Nearly 900 Greek Companies Expected to Move Their Businesses in Bulgaria Until the End of 2011 – Part II

Regarding the tax rates in the countries from the European and specifically the Balkan area, Bulgaria definitely stands out of the crowd by keeping its VAT tax, Personal Income Tax and Corporate Tax rates lowest (see table 1 below). Moreover, less than a month ago the Parliament accepted the so called “Financial Stability Pact” which main mission is to ensure a financial and fiscal stability in the country by freezing the tax rates and making the procedure for increasing them much harder.

Table 1

Of course, taxes are not the only stimulator of attraction for the Greek companies coming to Bulgaria. As many Greeks claim, Bulgarian low prices of food, transportation, rents and real estates are serious incentives for moving business here. In addition, businessmen are seriously attracted by the much lower priced labor force and the big diversity of unexplored investment opportunities.

In an interview for a Bulgarian TV channel, Evangelos Litras, deputy president of the Greek Business Board, stated that due to the recession it is absolutely normal and completely understandable that most of the Greek companies migrate to Bulgaria and that he expects this tendency to continue. Mr. Litras admitted that Bulgaria is destination №1 for Greek investors and this is mainly because of the very close map location, Bulgaria’s strict fiscal discipline and for having one of the lowest external debts among all the EU countries.

It can be sum up that Greece, being the forth bigger foreign investor in Bulgaria, after the Netherlands, Belgium and Cyprus, will be looking up to Bulgaria more and more often from now on and this is seriously going to improve and diversify the investment climate in Bulgaria.

The National Registry Agency in Bulgaria has announced that there has been a tremendous increase into the number of Greek investors who register companies and move their entire businesses in Bulgaria. This statistics was officially presented yesterday, on 4th of July, on one of the biggest Bulgarian National TV channels. The numbers presented by the Registry Agency indicate that the number of registered Greek companies is expected to be nearly three times bigger than those presented two years ago. In 2009, 312 Greek companies were registered in Bulgaria, in 2010 these companies were 523 and this year the forecast is for 836 new Greek companies in Bulgaria, based on the fact that the number for the first half of the current year is 418.
Most of the new Greek companies are being registered for the realization of serious business intentions, which argument is greatly supported by the following statistics. Since the beginning of this year up until now, only 6 Greek companies have been dissolved, compared to 179 re-registered and 418 newly registered. This serious retention level of the actual functioning Greek companies comes to show that the investments directed to the Bulgarian market and their rates of return have been assessed positively by the investors. We are now in a position to start talking about a short-term turning into a middle-term tendency.
Further to the statistics exposed above, it is important to be mentioned that the progressively growing Greek investment interest towards Bulgaria does not come out of the blue. On the contrary, it has been forecasted by many economists and strongly justified by the dramatic outcome of the economic and financial crisis in Greece on one hand, and the numerous advantages that the Bulgarian market has to offer on the other.