2011 Investment Climate Statement
Bureau of Economic, Energy and Business Affairs
March 2011
Report

Overview of Foreign Investment Climate

Bulgaria has a favorable foreign investment regime, including low, flat corporate and income taxes. Promising sectors for foreign investors include: information technology, telecommunications, environmental technology (including water and waste water infrastructure), and agriculture (including beverage/processed foods industry). European Union integration has opened new markets for Bulgarian-produced goods and services. Bulgaria’s workforce is generally well-educated and the cost of labor is the lowest in the EU. The judicial system suffers from high caseloads and frequent delays. There are no general limits on foreign ownership or control of firms nor means of screening or restricting foreign investment in Bulgaria. Foreign firms are not denied national treatment and there are no significant reports of discrimination against foreign investors. There are no requirements that nationals own shares of foreign investment and no laws authorizing nor firms to limit foreign investment. The country’s geographic position places it at the crossroads of Europe, the Middle East, and the former Soviet Union. A stable U.S. ally, Bulgaria is a member of NATO, the EU, and the WTO. Transparency International’s Corruption Perception Index for 2010 ranked Bulgaria 73 out of 178 countries surveyed and the government has demonstrated political will to root out corruption and organized crime.

Investment Trends and Policies

Sound economic performance and political stability have enabled Bulgaria to attract leading foreign investors. Gradual convergence with the EU common market, fiscal prudence, and a national currency pegged to the Euro have provided stability and incentives for increased trade and investment. After several years of solid growth, the global financial crisis caused a rapid decline in new foreign direct investment (FDI). FDI inflow dropped to practically zero in 2010 following record highs in the preceding years. Low investment, weak domestic demand, and reduced government spending contributed to a GDP contraction of 4.9 percent in 2009. Sluggish domestic demand continued to hold back the economy, which was expected to grow only slightly in 2010. The government projected 3.6 percent growth in 2011 based on an expected uptick in exports. However, the local economy will likely remain vulnerable due to an unstable external environment, tight government spending, and under-utilization of EU development funds.

The 2004 Investment Promotion Act stipulates equal treatment of foreign and domestic investors. The law encourages investment in manufacturing, renewable energy, and high-technology, as well as in education and human resource development. It creates investment incentive by helping investors purchase land, provides state financing for basic infrastructure and for training new staff, and provides tax incentives and opportunities for public-private partnerships with central and local government. The law explicitly recognizes intellectual property and securities as foreign investments.

Common Forms of Investment

The most common type of organization for foreign investors is a limited liability company. The required minimum for registering a limited liability company is one Euro. Other typical corporate entities include joint stock companies, joint ventures, business associations, general and limited partnerships, and sole proprietorships.

Foreign investors must comply with the 1991 Commercial Code, which regulates commercial and company law and the 1951 Law on Obligations and Contracts, which regulates civil transactions.

The 2003 Law on Special Purpose Investment Companies (SPIC) allows for public investment companies in real estate and receivables, essentially real estate investment trusts (REITs). Since a SPIC is considered a pass-through structure for corporate income tax purposes, at least 90 percent of its net income must be distributed to shareholders as taxable dividends. A SPIC must apply for an operational license from the Financial Supervision Commission within six months of registration.

Investment Barriers

Foreign investors often encounter the following problems: a sluggish government bureaucracy, poor infrastructure, corruption, frequent changes in the legal framework, lack of transparency, and pre-determined public tenders. In addition, a weak judicial system limits investor confidence in the courts' ability as an enforcement mechanism.

U.S. industry reports growing intellectual property rights (IPR) concerns in Bulgaria, particularly with respect to increased internet piracy, ineffective cooperation between Bulgarian IPR officials and the private sector, and delays and conflicts of interest in enforcing patent protection. Current Bulgarian legislation effectively bans all biotech crop trial and production, and imposes restrictions on soy or other plant proteins in meat products.

EU accession requirements have led to the adoption of a constitutional amendment which, beginning in 2014, will allow EU citizens and entities to acquire real property, while all other foreigners will be able to do so only on the basis of an international agreement ratified by the Bulgarian Parliament. This favors EU investors over those from the United States. There are no legal restrictions against real property acquisition by locally-registered, majority foreign-owned companies, which is the method most foreigners use to purchase property in Bulgaria.

In one instance an investor in the energy sector encountered difficulties connecting a new power production facilitys to the national electric grid. Initially it was due to resistance at the municipal level and later due to failure of the national electric company to install the necessary grid connection. In another case, the national electric company failed to honor a commitment to upgrade the grid, resulting in the operator’s inability to use all power offered to it by the investor. Also, Bulgaria has an excess of renewable energy proposals that significantly exceeds capacity of the national electricity grid.

Privatization

Bulgaria completed its major privatizations in the 1990s and early 2000s, and the privatization program is gradually phasing out. All state-owned property is considered for privatization, with the exception of a specific list of companies including water management companies, state hospitals, and state sports facilities. Municipally-owned property is considered for privatization upon publication of the municipal privatization list in the State Gazette. Privatization methods include: public auctions, public tenders, and public offerings. Foreign companies, including state-owned ones, may purchase Bulgarian state-owned firms and the privatization process is generally fair and transparent. The 2010 Privatization and Post-Privatization Act created a single Privatization and Post-Privatization Agency which makes privatization decisions regarding: property with 50 percent or more state ownership; hospital privatization; privatization of equity and shares in companies 50 percent or more owned by the state; privatization of state-owned property valued between BGN 10,000 (USD 6,700) and BGN 500,000 (USD 337,000) following approval from the Minister of Regional Development and Public Works; and privatization of state-owned property valued over BGN 500,000 (USD 337,000) following approval from the Council of Ministers.

The Privatization and Post-Privatization Agency also oversees the implementation of privatization contracts and ensures that non-price privatization commitments (employee retention, technology transfer, environmental liability, and investment) in the privatization selection criteria are honored.

In 2011, the Bulgarian government plans to privatize a district heating plant in Shumen (Northeast Bulgaria); two military factories in Sofia and Sopot, provided the parliament approves their privatization strategies; the free trade zones in Burgas and Ruse; the transit zone in Varna; and the state tobacco holding company.

