Bulgaria

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Sozopol, Black Sea

With $2.5 billion FDI, Bulgaria ranks first in the region of South-East Europe and 12th in the global FDI index of UNCTAD for 2004. The EU countries are now Bulgaria’s main export destination (56%) and a major source of foreign direct investment (67%). It is also 13th out of the world’s top 60 offshore destinations, according to a report published by The Economist Intelligence Unit in 2005.

The Association Agreement between Bulgaria and the EU, a prelude to eventual EU membership, enables most goods to move between these two parties at zero, or close to zero, tariff rates. This can be an advantage to US companies with production facilities in Bulgaria intended for export into the EU, but a disadvantage for US exporters with European competitors. Full accession to the EU is slated for 1 January 2007.

A developing infrastructure

The software market, textile industry and the real estate market could be attractive for EU investors. Institutional investors are interested in commercial property, warehouses and retail stores; individual investors are getting into the residential market.

The energy and the telecommunications sector are the most attractive for high profile overseas investors. The Bulgarian telecommunications market, which features a dominant fixed-line operator, several smaller rivals and three mobile phone service providers, offers opportunities for European suppliers, because the infrastructure is still underdeveloped.

Export prospects

Good prospects for exports to Bulgaria include the following sectors (in alphabetical order): automotive parts and services, construction equipment and building products, food processing equipment, information technology, telecommunications, defense, energy, medical products, pollution control equipment and services, and tourism infrastructure. Bulgaria stands a fair chance to develop as an outsourcing zone for high value-added businesses and see a boom of foreign investments after its European Union accession, as it offers investment opportunities in sectors ranging from IT to real estate.

US exporters, especially small and medium-sized enterprises, generally choose to enter the Bulgarian market through an agent or distributor. This is because the small size of the Bulgarian market, as well as language, cultural, and other differences, will make it difficult to set up a branch or subsidiary at the outset.

Location, location, location

Paintings adorn every inch of the central church at Rila Monstery

Bulgaria is situated at the heart of a region undergoing rapid development as new market economies emerge. Although the population of the country is 7.45 million, a total of over 60 million people in 10 countries live within a 500km radius of the capital, Sofia. Bulgaria enjoys good river connections, with the Danube running along the border to Romania, and emerging onto the Black Sea. Motorways running through Bulgaria link Western Europe with Russia and Asia Minor, the Adriatic, the Aegean and the Black Sea.

Find out more

The AmCham membership list at www.amcham.bg is a good place to start when looking for legal and other business services in Bulgaria. While the commercial climate is, in general, very positive, there are still factors that inhibit US Bulgarian trade and investment. Unemployment and low wages limit consumer purchasing power. The judicial system is inefficient and sometimes corrupt, and organized crime influences some sectors of the economy.

Facts in brief

Bulgaria’s location is South-Eastern Europe, bordering the Black Sea, between Romania and Turkey. Strategic location near Turkish Straits; controls key land routes from Europe to Middle East and Asia

Its climate is temperate: cold, damp winters; hot, dry summers

Natural resources include bauxite, copper, lead, zinc, coal, timber, arable land

Agricultural products are vegetables, fruits, tobacco, wine, wheat, barley, sunflowers, sugar beets; livestock

Industries include electricity, gas, water; food, beverages, tobacco; machinery and equipment, base metals, chemical products, coke, refined petroleum, nuclear fuel

Bulgaria has civil law and criminal law based on Roman law; accepts compulsory ICJ jurisdiction.

Diplomatic representation in the US — Chief of mission: Ambassador Elena B Poptodorova

Diplomatic representation from the US — Chief of mission: Ambassador John Ross Beyrle

Contact Information

American Chamber of
Commerce in Bulgaria
Business Park Sofia
Mladost 4 Area
1715 Sofia
Bulgaria
Tel: +359 2976 9565
E-mail: amcham@amcham.bg
Website: www.amcham.bg

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