Investments in Bulgaria. Investment Promotion act
Bulgaria has macroeconomic and financial stability and most favorable EU taxes – only 10% tax on corporate and personal income, and a dividend tax of only 5%.
Investments in Bulgaria are governed by the Investment Promotion Act (referred below as “IPA”) and the regulations on its application. As the name suggests the main purpose of the Act is to stimulate investment in Bulgaria, to enhance the competitiveness of the Bulgarian economy through investment in scientific research, innovations and technological development in production and services adding high value while observing the principles of sustainable development and to improve the investment climate.
The governing regime is liberal and its main goal is to attract foreign investors.
Key advantages of Bulgaria as a place for profitable investments are:
- the macroeconomic and financial stability;
- liberal investment regime;
- the EU most favorable tax regime;
- skilled labor;
- lowest operational costs in Europe;
- strategic geopolitical position allowing access to key markets like EFTA and Russia.
IPA aims at attracting prospective investors to Bulgaria by introducing a system of incentives for initial investments in tangible and intangible fixed assets and new job opportunities arising out of such investments. The system of investment encouragement is in accordance with EU requirements for state aid, in particular with Commission Regulation on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (hereafter referred as “TFEU”).
Companies that invest a large amount of money obtain special status and favorable treatment. There are certain requirements listed in Investment Promotion Act – IPA that have to be fulfilled by companies to receive the status of certified investors. Investments exceeding certain thresholds and satisfying particular criteria are considered as Priority Investment Projects. Apart from the priority investment projects, investments may be Class A or Class B depending on the value of the investment. To obtain certification, the investment must be related to the setting-up of a new company in Bulgaria, to the extension of an existing enterprise/activity, to the diversification of the output of an enterprise/activity into new products; or to a fundamental change in the overall production process of an existing enterprise/activity.
Foreign investors which invest more than BGN 250 000 in Bulgaria can benefit from permanent residence permit for them and their families. Such permit significantly facilitates the entry and the exit of the country.
Investment Promotion Act – IPA offers a variety of benefits to the investors which choose Bulgaria to invest. You can find more about them in our article named Benefits provided by the Investment Promotion act.
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