Concessions

Under the 2006 Law on Concessions, the state is authorized, on the basis of a concession agreement, to grant private investors a partial monopoly. Concessions are awarded on central and/or local government property on the basis of a tender and are issued for up to 35 years. The concession period may not be extended beyond this time limit. The decision for awarding a concession may be appealed before the Competition Protection Commission. There are three main concession categories: construction, services, and mining and exploration. Potential fields for concessions may therefore include construction of roads, ports, and airports; power generation and transmission; mining; petroleum exploration/drilling; telecommunications; forests and parks; beaches; and nuclear installations.

Third-party Rankings


If a scroll bar appears below the following table, swipe the table to move left/right of the dashed line.

Index Year Ranking

Transparency International Corruption Perception 2010 73 (out of 178)

Heritage Foundation Economic Freedom 2010 75 (out of 179)

World Bank Doing Business: Overall 2011 51 (out of 183)

World Bank Doing Business: Starting a Business 2011 43 (out of 183)

World Bank Doing Business: Dealing with Licenses 2011 119 (out of 183)

World Bank Doing Business: Registering Property 2011 62 (out of 183)

World Bank Doing Business: Getting Credit 2011 6 (out of 183)

World Bank Doing Business: Protecting Investors 2011 44 (out of 183)

World Bank Doing Business: Paying Taxes 2011 85 (out of 183)

World Bank Doing Business: Trading across Borders 2011 108 (out of 183)

World Bank Doing Business: Enforcing Contracts 2011 87 (out of 183)

World Bank Doing Business: Closing a Business 2011 83 (out of 183)

Conversion and Transfer Policies

Foreign exchange is freely accessible. The 2007 amendments to Bulgaria’s Regulation 10 of the 1999 Foreign Currency Act stipulate that anyone may import or export up to EUR 10,000 (USD 13,180) or its foreign exchange equivalent without making a customs declaration. Importing or exporting over EUR 10,000 or its foreign exchange equivalent must be declared. Exporting over BGN 25,000 (USD 16,850) in cash requires a declaration about the source of the funds, supported by documents certifying that the exporter does not owe taxes. No tax certificate is required for foreigners exporting the cash equivalent of BGN 25,000 or greater provided the amount is equal to or less than the amount declared when imported. Bulgarian law requires all international payments over BGN 25,000 to be executed via bank transfer with supporting documentation detailing the purpose of the transaction.

Expropriation and Compensation

Private real property rights are legally protected by the Bulgarian Constitution. Only in a case where a public need cannot be met by other means, the Council of Ministers or a regional governor may expropriate land provided that the owner is compensated at fair market value. No taxes are levied on the expropriation transaction. Expropriation actions of the Council of Ministers can be appealed directly to the Supreme Administrative Court on the legality of the action itself, the property appraisal, or the amount of compensation. A regional governor's expropriation can be appealed in the appropriate local administrative court. In its Bilateral Investment Treaty (BIT) with the United States, Bulgaria committed itself to international arbitration in the event of expropriation and other investment disputes.

Dispute Settlement

The Judicial System

The Bulgarian Constitution serves as the foundation of the legal system and creates an independent judicial branch comprised of judges, prosecutors, and investigators. Despite reform efforts, the judiciary suffers from serious backlogs and overly formalistic or inefficient procedures that hamper the swift and fair administration of justice. Corruption remains a serious problem. The judiciary was ranked this year by Transparency International as the most corrupt institution in the country, with opinion polls calling it the country’s weakest link. Although there is little reliable data, many believe that some courts are beholden to particular business interests and subject to political influence.

There are three levels of courts. The 113 regional courts exercise jurisdiction over civil and criminal cases. Above them, 29 district courts (including the Sofia City Court) serve as courts of appellate review for regional court decisions and have trial-level (first-instance) jurisdiction in serious criminal cases and in civil cases where claims exceed BGN 25,000 (USD 16,850), excluding alimony, labor disputes, and financial audit discrepancies, or in property cases where the property’s value exceeds BGN 50,000 (USD 33,700). Five appellate courts review the first-instance decisions of the district courts. The Supreme Court of Cassation is the court of last resort for criminal and civil appeals. The Supreme Court of Administration rules on local and national government decisions and the Constitutional Court, which is separate from the rest of the judiciary, issues final rulings on constitutional questions and challenges.

Bulgaria has effective means of enforcing property and contractual rights. The government’s record of handling investment disputes is is generally slow and bureaucratic but usually the issues are resolved. There are no outstanding investment disputes involving U.S. companies.

Bankruptcy

The 1994 Commercial Code Chapter on Bankruptcy provides for reorganization or rehabilitation of a legal entity, maximizes asset recovery, and provides for fair and equal distribution among all creditors. The law applies to all commercial entities, except public monopolies or state-owned companies established by a special law. Bank failures are regulated under the Credit Institutions Act, while the 2005 Insurance Code regulates insurance company failures.

Non-performance of a monetary obligation must be adjudicated before the bankruptcy court can determine whether the debtor is insolvent. There is a presumption of insolvency when the debtor is unable to perform an executable obligation under a commercial transaction or related commercial activities, has suspended all payments, or is able to pay only the claims of certain creditors. The debtor is deemed over-indebted if its assets are insufficient to cover its short-term monetary obligations.

Bankruptcy proceedings may be initiated on two grounds: the debtor’s insolvency, or the debtor’s excessive indebtedness. Under Part IV of the Commercial Code, debtors or creditors, including state authorities such as the National Revenue Agency, can initiate bankruptcy proceedings. The debtor must declare bankruptcy within 30 days of becoming insolvent or over-indebted. The 2010 amendments to the Commercial Code increased protection for creditors in bankruptcy proceedings by prohibiting a debtor from falsifying the date of insolvency to avoid claims after a certain date. The application for bankruptcy submitted by the debtor is published in the Commercial Register, thus providing all creditors and contractual partners with information about the bankruptcy proceedings. Should any creditor or contractual partner file a request for bankruptcy in court, such a claim would supersede the debtor’s request and a court would resolve the dispute between the two requests.

Once insolvency is determined, the court appoints an interim trustee to represent and manage the company, take inventory of property and assets, identify and convene the creditors, and develop a recovery plan. At the first meeting of the creditors, a trustee is nominated; usually this is just a reaffirmation of the court appointed trustee.

Bankruptcy proceedings supersede other court proceedings initiated against the debtor, except for labor cases, enforcement proceedings, and in cases related to receivables securitized by third parties’ property. Such cases may be initiated even after bankruptcy proceedings begin. The scope of the parties which may seek protection against a debtor’s unfair activities and appeal the court decision to initiate a bankruptcy proceeding is extended to third parties with securities, when securities have been entered in public registers before the date of the claim starting the bankruptcy procedure.

