2006 InvestBulgaria Agency
www.investbg.government.bg
BULGARIA
Bulgaria Investment Guide 2006
YOUR
MOVE
Business
environment
and key Business
environment
and key sectors
Business Environment
1. Investment Feature: Flagship project 2006 3
2. Investment climate in Bulgaria 4
3. General economic indicators 4
4. Demographic data on Bulgaria 5
5. Comparison between Bulgaria and Europe 5
6. Bulgaria and the world 5
7. Foreign direct investment in Bulgaria: Southeast Europe’s leader in attracting FDI 6
8. Top 25 foreign investors in Bulgaria for the period 1992 – 2004 6
9. Legal conditions for investment in Bulgaria 7
10. Employment issues 9
11. Incentives 11
12. Key procedures 14
12.1. Company registration 14
12.2. Construction 15
Key Sectors
13. Medical & Pharma Sector 17
14. Energy & Environment Sector 25
15. Banking & Financial Services Sector 35
16. Infrastructure & Logistics Sector 43
17. Food & Beverage Sector 51
18. Precision Engineering Sector 57
19. ICT and Business Process Outsourcing (BPO) Sector 63
TABLE contents of
2
INVESTMENT FE ATURE:
FL AGSHIP PROJECT 2006
Hewlett-Packard will create 1000 jobs in Bulgaria in 2006-2007
Hewlett-Packard, the world’s number two computer maker, chose Bulgaria among 14 European countries for the establishment of its new
Global Delivery Support Center employing 1,000 IT professionals in Sofia to service HP customers in Europe, the Middle East and Africa.
Project: The support center in Bulgaria will be a part of the global network of services and customer support sections of Hewlett-Packard.
Countries like India, China, Costa Rica and Slovakia are already a part of this network. The centers provide IT support to companies, perform
diagnostics of critical IT systems and assist client services teams at second and third level support.
Site: 10,000 sqm premises on the territory of Business Park Sofia
Timeline:
• Start of location analysis: June 2005
• Decision announced: January 2006
• Start of operations: June 2006
• Competitors for the project: Romania, Slovakia and Russia
• Reasons to choose Bulgaria: economic and financial stability, availability of qualified and multilingual IT specialists, institutional support
and competitive incentives package
Partners: Ajilon and SITEL
Ajilon is specialized in providing management and consulting services, and human resources recruitment. The company is a part of the Adecco
Group, known as the largest HR services company in the world. SITEL is an outsourcing company, supporting its clients through a large
worldwide network of call-centers. The company has been operating in this field for over 20 years and operates 88 call-centers. Following an
outsourcing scheme, Ajilon and SITEL will take and carry out some of the services of the new support center in Bulgaria.
Hewlett-Packard Bulgaria: main office in Sofia since 1998
HP Consulting and Integration Bulgaria has established a successful and long-term relationship with most of the major customers in all segments
of the economy: Ministry of Interior, Bulgarian Telecommunication Company, Mobiltel, GloBul, KCM S.A., etc.
HP Consulting has its cross-country expertise, which makes possible the successful completion of strategic projects in some neighbouring
countries: Real Time Gross Settlement system in the National Bank of Serbia, Real Time Gross Settlement system in the National Bank of
Macedonia, the Interconnect billing system in MobiMak (the largest mobile operator in Macedonia), Enterprise security and IT management in
Macedonian Telecommunications, etc.
Mr. Pavel Ezekiev, Executive Director of InvestBulgaria Agency: “InvestBulgaria Agency ensured the institutional and administrative support
of the project of HP, presenting the company with access to the labor market and academic institutions. The Bulgarian Government also authorized
a set of incentives. The decision of Hewlett-Packard to choose Bulgaria demonstrates the competitiveness of Bulgaria as an attractive
outsourcing destination for leading IT industry players, who value highly the combination of niche skills, stable environment and flexibility”.
