners cannot own land, but the Foreign Investment Law removed restrictions on the acquisition of land by locally registered companies with foreign participation.

Among the main crops produced are tomatoes, pepper, tobacco, grapes, wheat, maize, beans, potato, sunflower, peaches, apricots, apples, melons, and nuts. There are traditions in the sheep, pig and cattle breeding, poultry farming, and bee-keeping.

Traditionally, Bulgaria has had a leading position in exports of grapes, oriental tobacco, tomatoes, apricots and other agricultural products to European markets.

Good opportunities in the sector exist for the creation of total production chains through a combination of selected companies in clusters covering primary sector, processing, sales and distribution. An important advantage of the sector is the presence of well-established food research and development institutions.

Outsourcing

Outsourcing to Europe or the Western world was not considered a possibility until recently. Many countries in Eastern Europe have started to offer outsourcing services lately and are the preferred partner for companies based out of Western Europe and the US.

One of the main reasons in favor of outsourcing to Eastern Europe and Bulgaria in particular is that cultural differences in the way business is executed are minor. Moreover, the distance to Bulgaria from anywhere else in Europe is not more than 2 or 3 hours by plane.

Other interesting facts about Bulgaria:

– Bulgaria is an European Union and NATO member

– The country is stable politically and economically. In its annual 2002 report, the European Commission assessed Bulgaria as a fully functional market economy, with a high degree of macroeconomic stability and working market mechanisms.

– The Bulgarian workforce is well educated with a 93 percent literacy rate.

– The current trend is that well educated Bulgarians attain worldwide experience abroad and return to their home country.

– Because of their education and expertise, Bulgarians are well suited to work in multinational organizations.

Construction

Construction is everywhere in Bulgaria. Most Bulgarian major cities and resort destinations have seen a boom in construction in recent years. Construction of residential, commercial and industrial properties is a very attractive investment proposition in Bulgaria since construction and land costs are fairly low, while the demand for modern and high quality real estate in booming. In addition, Bulgarian and foreign banks are competing hard in lending money to businesses and households for the purchase of real estate in Bulgaria.

Energy

The Bulgarian energy sector is undergoing a major overhaul.

-Improvement of Energy efficiency

-Construction of new facilities

-EU directives for at least 20% renewable energy by the year 2020

-Environment improvements

The European Union has set a directive requiring its members to to produce at least 20% of their electricity by environmentally clean and renewable sources. Certain areas of Bulgaria have favorable wind conditions and investment in wind power generators are showing good returns. A sizeable portion of Bulgaria’s land area receives medium levels of solar radiation.