Bulgaria joined the EU in January 2007, and that has provided economic stability to the country. The EU membership has been instrumental in opening the possibility of foreign investment after many economically devastating years. Bulgaria has now opened up to the West and the investment scenario has been gradually picking up pace.
Business in Bulgaria has many advantages and disadvantages to its disposal and the people planning to do business in Bulgaria should consider the continued political instability in the country and approach the market with caution.
1. Economy- Bulgaria has emerged as one of the strongest economies with an economic growth of 7% for three consecutive years. Bulgarian deficit is below 3% of GDP and has a low public debt. It ranks in terms of development since independence and the cost of setting up a business is quite low, making it profitable.
2. Business- The country ranks relatively high in business freedom with easy means of setting up and closing of business. Low taxes for individuals and corporations, ready financing for companies at competitive rates, franchises, trademarks, patents and copyrights, along with lower property prices make it suitable for business.
3. Finance- Bulgarian currency, Lev, is attached to the Euro, providing it stability and strength. Given the current strength of Euro, it makes the pegging advantageous. Bulgaria wishes to join the Euro zone with eventual financial stability and economic strength. This would open up the markets for Bulgarian businesses. Investment before the transition would benefit the buyers, contemplating the rise in price with effect.
4. Labor field- Bulgaria offers a large and skilled workforce with efficient background. The high literacy rate and lesser brain drain effect benefit the country. It is also an important location for outsourcing and has a greater population of computer literates.
5. Location- The geographic location of the country allows easy access to the developing markets in Eastern Europe. The enormous tourism potential and exceptionally clean air and water resources provide great business potential to the country.
1. Political Scenario- Bulgaria suffers inefficient bureaucracy and corruption. Weak property rights and slow moving courts are some of the drawbacks. Limited consumer income and less shopping over the internet are points to be considered while investing in business with the country.
2. Finance: The inflation has had its effect on the world economy and Bulgaria doesn’t remain unaffected either. A drop in inflation is predicted in the near future but the investors should keep all the points in mind, before taking the plunge.
3. System - The Bulgarian business regulations are in their early stages and much needs to be done to regulate and protect businesses. Some work on liberalization and regulation, supported by implementation of the regulations already in place, would be needed to improve the business potential.
Bulgaria has a huge potential for investment and overcoming the current problems can unlock many opportunities.