3
INVESTMENT CLIMATE IN BULGARIA
GENERAL ECONOMIC INDICATORS
Predictability
Five year average GDP growth of 4.9%
Budget surplus, low inflation, currency peg to EUR
80% private economy
EU accession in 2007, NATO member
Investment grade rating BBB by S&P and Fitch
Foreign direct investment at 11.7% of GDP (EUR 2.3 bn in 2004)
Quality
Quality of human capital
- Education levels among Europe top 5%
- 7% of workforce has engineering degrees
- English language studied by 70% of students
- Motivated and entrepreneurial attitude
Quality of business environment
- Strong institutional support for foreign investors by IBA
- No restrictions to capital flows
Quality of life
- Ample opportunities for all-season outdoor recreation
- Diverse cultural heritage and art activities
- World renown food and beverages
Competitiveness
Highly qualified workforce, especially in engineering field
15% corporate tax rate
Tax exemptions and investment incentives for qualified
investment
Among lowest operational cost in a European market economy
Duty free agreements covering markets with 550 m customers
58 Double Taxation Treaties and 56 Agreements on the mutual
protection and promotion of foreign investment
2000 2001 2002 2003 2004 2005E
GDP (EUR bn) 13.7 15.2 16.5 17.6 19.4 21.1
GDP growth (%) 5.4 4.1 4.9 4.5 5.6 5.2
GDP per capita (EUR) 3.274 3.704 4.109 4.398 4.901 5.329
Population (m) 8.2 8.0 7.9 7.8 7.7 7.7
Unemployment (eoy, %) 18.0 17.9 16.3 13.5 12.2 10.6
Average monthly gross wage (avg, EUR) 115 123 132 140 154 162
Export (EUR m) 5.253 5.714 6.063 6.668 7.994 9.611
Import (EUR m) 6.533 7.493 7.755 8.868 10.712 13.010
FDI (EUR m) 1.103 903 980 1.851 2.278 2.200
FDI (% of GDP) 8.1 5.9 5.9 10.5 11.7 9.5
Inflation (avg, %) 10.3 7.4 5.8 2.3 6.1 4.4
Budget deficit (% of GDP) -1.0 -0.9 -0.7 0.0 1.7 -0.3
Government debt (% of GDP) 85.8 69.9 55.9 48.4 43.5 41.0
EUR/BGN exchange rate – pegged at 1.95583 1.96 1.96 1.96 1.96 1.96 1.96
USD/BGN exchange rate (annual avg) 2.12 2.18 2.08 1.73 1.57 1.56
Base interest rate (avg, %) 3.97 4.59 4.00 2.70 2.60 n.a.
Sources: Bulgarian National Bank, National Statistics Institute, Employment Agency, Ministry of Finance
Estimates by Agency for Economic Analysis and Forecasts (as of 29.08.2005), InvestBulgaria Agency and Economist Intelligence Unit
*eoy = end of year
Bulgaria’s Credit Rating
Baa1/BBB+
Dec-97
Jun-98
Dec-98
Jun-99
Dec-99
Jun-00
Dec-00
Jun-01
Dec-01
Jun-02
Dec-02
Jun-03
Dec-03
Jun-04
Dec-04
Jun-05
JCRA S&P Moody's Fitch
Baa2/BBB
Baa3/BBBBa1/
BB+
Ba2/BB
Ba3/BBB1/
B+
B2/B
2005 Index of Economic Freedom of Bulgaria
(The Heritage Foundation)
3.56 3.50 3.53
3.60
3.49
3.35
3.28 3.28
3.23
2.98
2.74
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
Worst (4.0) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best (0.0)
Mostly free
Corporate tax in Bulgaria
23.5%
19.5%
15.0%
0%
10%
20%
30%
2003 2004 2005
4
DEMOGRAPHIC DATA ON BULGARIA
COMPARISON BETWEEN BULGARIA AND EUROPE
BULGARIA AND THE WORLD
Population by sex, end-2004
Total (‘000) Male (‘000) Female (‘000) Urban population
Total 7,761 3,768 3,993 70.0%
Population by age-group, end-2004
Age group 0 – 14 15 - 29 30 - 44 45 - 59 60 - 74 75 +
% of total 13,8% 21,2% 20,9% 21,3% 15,9% 6,9%
Source: National Statistics Institute
GDP
(USD bn),
2004
Average GDP
growth,
2003 - 2005E
Average
inflation,
2003 - 2005E
Corporate
tax rate,
2005
Labour costs
(USD/hour),
2005E
Average labour
cost growth,
2004 - 2006E
Bulgaria 24 5.3% 4.3% 15% 1.1 2.33%
Italy 1,678 0.5% 2.3% 33% 21.4 0.65%
Turkey 302 6.5% 14.0% 33% 2.4 0.85%
Russia 582 6.9% 12.5% 24% 1.7 5.70%
Romania 70 6.2% 12.0% 16% 1.4 5.59%
Greece 206 4.1% 3.4% 30% 13.7 1.46%
EU-15 12,094 2.0% 1.8% n.a. 28.3 0.90%
Source: Economist Intelligence Unit, Eurostat
Export by commodity, 2004 Export by country, 2004