Creditors must declare all debts owed to them within one month of the start of bankruptcy proceedings. The trustee then has seven days to compile a list of debts. A rehabilitation plan must be proposed within one month after publication of the list of debts in the Commercial Register. The 2010 amendments to the Commercial Code limit the application of the rehabilitation plan to debts approved up to the moment of submission of the rehabilitation plan.

After creditors' approval, the court endorses the plan, terminates the bankruptcy proceeding and appoints a supervisory body for overseeing the implementation of the rehabilitation plan. The court must endorse the plan within seven days. The court may renew the bankruptcy proceedings if the debtor does not fulfill its obligations under the rehabilitation plan. June 2003 legislation provided for examinations for individuals applying to become trustees and obliged the Ministers of Justice and Economy to organize annual training courses for trustees. In June 2006, the ministries of Justice, Economy, and Finance published a regulation on the procedure for appointment, qualification, and control over the trustees.

The methods of liquidating assets were also revised by the June 2003 legislation to establish a legal framework for selling assets that accounts for the character of bankruptcy proceedings, thus avoiding the need to apply the Civil Procedure Code. The regime includes rules requiring publicity for asset sales.

Execution of Judgments

To execute a judgment, a final ruling must be obtained. The court of first instance must then be petitioned for a writ of execution (based on the judgment). On the basis of the writ of execution, a specialized category of professionals, execution agents, seize the assets or ensure the performance of the ordered action. Both private and state execution agents operate in Bulgaria. A new Civil Procedure Code, effective since March 2008, streamlined civil procedures, including the execution of judgments. Foreign judgments can be executed in Bulgaria. Execution depends on reciprocity, as well as bilateral or multilateral agreements, as determined by an official list maintained by the Ministry of Justice. The United States does not currently have reciprocity with Bulgaria; Bulgarian courts are not obliged to honor decisions of U.S. courts. All foreign judgments are handled by the Sofia City Court, which must determine that the judgment does not violate public decrees, standards, or morals before it can be executed.


International Arbitration

Pursuant to its Bilateral Investment Treaty (BIT) with the United States, Bulgaria has committed to a range of dispute settlement procedures starting with notification and consultations. Bulgaria accepts binding international arbitration in disputes with foreign investors.

The most experienced arbitration institution in Bulgaria is the Arbitration Court (AC) of the Bulgarian Chamber of Commerce and Industry (BCCI). Established more than 110 years ago, the AC hears civil disputes between legal persons, one of whom must be seated outside Bulgaria. It began to act as a voluntary arbitration court between natural and/or legal persons domiciled in Bulgaria in 1989.

Arbitration is regulated by the 1988 Law on International Commercial Arbitration, which is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law. According to the Code of Civil Procedure, not all disputes may be resolved through arbitration. Disputes regarding rights over real estate situated in the country, alimony, or individual labor disputes may only be heard by the courts. In addition, under the Code of Private International Law of 2005, Bulgarian courts have exclusive competence over industrial property disputes regarding patents issued in Bulgaria.

Regarding arbitration clauses that select a foreign court of arbitration, the Code of Civil Procedure mandates that these clauses are only valid if at least one of the parties maintains its residence abroad. As a result, foreign-owned, Bulgarian-registered companies having a dispute with a Bulgarian entity can only have arbitration in Bulgaria. However, under the Law on International Commercial Arbitration, the arbitrator could be a foreign person. Under the same act, the parties can agree on the language to be used in the arbitration proceedings. Arbitral awards, both foreign and domestic, are enforced through the judicial system. The party must petition the Sofia City Court for a writ of execution. Having obtained a writ, however, the creditor then must execute the award using the general framework for execution of judgments in the country. Foreclosure proceedings may also be initiated.

Bulgaria is a member of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the 1961 European Convention on International Commercial Arbitration. Bulgaria is also a signatory of the 1996 Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

Mediation

Mediation was first introduced in Bulgaria in 2004 with the adoption of the Mediation Act. The Bulgarian Chamber of Commerce and Industry and the American Chamber of Commerce (AmCham) opened commercial mediation centers with USAID-trained mediators. Several other mediation centers continue to operate and train new mediators. Mediation, however, is still not widely used due to limited public awareness and judges' reluctance to recommend alternative dispute resolution.

Performance Requirements/Incentives

Bulgaria does not impose export performance or local content requirements as a condition for establishing, maintaining, or expanding an investment. Employment visas and work permits are required for most expatriate personnel from non-EU countries. Permanent residence permits are often difficult to obtain. Private companies cannot exceed a 1:10 ratio of non-EU residents to Bulgarian employees. The law regulating gambling imposes other requirements for non-EU investors for organizing games of chance, including foreigners having to obtain an operating license.

The Invest Bulgaria Agency (IBA), the government’s investment coordinating body, provides information, administrative services, and incentive assessments to prospective foreign investors. Foreign investments over BGN 20 million (USD 13.5 million) are deemed to be priority "Class A" investment projects. At the request of investors receiving Class A investment certificates, IBA can recommend that the competent authorities grant them free real estate (either state or municipal property). Class A investments are also eligible to apply for state financing for critical infrastructure deemed necessary for the investment plan’s implementation. Additionally, IBA represents "Class B" investment projects (over BGN 10 million, or USD 6.7 million) before government authorities, and assists with processing all administrative documents. The government policy for investment promotion is not applicable to investments in coal mining, steel production, shipbuilding, synthetic production, agriculture, and fisheries. In addition, the Investment Promotion Act gives Class A or Class B status to certain investments in high-technology manufacturing and services and in regions with an unemployment rate equal to or higher than the country average. A two-year valued-added tax (VAT) exemption on equipment imports applies to investment projects over EUR 5 million (USD 6.6 million), provided that the project will be implemented over the two-year period and creates at least 50 new jobs.

Contact: InvestBulgaria Agency
31 Aksakov Street
Sofia 1000, Bulgaria
Tel.: ( +359 2 ) 985-5500
Fax: ( +359 2 ) 980-1320
E-mail: iba@investbg.government.bg
www.investbg.government.bg

Right to Private Ownership and Establishment

Article 19 of the Constitution states that the Bulgarian economy "shall be based on free economic initiative." Private entities, both foreign and domestic, can establish and own business enterprises engaging in any profit-making activities not expressly prohibited by law. Bulgaria's Commercial Code guarantees and regulates, for both foreign and domestic entities, the free establishment, acquisition, and disposition of private business enterprises. Competitive equality is the standard applied to private enterprises in competition with public enterprises.

