Fostering of Investments

Investment Promotion

 

 

Law on Investment Promotion (IPA) introduced a system of incentives for initial investments in tangible and intangible assets and the related vacant positions, according to Regulation № 800/2008 of the European Commission, as multisectoral regional aid and aid for professional training.

 

In order an investment to qualify for promotion it must meet the following conditions:

  • investments to the creation of new or the expansion of an existing enterprises, diversification of the production or a fundamental change in the overall production process;
  • be in some of the following economic activities: manufacturing, information technology, research and development, human health and medical care services, education, warehousing and support activities for transportation;
  • at least 80 percent of the total future revenue must be form manufactured products (goods and services);
  • at least 40 percent of the eligible costs to be finance with own or borrowed funds;
  • the acquired assets must be new and purchased at market rates from third independent parties;
  • to maintain the investment for at least five years for large enterprises and three years for small and medium enterprises;
  • create new jobs and maintain them at least five years for large enterprises and three years for small and medium enterprises; and
  • duration of implementation must be three years.

 

Classes of Investments

According to their size, investments are divided into Class A, Class B and Priority Investment Projects.

Class A
(Million Levs)
Class B
(Million Levs)
Specifics
20 10 In general
7 4 In municipalities with unemployment rates equal to or higher than the national average
In high-tech industries (production of chemical and pharmaceutical products, computer and
communication equipment, electronic and optical products, electrical equipment,
machinery and equipment, vehicles, medical and dental instruments and supplies
and related installation, repair and maintenance)
4 2 In high-tech and intensive knowledge-based services (information technology and services, research and
development, education, human health and medical care activities)

 

Priority Investment Projects

Priorities are investment projects in all sectors of the economy in accordance with Regulation (EC) № 800/2008 which are particularly important for the economic development of the Republic of Bulgaria or regions in the country.

 

Threshold
(Million Levs)
Minimum Number of Employees Subject
100 200 In general
70 100 For construction of industrial zone and its development to industrial park
50 100 In high-tech industries and municipalities with unemployment – higher than the average
in the country
30 50 To build a technology park
20 50 In high-tech and intensive knowledge-based services (information technology and
services, research and development, education, human health and medical care activities)

 

Investment thresholds can be reduced with an increase in the minimum number of employees:

  • for each 100 additional employees – lowering the threshold with 10 per cent – in general, in municipalities with high unemployment, and high-tech industries for industrial zones;
  • for each 50 additional employees – lowering the threshold with 10 per cent – in high-tech services and technology parks.

 

Measures to promote investment

 

Measure Class
Reduced time for administrative services А, B, Priority
Individual administrative services А, Priority
Easier procedure (no tender or competition) for the acquisition of ownership
or limited real rights on state or municipal real estates
А, B, Priority
Sale, exchange or establishment of limited real rights without a tender
on property of state or municipal companies
А, B, Priority
Financial support for construction of infrastructure А, 2 projects class B in industrial zones, Priority
Financial support for professional training (high-tech activities
or in municipalities with high unemployment)
А, B, Priority
Sale or establishing of limited real rights on state or municipal property,
without a tender at market or lower prices and exemption from stamp duty in case
of change of the designation of land
Priority
Sale, exchange or establishment of limited real rights without
a tender on property owned by a state or municipal company at
market or lower prices
Priority
Institutional support, public-private partnership or establishing joint
ventures
Priority
Different types of transactions concluded between the investor and
the company established to build and develop industrial zones
Priority
Grants:

-50 per cent of the cost of investment in education and research,
if not less than 25 per cent of the minimum amount of investment
is implemented;;
-10 per cent of the cost of investments in manufacturing, if not
less than 50 per cent of the minimum amount of investment is implemented.

Priority

Certification procedure

Applications for issuance of an investment class or priority project certificate shall be submitted to the Bulgarian Investment Agency. The Executive Director submits to the Minister of Economy, Energy and Tourism (the Minister) a proposal for granting or refusing to grant a certificate within 30 days of receipt of the application.

The certificate is issued by the Minister or by an authorized official.

The procedure for the issuance of a certificate of priority investment project is the same, but in addition the Minister files to the Government a proposal for signing of a memorandum of understanding or agreement with the investor. After approval of the memorandum or the agreement by the Government the Minister issues the certificate of priority investment project.

 

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