Import by commodity, 2004 Import by country, 2004
Source: Bulgarian National Bank
Other
consumer
goods
13.5%
Other raw
materials
24.1%
Metals
19.5%
Clothing and
footwear
19.4%
Mineral fuels, oils
and electricity
10.1%
Investment
goods
13.4%
Italy
13.1%
Germany
10.2%
Other Balkans
10.6%
Other EU-25
14.5%
Turkey
10.0%
USA
4.5%
Asia
6.0%
Other countries
10.7%
Greece
9.9%
France
4.6%
Belgium
6.0%
Raw
materials
40%
Investment goods
27%
Energy
resources
17%
Consumer goods
16%
Italy
11%
Greece
7%
France
Other EU-25 6%
22%
Germany
17%
Other Asian
11%
China
4%
USA
3%
Other American
countries
7%
Balkans
12%
5
FOREIGN DIRECT INVESTMENT IN BULGARIA: SOUTHEAST
EUROPE’S LE ADER IN AT TRACTING FDI
TOP 25 FOREIGN INVESTORS IN BULGARIA
FOR THE PERIOD 1992 – 2004
FDI inflow in Bulgaria 1995-2005E, EUR m FDI stock by country, 1992 – 2004
FDI as % of GDP, 2004 FDI stock by sector, 1998 – 2004
Sources: InvestBulgaria Agency, Bulgarian National Bank, Vienna Institute for International Economic Studies (WIIW)
Investor Country Bulgarian company Sector
OTE Greece Globul, Cosmo Mobile Mobile telecommunications
OTP Hungary DSK Bank Banking
Unicredit Group Italy Bulbank Banking
CEZ Czech Republic ER Sofia, ER Sofia - region, ER Pleven Electricity distribution
EVN Austria ER Plovdiv, ER Stara Zagora Electricity distribution
Viva Ventures / Advent International USA / UK BTC AD Fixed-line and mobile telecommunications
Lukoil Russia Neftochim AD, Petrol AD Petrochemicals, retail fuel
Solvay Belgium Sodi Devnya Chemicals (soda ash)
Umicore / Cumerio Belgium Cumerio Pirdop MED Copper smelter
National Bank of Greece Greece United Bulgarian Bank (UBB) Banking
American Standard USA Vidima, Ideal Standard Sanitary ware
E.ON Germany ER Varna, ER Gorna Oryahovitza Electricity distribution
Miroglio Italy Miroglio Bulgaria, Interpred Textile, real estate
Bank Austria / HVB Austria HVB Bank Biochim Banking
OMV Austria OMV Bulgaria Retail fuel
Shell UK / Netherlands Shell Bulgaria, Shell Gas Bulgaria Retail fuel
Sisecam Turkey Trakia Glass Glass industry
EMTF+ Mobiltel Holding Austria Mobiltel AD Mobile telecommunications
Knauf Austria Knauf Gipsfazer Building materials
Raiffeisen Bank Austria Raiffeisen Bank Bulgaria Banking
METRO Germany Metro Cash & Carry Bulgaria Department stores
Bareck Overseas Cyprus Druzhba - Plovdiv Glass industry
Willi Betz Germany SO MAT Transport & logistics
Holcim (Holderbank) Switzerland Beloizvorski Cement Cement industry
Carlsberg Denmark Carlsberg Bulgaria Brewery
Cyprus
5%
USA
5%
Hungary
5%
Belgium &
Luxembourg
5%
Other
29% Austria
16%
Greece
10%
Netherlands
9%
Germany
9%
Italy
7%
Industry
25%
Trade
18%
Construction
2%
Other
17%
Tourism & Real
Estate
7%
Telecom
12%
Finance
19%
137
570 605
866
1,103
903 980
1851
2,278
2,200
0
500
1000
1500
2000
00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E
EUR million
25
Greenfields, additional FDI, reinvestment Privatization
11.7%
7.1%
4.6% 4.2% 4.2%
3.5%
2.7% 2.6% 2.5% 2.1%
0%
2%
4%
6%
8%
%
%
%
Bulgaria Czech
Republic
Croatia
10
12
14
Romania Hungary Serbia &
Montenegro
Slovakia Poland Slovenia Russia
6
LEGAL CONDITIONS
FOR INVESTMENT IN BULGARIA
Corporate Income Tax
Under the Corporate Income Tax Act (CITA) all companies and partnerships (including non-incorporated partnerships), carrying out business
in the country, are liable to a corporate income tax at a rate of 15%. Bulgarian resident entities are taxed on a worldwide basis. Foreign entities
are taxed on their Bulgarian-source income. Companies are considered to be tax resident if they are registered in Bulgaria. Companies that are
non-residents in Bulgaria, but operate in Bulgaria through a branch, office, agency or other form of a permanent establishment are only liable to
tax on the profits generated through their Bulgarian establishment.