Protection of Property Rights

Bulgarian law protects the acquisition and disposition of property rights. The Bulgarian legal system protects and facilitates acquisition and disposition of all property rights, such as land, buildings, and mortgages.

Although Bulgarian intellectual property rights (IPR) legislation is generally adequate - and in some cases stronger than in other EU countries - industry representatives believe effective IPR protection requires stronger enforcement, including stricter penalties for offenders. The Law on Copyright and Related Rights, the Law on Patents and Registration of Utility Models, the Law on Marks and Geographical Indications, the Law on Industrial Design, and the Penal Code were all harmonized with international standards in 2006. Bulgaria is a member of the World Intellectual Property Organization (WIPO) and a signatory to key international agreements, including WIPO Internet treaties.

Recognizing Bulgaria's IPR improvements, the United State Trade Representative (USTR) removed Bulgaria from the Special 301 Watch List in April 2006. Although the sale of pirated optical disc media is diminishing, internet piracy is the greatest challenge for the Bulgarian government and rights holders. The software piracy rate for end-users and businesses was 67 percent in 2009, according to the Business Software Alliance. The Bulgarian legal system has not kept pace with new internet-based technologies. As a result, Bulgarian courts have never successfully prosecuted internet pirates.

Copyrights

The 1993 Law on Copyright and Related Rights protects literary, artistic, and scientific works. Article 3 provides a full listing of protected works including computer programs (which are protected as literary works). The use of protected works is prohibited without the author’s permission, except in certain instances. Since 2000 the Law has undergone major revisions to comply with EU and international legislation and legislation pending in Parliament may further modify the law.

The term for protection of copyrighted works is 70 years after the author’s death. For films and other audio-visual works, copyrights are protected during the lives of the director, screenplay-writer, cameraman, or author of dialogue or music, plus 70 years. Copyright owners may file civil claims to terminate infringing activity and seek confiscation of equipment and pirated materials. The Copyright Office in the Ministry of Culture is responsible for copyright matters in Bulgaria. Bulgarian legislation provides for criminal, civil, and administrative remedies against copyright violation, but because of the small number of court judgments, administrative remedies enforced, and sentences, law enforcement is still inadequate.

International and Bulgarian rights holders have not been compensated for use of their music by most Bulgarian radio stations for over a year while broadcasters and rights holders’ representatives continue to negotiate to renew expired agreements.

Patents

Bulgarian patent law has been harmonized with EU law in the areas of application for European patents and patent protection in general. Patent protection is generally adequate but there are reports of conflicts of interest in the Patent Office, delays in informing patent-owners of actions involving their patents, and inconsistencies between the Patent Law and the Civil Procedure Code that lead to additional delays in infringement cases.

Bulgaria joined the Convention on the Granting of European Patents (European Patent Convention) in 2002. Bulgaria is a contracting state of the European Patent Office, whereby a patent recognized by the EU must immediately take effect in Bulgaria after validation, which includes translation of the patent into Bulgarian and payment of a fee (on average BGN 130 or USD 88) within three months of the day of the patent’s publication by the EU. Bulgaria is also part of the Patent Cooperation Treaty (PCT). Bulgaria grants the right to exclusive use of inventions for 20 years from the date of patent application, subject to payment of annual fees, which range from BGN 50 (USD 33.70) to BGN 1,500 (USD 1,010), depending on the time remaining before the patent expires. Innovations can also be protected as utility models (“small inventions”). The term of validity of a utility model registration is four years from the date of filing with the Patent Office. It may be extended by two consecutive three-year periods, but the total term of validity may not exceed 10 years.

Inventions eligible for patent protection must be new, involve an inventive step, and be capable of industrial application. Article 6 of the Law on Patent and Utility Model Registration lists items not regarded as inventions and Article 7 lists the exceptions to patentability. With regard to utility models, no registration is granted for methods and objects in the field of biotechnology.

Located in the Ministry of Economy, Energy, and Tourism, the independent Patent Office is the competent authority with respect to patent matters. The patent law describes patent application procedures and the examination process. Patent applications are submitted directly to the Patent Office and recorded in the state register. Compulsory licensing (allowing competitors in the market despite a valid patent) may be ordered under certain conditions: if the patent has not been used within four years of filing the patent application or within three years from the date of issue; the patent holder is unable to offer justification for not adequately supplying the national market; or declaration of a national emergency. Disputes arising from the creation, protection, or use of inventions and utility models can be heard and settled under administrative, civil, or arbitration procedures. Disputes are reviewed by specialized panels convened by the President of the Patent Office and may be appealed to the Sofia Administrative Court within three months of the panel's decision. Patent infringements are punishable by administrative fines from BGN 300 to 20,000 (USD 200-13,500). The Customs Office conducts border seizures when there is reason to believe that the goods are infringing either a patent, a supplementary protection certificate (SPC), or a registered utility model.

Pursuant to the 1996 Protection of New Types of Plants and Animal Breeds Act, the Patent Office can issue a certificate which protects new types of plants and animal breeds for between 25 and 30 years. In 1998, Parliament ratified the 1991 International Convention for the Protection of New Varieties of Plants. In addition, all new types of plants registered by the EU’s Community Plant Variety Office are considered effective in Bulgaria. The period of protection of animal breeds is 30 years starting from the issuance of the certificate.

Data Exclusivity

Responding to long-standing industry concerns, the Bulgarian government included a provision to provide data exclusivity (protection of confidential data submitted to the government to obtain approval to market pharmaceutical products) in its Drug Law. Bulgaria grants supplemental protection certificates for pharmaceutical products and plant protection products under EU regulations. This protection is similar to that provided in the U.S.

Trademarks

In 1999, Parliament passed a series of laws on trademarks and geographical indications, industrial designs, and integrated circuits in accordance with TRIPs (WTO’s Trade Related Aspects of Intellectual Property) requirements and the EU Association Agreement. The Trademarks and Geographical Indications Act (TGIA), as amended in 2005 and 2006 to comply with EU standards, regulates the establishment, use, suspension, renewal, and protection of trademarks, collective and certificate marks, and geographic indications.