Annual profit must be declared no later than 31 March of the year following the taxable year. Generally, the taxable profit is determined in
accordance with the financial result reported in the Profit and Loss Account (“P&L”) adjusted for tax purposes. Depreciation is calculated by
systematically applying the straight-line depreciation method. Depreciation norms should not exceed the following rates:
Taxation
Category of assets Assets description Annual depreciation norms (%)
I steady buildings, facilities, communication devices, electricity carriers,
communication lines
4
II machinery, manufacturing equipment, apparatus 30 or 50*
III transportation vehicles, excluding automobiles;
coverage of roads and airplane runways
10
IV computers, software and right of using software 50
V automobiles 25
VI all other depreciative assets 15
* 50% for new equipment used in entirely new investment or expansion
Withholding Taxes
Certain types of income from sources in Bulgaria and payable to non-resident legal entities (if not generated through a permanent
establishment) or individuals are subject to withholding taxes. The types of income are defined in CITA as:
dividends and liquidation quotas
interest, including such under finance leases
royalties
technical services remuneration
rents
payments under operating leases, franchising and factoring
capital gains from transfer of shares in local companies, securities issued by the State, a municipality or a local entity and local real estate
The withholding tax rate is 7% on dividends and liquidation quotas and 15% on the other types of taxable income. The withholding tax rate may
be reduced under an applicable double tax treaty.
Personal income tax
Under Personal Income Tax Act (PITA) tax liable persons are individuals - residents and non-residents, and corporate entities explicitly
enumerated therein. Residents are considered individuals who reside in Bulgaria longer than 183 days for each 365 days period. Residents are
liable for their world-wide income. Non-residents are considered those individuals who do not fit the above criteria for residents. Non-residents
are liable only for their income derived from Bulgarian sources.
7
VAT
The Value Added Tax Act (VAT Act) currently in force is effective as from 1 January 1999. Although Bulgaria is not a member of the European
Community, the VAT legislation in many aspects follows the provisions of the Sixth VAT Directive.
The standard VAT rate is 20%. Zero rate of VAT applies to exports of products, certain eligible exports of services, as well as to some other
transactions.
VAT registration
Bulgarian and foreign businesses which carry out taxable transactions with a place of supply in Bulgaria and have a taxable turnover of at least
BGN 50,000 during the preceding 12 months is obliged to register for VAT purposes. Non-residents, except for branch offices, are registered for
VAT through a VAT representative.
Voluntary VAT registration is available in some specific cases such as:
• If during the preceding 12 months the business has a taxable turnover of above BGN 25,000 but less than the compulsory for VAT registration
BGN 50,000 (in force after April 1, 2006);
• If a company incorporated in Bulgaria has a registered and paid up share capital of at least BGN 500,000.
There are special rules for the VAT registration in some cases of commercial companies’ transformation and acquisition.
VAT credit refund
Where VAT incurred on purchases exceeds VAT charged on sales, the excess VAT deduction is first carried forward for a period of three
months to offset VAT debt due in these three months. If at the end of the three-month period the excess VAT or part thereof has not been
recovered, the balance is refunded within 45 days after the date of filing of the VAT return for the third month.
Companies whose turnover consists of at least 30% of export transactions are entitled to refund VAT with 30 days after filing of
the VAT return.
Monthly income Tax
up to BGN 180 non-taxable
from BGN 180 to BGN 250 20% on the excess over BGN 180
from BGN 250 to BGN 600 BGN 14 + 22% on the excess over BGN 250
above BGN 600 BGN 91 + 24% on the excess over BGN 600
Annual income Tax
up to BGN 2,160 non-taxable
from BGN 2,160 to BGN 3,000 20% on the excess over BGN 2,160
from BGN 3,000 to BGN 7,200 BGN 168 + 22% on the excess over BGN 3,000
above BGN 7,200 BGN 1092+ 24% on the excess over BGN 7,200
The annual taxable base is the sum of all taxable incomes received during the calendar year. The total annual income is subject to some
adjustments and is then taxed in accordance with an annual progressive scale as follows:
Local entities with annual turnover for the preceding year up to BGN 50,000 are taxed by a final annual (patent) tax for income resulting from
sources in Bulgaria.
Personal income tax (as of 1 January 2006)
Incomes derived under an employment contract are taxed on a monthly basis as follows:
8
EMPLOYMENT ISSUES
Working hours: 8 hours a day. A 24 hour rest period is required during a 7-day period.
Annual leave: not less than 20 days.
Retirement age: minimum of 63 for men and 58½ (2006) for women 1.
Minimum monthly gross salary: EUR 82 (BGN 160)
Average monthly gross salary: EUR 167 (Sep 2005)
Social security: A complex system covering retirement, health and unemployment risks and obligations. Side costs to the amount of 23.6
to 24.3% of the gross monthly salary are to the account of the employer.
The above contributions are calculated on the remuneration and other employment income of the employee for the respective month but
on not more than the maximum monthly insurance base fixed annually in the Mandatory National Insurance Budget Act. The fixed base for
2006 is BGN 1,400 (around EUR 716). Since January 2003 minimum monthly insurance bases for the main economic activities and groups of
professions have been introduced.
Labor contracts: According to the Labor Code the employment contract may be concluded for an indefinite period of time or, alternatively,
as an employment contract for a fixed term. An employment contract is considered to be concluded for an indefinite period unless explicitly
agreed and stated otherwise. An employment contract concluded for an indefinite period may not be changed to a fixed-term contract unless
explicitly requested by the employee, and stated so in writing.
1. An employment contract for a fixed term may be concluded:
for a definite period no longer than 3 years – upon request in writing by the employee or for execution of temporary, seasonal or
short-term work and activities
until completion of some specified work
for substitution for an employee who is absent from work
for a job, which is to be taken through a competitive examination, for the time until it is taken on the basis of the competitive examination.
Type of insurance
Paid by
Total (%)
Employer (%) Employee (%)
Health 3.9 2.1 6.00
Social:
Pension insurance fund 15 8 23.00
Sickness insurance fund 2.3 1.2 3.50
Employment insurance fund 0.4 to 1.1 0.00 0.4 to 1.1
Unemployment fund 2 1 3.00
Total 23.6 to 24.3 12.3 35.9 to 36.6
1 For women the minimum retirement age is being increased by ½ year annually. There are certain limits set that will no longer be changed: - 60 years for
women; the limit will be reached in 2009.
9
2. Employment contract for a trial period
In cases when the work requires the ability of the employee who will perform it to be tested, his final appointment may be preceded by a
contract providing for a trial period of up to 6 months. Such a contract may also be concluded in the case when the employee wants to
make sure the job is suitable for him. This contract indicates to whose benefit has been agreed the trial period. Prior of the expiration of
the trial period, the party to whose benefit it has been agreed may terminate the contract without notice.
Termination: Employees other than senior management cannot be dismissed without sufficient justification. The employee has the
right to sue for damages for unfair dismissal. Certain people cannot be dismissed during absence (e.g. on sick leave, pregnant, nursing
mothers, military assignment).
Notice periods are usually 30 days. If the employee, working under an indefinite-period contract, is dismissed without a notification and
there is a sufficient justification by the employer, the employee is compensated by 1 monthly salary.
If the relation is based on a term contract, the compensation is equal to the amount of the gross salaries to be paid for the rest of the
contract time.
The employer can initiate a dismissal of the employee on “mutual consent” terms. In this case, he has to compensate the employee with
at least 4 monthly gross salaries.
Upon dismissal due to closing down of the enterprise or part of it, staff reduction, reduction of the volume of work and work interruption
for more than 15 working days, the employee is entitled to compensation from the employer. The compensation is in the amount of his
gross labour remuneration for the period of unemployment but not for more than one month. A compensation for longer periods may be
stipulated by a collective contract or by the labour contract.
Upon termination of the employment relationship after the employee has acquired the right to a pension for insured service and age,
irrespective of the grounds for the termination, he is entitled to compensation by the employer in the amount of his gross labour
remuneration for a period of two months; where the employee has worked with the same employer for the last ten years of the length of
service, the compensation is equal to his gross labour remuneration for a period of six months.