The right for marks (trademarks, service marks, and collective and certificate marks) is acquired through registration and is valid from the date of filing the application. The right of registration belongs to the first applicant. Co-ownership of marks is admissible. Registration is refused, or an existing registered trademark is cancelled, if a trademark constitutes a reproduction or an imitation or if it creates confusion with a registered or well-known trademark, as stipulated by the Paris Convention for the Protection of Industrial Property and the TGIA. Applications for registration must be submitted to the Patent Office. Under the TGIA, well-known trademarks can be entered into a special state register by the Patent Office or the Sofia Administrative Court. In addition, Bulgaria is a member of the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration.

Right of priority with respect to trademarks that do not differ substantially is given to the application that was filed in compliance with Article 32 of the TGIA. Right of priority is also established on the basis of a request made in one of the member countries of the Paris Convention for the Protection of Industrial Property or of the World Trade Organization. To exercise the right of priority, the applicant must file a request within six months of the date the other party files.

A trademark is normally granted within eighteen months of filing a complete application. Refusals can be appealed to the Disputes Department of the Patent Office. Decisions of this department can be appealed to the Sofia Administrative Court within three months of the decision. The right of exclusive use of a trademark is granted for ten years from the date of submitting the application. Extension requests must be filed during the final year of validity, but not less than six months prior to expiration. Protection is terminated if a trademark is not used for a five-year period.

Trademark infringement is a significant problem in Bulgaria for U.S. cigarette producers, and smaller scale infringement affects other U.S. brands. Bulgarian legislation provides for criminal, civil, and administrative remedies against trademark violation. Civil legal infringement actions may be conducted, including seizure and destruction of the infringing products and compensation for damages. The claimant may request compensation ranging from BGN 500 to BGN 100,000 (USD 380 and USD 77,000). In addition, the claimant may request possession of the infringing articles and compensation for expenses incurred in destroying the articles. All civil actions are heard by Sofia City Court.

The TGIA imposes a fine of BGN 500 (USD 380) to BGN 1,500 (USD 1,010) on any physical person who is selling goods or services that bear a sign that is identical or similar to a registered mark without the proprietor’s consent. Legal entities are fined between BGN 1,000 (USD 760) and BGN 3,000 (USD 2,020). The fine for repeated offences is between BGN 1,500 (USD 1,010) and BGN 3,000 (USD 2,020) for physical persons and between BGN 3,000 (USD 2,020) and BGN 5,000 (USD 3,370) for legal entities. The Criminal Code prohibits use of a third person’s trademark without the proprietor’s consent, punishable by imprisonment of up to five years and a fine of up to BGN 5,000 (USD 3,370). If the act is repeated or significant damages result, the punishment can be extended up to eight years of imprisonment and a fine between BGN 5,000 to BGN 8,000 (USD 5,381). In practice court rulings are rare and sentencing is lenient.

In Bulgaria, trademarks, service-marks, and rights to geographic indications are only protected pursuant to registration with the Bulgarian Patent Office or an international registration mentioning Bulgaria; they do not arise simply with “use in commerce” of the mark or indication. Legal entities cannot be held liable under the Criminal Code. Criminal penalties for copyright infringement and willful trademark infringement are limited compared to enforcement mechanisms available under U.S. law.

Industrial Designs

Under Bulgarian law, industrial designs which are new and original can be granted certificates from the Patent Office and entered in the state register. The term of protection is 10 years, renewable up to 25 years. Bulgaria is a contracting state of The Hague Agreement Concerning the International Deposit of Industrial Designs. With respect to third parties, an international registration shall have effect in Bulgaria as of the date of expiration of the six-month period under Article 8 (1) of the Hague Agreement. Enforcement of industrial design is similar to trademarks enforcement.

Transparency of the Regulatory System

Regulatory Environment

In general, the regulatory environment in Bulgaria is characterized by complex regulations, lack of transparency, and arbitrary or weak enforcement. These factors create incentives for public corruption and, as a result, foreign investors may experience a cumbersome investment climate.

Bulgarian law defines 41 operations that must be licensed and includes registration and permit regimes. The law requires all regulations to be justified by defined need (in terms of national security, environmental protection, or personal and material rights of citizens), and prohibits restrictions incidental to the stated purposes of the regulation. The law also requires that the regulating authority perform a cost-benefit analysis of any proposed regulation. In addition, the law eliminates bureaucratic discretion in granting requests for routine economic activities, and provides for "silent consent" when the government does not respond to a request in the allotted time. While the law creates a ground-breaking normative framework, implementation and consistent enforcement are still lacking. Local companies in which foreign partners have controlling interests may be requested to provide additional information or meet mandatory requirements in order to engage in certain licensed activities including production and export of arms and ammunition; banking and insurance; and exploration, development, and exploitation of natural resources.

Major Taxation Issues Affecting U.S. Businesses

Bulgaria has one of the lowest tax rates in the EU with a flat 10-percent tax on corporate and individual income. Certain tax incentives, such as an exemption from corporate taxes, apply in regions of high unemployment. To simplify tax calculations for small enterprises, physical persons in certain small-scale industries – usually companies with turnover less than BGN 50,000 (USD 33,700) annually -- such as craftsmen, tradesmen, and small hotel owners pay a "presumptive tax” (in lieu of the 10 percent tax), according to a schedule established by Parliament. The amount of the "presumtive tax" is determined by and payable to municipal authorities.

Dividends (and liquidation quotas) distributed by a Bulgarian resident company to non-EU investors are subject to a withholding tax of 5 percent. An annual 30-percent depreciation rate is applied to investment in new machinery and other equipment, and an annual 50-percent depreciation rate is applied on computer hardware and computer software.

The Treaty for Avoidance of Double Taxation (TADT) between the United States and Bulgaria (2007) applies only to direct taxes and excludes indirect levies, such as value-added and excise taxes and social contributions (pension, health, and unemployment funds). It also applies to all sources of income that residents of either state have received "at source" in the other state. The TADT is designed to reduce the tax burden for residents of both states, to stimulate cross-border trade and investment.

Foreign employees are required to have the same insurance and unemployment compensation packages as Bulgarian employees. Employers must pay 60 percent of all social security and health fund contributions. Employers must contribute 13 and 4.8 percent of employees’ gross wages for social security and health insurance respectively. Employers must also pay 0.6 percent of an employee’s wages to an unemployment fund. Companies contribute one percent of gross wages to a workers’ compensation fund. The monthly maximum for social contributions is BGN 2,000 (USD 1,348).

Bulgaria has a 20 percent single-rate value-added tax (VAT). For certain tourist services VAT is levied at nine percent. VAT registration is mandatory for companies with turnover exceeding BGN 50,000 (USD 33,700) annually. Bulgaria has adopted the EU rules for applying VAT on goods and services traded between Bulgaria and the other EU member states.

Except as noted above, all goods and services are subject to VAT except exports, international transport, and precious metals supplied to the central bank. VAT payments are generally refunded when goods are re-sold. Exporters may claim VAT refunds within a 30-day period. Excise taxes are levied on tobacco, alcoholic beverages, fuels, certain types of automobiles, and gambling proceeds. Investors are entitled to VAT refunds on locally-purchased goods within 30 days if they meet certain investment criteria.

Foreign investors have asserted that widespread tax evasion, combined with weak enforcement, places them at a disadvantage. Another problem underscored by investors is frequent revision of tax laws, sometimes without sufficient notice.

Energy Regulation

The Energy Law establishes a predictable regulatory environment in the energy sector where the key regulatory responsibilities are vested with the State Energy and Water Regulatory Commission - an independent body. In mid-2007, the electricity distribution market in Bulgaria was liberalized to comply with EU energy legislation. The draft Renewable Energy Law, which is currently pending government approval, would mandate a process for selecting power projects for connection to the electricity grid and give producers a predictable rate of return on their investments.

Competition Policy

The 2008 Law on the Protection of Competition (the "Competition Law") is intended to implement EU rules which promote competition and consumer protection. The Competition Law forbids monopolies, restrictive trade practices, abuse of market power, and unfair competition. Companies are prohibited from: direct or indirect abusive pricing practices; distribution of market shares and supply sources; limiting manufacturing development to the detriment of consumers; discriminatory treatment of competing customers; tying contracts to additional and unrelated obligations; and use of economic coercion to cause mergers. The law prohibits certain forms of unfair competition: damaging competitors’ goodwill; misrepresentation with respect to goods or services; misrepresentation with respect to the origin, manufacturer, or other features of goods or services; the use or disclosure of someone else's trade secrets in violation of good faith commercial practices; and "unfair solicitation of customers" (promotion through gifts and lotteries). Monopolies can only be legally established for certain categories of activities: railway and postal services; use of atomic energy; production of radioactive materials; and weapons production.

Efficient Capital Markets and Portfolio Investment

Since 1997, the Bulgarian Stock Exchange (BSE) has operated under a license from the Securities and Stock Exchange Commission (SSEC). The 1999 Law on Public Offering of Securities regulates the issuance of securities, securities transactions, stock exchanges, and investment intermediaries. The 2002 comprehensive amendments to this law establish significant rights for minority shareholders of publicly-owned companies in Bulgaria. In addition, they create an important foundation for the adoption of international best practices for corporate governance principles in public companies.

The BSE’s infrastructure has substantially improved in recent years, including the establishment of an official index (SOFIX), an internet-based trading system, and a growing number of brokers. Investors access the BSE to trade corporate stock, government bonds, corporate bonds, Bulgarian Depositary Receipts, municipal bonds, and mortgage-backed bonds.

Total market capitalization amounted to BGN 10.4 billion (USD 7 billion) in the first half of 2010, a decrease of 3.8 percent compared to the first half of 2009. In the first half of 2010, total turnover was BGN 325 million (USD 218 million), a 65 percent decline compared to the first half of 2009. The majority of BSE’s equity was owned by the Ministry of Finance (51 percent) and by investment intermediaries and commercial banks (33 percent). But, on January 6, the government floated its own shares of the BSE on the bourse. The remaining BSE capital is allocated among other legal entities, natural persons, and institutional investors.

The Banking System

The Bulgarian banking system has undergone considerable transformation since its virtual collapse in 1996 and now demonstrates both high predictability and client and investor confidence. There are 30 commercial banks (24 subsidiaries and 6 branches), with total assets of BGN 72.6 billion (USD 48.9.5 billion) and an annual growth rate of 1.3 percent in November 2010. Approximately 56 percent of bank assets are concentrated in the top five banks: Bulbank, DSK Bank, United Bulgarian Bank (UBB), Eurobank EFG Bulgaria, and Raiffeisen.

In 2003, Bulgaria completed the privatization of its state-owned banks, attracting some strong foreign banks as strategic investors. Foreign investors drawn to the Bulgarian banking industry include UniCredito Italiano SpA (UCI), BNP PARIBAS, KBC, National Bank of Greece, Societe Generale, Raiffeisen International, OTP Group, and Citibank.

Bulgaria’s banking system is highly capitalized. The average capital adequacy ratio (capital base to risk-weighted credit exposures) for the banking system has steadily declined from 43 percent at end-1998 to 18 percent in June 2010, but still remains above the Bulgarian National Bank’s requirement of 12 percent. Domestic banks have responded to the global financial crisis by reducing risk exposure through increased interest rates on both deposits and loans.

Government Securities

The Bulgarian government finances some of its expenditures by issuing bonds in capital markets. Commercial banks are the primary purchasers of these instruments. EU-based banks are eligible to be primary dealers of Bulgarian government bonds.

In order to acquire Bulgarian government bonds, a foreign bank must register with the Ministry of Finance and open a “custody account” in Bulgarian Leva.

The Investment Promotion Act defines securities, including treasury bills, with maturities over six months as investments. Repatriation of profits is possible after presenting documentation that taxes have been paid.

Competition from State-Owned Enterprises (SOEs)

Upon EU accession, Bulgaria was recognized as a fully operating market economy, in which the majority of the companies are private. State monopolies in the tobacco industry, railways, and mining are among the few exceptions. The government has gradually reduced subsidies to the railway industry. The railway infrastructure, however, remains government property. The 2011 amendments to the Postal Act restrict the monopoly of the state-owned Bulgarian Post Offices, allowing competition for small (up to 50 grams) deliveries of mail correspondence.

Political Violence

There is a growing awareness of corporate social responsibility among both producers and consumers, but it is not always clear that expectations are as high for domestic firms as for foreign investors.

Corruption

Despite new laws and tougher enforcement, corruption is still one of most difficult problems in Bulgaria’s investment climate. However, as recognized in the European Commission's annual Cooperation and Verification report published in July 2010, the government has shown increased political will in combating corruption and organized crime. Since 2009, numerous high-level officials and four former ministers, including one from the current government, have been investigated and indicted for corruption-related crimes. Numerous high-profile anti-smuggling operations have generally had a deterrent effect on contraband, but well-established human trafficking, narcotics, and contraband smuggling channels that contribute to corruption in Bulgaria still exist.

The Prosecution service, the State Agency for National Security, and the Ministry of Interior are the primary institutions responsible for combating corruption. Despite some reforms, the police, customs officials, and the judiciary as a whole (which includes prosecutors and judges) consistently receive poor scores in the area of public confidence in opinion polls. Bulgaria has laws, regulations, and penalties to combat corruption effectively, but internal oversight within institutions is often weak. Lack of transparency in the public procurement system is also often cited as a source of corruption.

Bribery is a criminal act under Bulgarian law for both the giver and the receiver. Penalties range from one to fifteen years imprisonment along with possible confiscation of property depending on the circumstances and seriousness of the case. In the most egregious cases, the Penal Code calls for prison terms of 10 to 30 years. Bribing a foreign official is also a criminal act. The government does not require companies to establish internal codes of conduct nor compliance programs to detect and prevent bribery.

Bulgaria has an NGO sector that monitors corruption and organized crime, including a local chapter of Transparency International (TI). Bulgaria ranks 73rd of 178 countries in TI's Corruption Perception Index for 2010, down two places from 2009.

In 1998 Bulgaria was one of the first non-OECD nations to ratify the OECD Anti-Bribery Convention. Bulgaria has also ratified the Council of Europe’s Convention on Laundering, Search, Seizure, and Confiscation of Proceeds of Crime (1994) and Civil Convention on Corruption (1999). Bulgaria has signed and ratified the UN Convention against Corruption (2003); the Additional Protocol to the Council of Europe’s Criminal Law Convention on Corruption; and the UN Convention against Transnational Organized Crime.

Bilateral Investment Agreements

Bulgaria is a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and the Agreement Establishing the World Trade Organization.

Bulgaria has a Bilateral Investment Treaty (BIT) with the United States, which guarantees national treatment for U.S. investments and creates a dispute settlement process. The BIT also includes a side letter on protections for intellectual property rights. The Governments of Bulgaria and the United States exchanged notes in 2003 to make Bulgaria’s obligations under the BIT compatible with its EU obligations, and finalized the process in January 2007.

As of January 2010, Bulgaria has bilateral investment treaties signed with the United States and the following countries: Albania, Algeria, Argentina, Armenia, Austria, Bahrain, Belarus, Belgium, China, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Israel, Italy, Jordan, Kazakhstan, Kuwait, Latvia, Lebanon, Libya, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Mongolia, Montenegro, Morocco, Poland, Portugal, Qatar, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Syria, Thailand, The Netherlands, Tunisia, Turkey, Ukraine, United Kingdom, Uzbekistan, Vietnam, and Yemen.

As of January 2010, Bulgaria has signed bilateral double taxation treaties with the United States and the following countries: Albania, Algeria, Armenia, Austria, Azerbaijan, Belarus, Belgium, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Mongolia, Montenegro, Morocco, North Korea, Norway, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Syria, Thailand, The Netherlands Turkey, Ukraine, United Arab Emirates, United Kingdom, Uzbekistan, Vietnam, and Zimbabwe.

OPIC and Other Investment Insurance Programs

In 1991, the Overseas Private Investment Corporation (OPIC) and the Bulgarian government signed an Investment Incentive Agreement, which governs OPIC’s operations in Bulgaria. OPIC provides medium- to long-term funding through direct loans and loan guarantees to eligible investment projects in developing countries and emerging markets. OPIC also supports a number of privately owned and managed equity funds, including a regional fund for Southeast Europe created in 2005 for investments in companies in Bulgaria and other Balkan countries. OPIC's Small- and Medium-Size Financing is available for businesses with annual revenues under USD 250 million. OPIC's structured financing focuses on U.S. businesses with annual revenue over USD 250 million and supports large capital-intensive projects such as infrastructure, telecommunications, power, water, housing, airports, technology, and financial services.

OPIC offers American investors insurance against currency inconvertibility, expropriation, and political violence. Political risk insurance is also available from the Multilateral Investment Guarantee Agency (MIGA), which is a World Bank affiliate, as well as from a number of private U.S. companies.

Bulgaria is a signatory to the Convention Establishing the Multilateral Investment Guarantee Agency.

Labor

Bulgaria’s workforce officially consists of 3,480,800 (third quarter 2010) well-educated and skilled men (53 percent) and women (47 percent). The official adult literacy rate in Bulgaria is 98.3 percent. A high percentage of the workforce has completed some form of secondary, technical, or vocational education. Many Bulgarians have strong backgrounds in engineering, medicine, economics, and the sciences, but there is a shortage of professionals with Western management skills. The demand for skilled managers is increasing with an influx of high technology, innovative, and knowledge-based companies from the EU. The aptitude of workers and the relative low cost of labor are considerable incentives for foreign companies, especially those that are labor-intensive, to invest in Bulgaria.

The Bulgarian Constitution recognizes workers' rights to join trade unions and organize. The National Council for Tripartite Cooperation (NCTC) provides a forum for dialog among government, employer organizations, and trade unions on issues such as cost-of-living adjustments. An established practice of negotiating the so-called “social security thresholds” between trade unions and the employers organizations each year helps determine the formula for calculating the relative amount of employer and employee social security contributions.

Bulgaria has two large trade union confederations represented at the national level, the Confederation of Independent Trade Unions of Bulgaria (CITUB) and the Confederation of Labor “Podkrepa” ("Support"). Currently, estimated trade union membership is 390,000 for CITUB and over 120,000 for Podkrepa.

There are very few restrictions on trade union activity, but employees in smaller private firms are often not represented by trade unions. In addition, there are six nationally recognized employer organizations currently in Bulgaria which target different industry and company membership.

Under the Bulgarian Labor Code, employer-employee relations are regulated by employment contracts. The framework of the employment contracts can be shaped through collective bargaining. Collective labor contracts can be concluded at the sectoral level, enterprise level, and municipal level. The labor code addresses worker occupational safety and health issues, mandates a minimum wage (determined by the Council of Ministers), and prevents exploitation of workers, including child labor. The labor code clearly delineates employer rights. Disputes between labor and management can be referred to the courts, but resolution is often subject to delays. Neither foreign companies nor majority foreign-owned Bulgarian companies are exempt from the requirements of the labor code.

Over the last ten years, the labor code has been amended to address labor market rigidities and bring labor legislation into compliance with EU requirements. In 2008, the Parliament passed changes in the labor legislation to increase fines to BGN 15,000 (USD 10,100) for labor code violations. The minimum annual paid leave is 20 days, but in case of a collective labor agreement, this minimum could be set higher. The minimum wage is BGN 240 (USD 161.7) per month.

The National Institute for Conciliation and Arbitration (NICA) developed a framework for collective labor dispute mediation and arbitration. NICA includes representatives from labor, employers, and government. NICA-sponsored collective labor dispute resolutions are still few in number. Several of the appointed mediators received basic mediation skills training from the U.S. Federal Mediation and Conciliation Service. There are 36 appointed mediators and 36 arbiters, proposed by social partners and approved by NICA’s Supervisory Board.

Foreign Trade Zones/Free Ports

There are six duty-free zones in Bulgaria: Ruse and Vidin ports on the Danube; Plovdiv; Svilengrad (near the Turkish border); Dragoman (near the Serbian border); and Burgas port on the Black Sea. They are all managed by joint stock or state-owned companies. The government provided land and infrastructure for each zone.

Foreign individuals and corporations, and Bulgarian companies with one percent or more foreign ownership may operate in a duty-free zone. Thus, foreign-owned firms have equal or better investment opportunities in the zones compared to Bulgarian firms. All forms of legal economic activity are permissible in duty-free zones. Foreign, non-EU goods delivered to the duty free zones for production, storage, processing, or re-export are VAT and duty exempt. Bulgarian goods may also be stored in duty free zones with permission from the customs authorities. With Bulgaria now in the EU, the duty-free zones no longer apply tax and duty exemptions to exports from Bulgaria to other EU countries.

EU integration has encouraged regional authorities to attract outside investors to spur local economic development. In partnership with the private sector, they provide resources (land, infrastructure, etc.) for the development of industrial zones and technological parks, which are different from duty-free zones in that they do not provide for any form of preferential tax treatment. Currently, there are three operating industrial zones: near Vidin, Ruse, and Svilengrad; and five other industrial zones are under construction: Bozhurishte (near Sofia), Burgas, Karlovo, Pleven, and Varna. The government has established a National Industrial Zones Company to support the establishment of industrial zones and technological parks and enable a stable FDI inflow.

Foreign Direct Investment Statistics

In October 2010, new FDI for the year totaled USD 1.1 billion, bringing the total FDI since 1992 at USD 49.4 billion.

Total FDI in Bulgaria


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Year

USD in millions

1992

34.4

1993

102.4

1994

210.9

1995

162.6

1996

256.4

1997

636.2

1998

620.0

1999

818.8

2000

1,005.0

2001

812.9

2002

969.7

2003

2,099.0

2004

3,443.4

2005

3,916.0

2006

7,799.0

2007

11,756.0

2008

8,932.0

2009

4,720.0

2010 (Jan-Oct)

1,113.5

Total 49,408.2

(Sources: Bulgarian National Bank; Invest Bulgaria Agency)

FDI by Country of Origin (1996-2009)

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Country USD in millions

Austria 7,854.4

Netherlands 7,476.2

Greece 4,250.6

U.K. 3,924.1

Germany 3,270.7

Cyprus 2,557.1

USA* 1,801.2

Hungary 1,751.4

Russia 1,575.1

Italy 1,553.6

Ireland 1,448.8

Spain 1,339.5

Switzerland 1,307.5

Czech Republic 1,284.3

France 1,297.6

Belgium and Luxemburg** 916.8

Belgium*** 886.6

Luxemburg*** 880.1

Turkey 555.3

Denmark 404.6

Israel 345.1

Malta 342.3

Latvia 227.1

Slovenia 222.4

Sweden 219.6

Romania 207.1

(Source: Bulgarian National Bank)

*Owing to methodological quirks, not all data accurately reflect investment rankings. Official investment statistics currently rank the United States seventh in terms of overall investment in Bulgaria for the period 1992-2009. While the Bulgarian Central Bank credits the United States with investments at the rate of USD 40- 50 million per year in the last eight years, this data does not capture a large share of U.S. FDI in Bulgaria because some of it is channeled through European subsidiaries of American parent companies.

**Until 2005

***Since 2006

FDI by industry (1998-2009)

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Industry USD in millions

Real estate and business activities 11,154.0

Financial activities 9,831.5

Manufacturing 9,397.3

Trade and repairs 7,893.4

Construction 3,363.7

Electricity, gas, and water 2,985.3

Telecommunications and transport 2,839.4

Hotels and restaurants 790.5

Agriculture, forestry, and fishing 264.9

Mining 204.1

Education 19.4

(Source: Bulgarian National Bank)

Major Foreign Direct Investments (2007-2010)

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Investor Country Sector Bulgarian Firm USD/mil.

Enel Italy power generation Maritza Iztok 328.8

IWC GmbH Germany renewable energy Wind Farm Lozenets 302.2

AES Geo U.S. renewable energy AES Geo Energy 252.8 Alpic Group Switzerland renewable energy Wind Park Vetrocom 115.8

IWC GmbH Germany renewable energy Wind Farm Krasen Dol 100.0

Solvay Belgium thermal energy Deven AD, Devnya 93.6

Electrawinds Belgium renewable energy Electrawinds Bulgaria 75.6

Viohalco Group Greece steel processing Stomana Pernik 73.5

Solvay Belgium manufacturing Solvay Sodi 71.0

Viohalco Group Greece copper production Stomana Pernik 70.8

Ferry Energy Spain green energy Ferry Energy 63.0

PCC DEG Germany renewable energy Wind Park Izvorsko 57.5

Tengelmann Konzern Germany logistics National Logistic Center 56.2

WE2 and WPD Germany renewable energy Wind Park Stanata 56.2

Petrolvilla Italy hydro energy VEZ Svoge 52.5

Solvay Group Belgium manufacturing Pipelife Bulgaria 45.3

Yazaki Japan automotive parts Yazaki Bulgaria 31.5

(Source: Invest Bulgaria Agency)

Bulgaria’s direct investment stock abroad was a total of USD 1.3 billion in 2009.

FDI by Country of Investment (1999-2009)

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Country USD in millions

Italy 174.9

Turkey 82.2

Macedonia 60.4

Romania 57.6

USA 49.8

Greece 48.8

Serbia 48.3

Russia 39.3

UK 36.8

Malta 35.6

Ukraine 29.4

Austria 28.3

Cyprus 23.3

Spain 17.5

(Source: Bulgarian National Bank)

Web Resources

http://www.usembassy.bg

http://www.investbg.government.bg (Invest Bulgaria Agency)

http://www.opic.gov

http://www.exim.gov

http://www.ustda.gov

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