Employment of foreign persons: All foreign persons that have a permanent residence permit or are granted the right of
sanctuary or refugee status can be employed in the same way as Bulgarian citizens. Temporary work permits are issued by the National
Office of Employment of the Ministry of Labour and Social Policy. The work permits are issued for a specified time, job and employer.
The permit is issued after a request by the employer and is valid for the time of the employment contract but not more than one year.
The permission can be prolonged several times but within a three year period. The total duration of the work permit with its extensions
could not exceed 3 years, except for managers of companies and branches of foreign companies established on the territory of the
Republic of Bulgaria and specialists of foreign companies for exercising control and receiving of contracted production.
Foreign persons that have an employment contract and a valid work permit can acquire a residence permit in the country for the time
of the contract but for no more than one year. The permission for continuous residence can be prolonged if the work permission is
prolonged but the maximum period for prolongation of the work permission cannot exceed three years.
The number of employees who are foreign citizens cannot be over 10% of the total work force.
10
INCENTIVES
Investment incentives are available to companies registered in Bulgaria, regardless owner’s nationality.
1. The Investment Encouragement Law regulates the terms and procedures
of investing in Bulgaria.
The Investment Encouragement Law sets forth preferential treatment measures for investments meeting the following criteria:
1. The investment to be in acquisition of fixed assets with the purpose of creating new or enlarging, or modernizing existing production of
goods and/or services;
2. New jobs to be created;
3. The investment project to be implemented within 3 years.
The measures are differentiated according to the class of investment. There are three classes, depending on the investment project value. The
value thresholds are stipulated in the Rules on the Enforcement of the Investment Encouragement Law as follows:
1st class – investment over BGN 70 million (€ 36 million);
2nd class – investment from BGN 40 to 70 million (€ 20-36 million);
3rd class – investment from BGN 10 to 40 million (€ 5-20 million).
For all investment classes, central and regional government authorities, as well as municipal authorities provide faster administrative services
(issue of licenses, permits, etc.) to investors i.e. within 1/3 shorter periods than the usually needed.
Apart from faster administrative service, 3rd-class investments receive information services by InvestBulgaria Agency as follows:
Country economic analysis and sector information materials;
Information about potential partners in the country;
Advice regarding all administrative procedures concerning the implementation of the investment project.
For 2nd-class investments, InvestBulgaria Agency provides investors with:
Information services and
Individual administrative services with respect to all central and regional government authorities. Investors will have the opportunity to
authorize officials of the Agency to obtain from the corresponding competent bodies, on behalf of investors and for investors’ account, all
necessary documents for the implementation of the particular investment project as may be required under the existing legislation.
For 1st-class investments, InvestBulgaria Agency assists investors by providing:
Individual information and administrative services;
Assistance with real estate acquisition – On the request of the 1st-class investor the Agency may propose to the corresponding authorities
owning the land plot, selected by the investor, to sell ownership rights or establish limited ownership rights over the respective real estate
(private state or private municipal property), necessary for the implementation of the investment project without opening tender procedure
or on preferential price;
Assistance for receiving infrastructure support – the state, through the Minister of Economy and Energy, supports eligible 1st-class
investment projects through construction of the necessary technical infrastructure to the borders of the investment project site.
2. Programmes and measures for employment of young and/or disadvantaged people
on the labour market in Bulgaria
1. If the requirements below are met, the Employment Agency may cover the amount of salary expenses and the due installments on account of
the employer to the funds of the Social Security Institute and to the Health Insurance Fund for the duration of the employment contract for each
hired person (but no longer than 12 months), as well as the expenses for training for acquiring professional qualification (no longer than 6 months).
11
Requirements:
The person has to be directed by the division of the Employment Agency on the basis of contract between the Agency and the employer
Unemployed up to 29 years of age or disabled militaries
Unemployed up to 29 years with reduced working capacity
Young people from social institutions who have completed their education
Unemployed with permanently reduced working capacity
Unemployed – single parents (adoptive parents) or mothers (adoptive mothers) with children up to 3 years of age
Unemployed women over 50 years of age and men over 55 years of age
The same incentive is valid for employer who admits for training for acquiring professional qualification and/or work on probation unemployed
persons under 29 years of age, directed by the divisions of the Employment Agency on the basis of the contract concluded, for the term of
education or work on probation, but no longer than 6 months.
Programmes and measures for training during lifetime:
1. An employer who provides maintaining and improvement of the qualification of the hired workers and employees can apply for granting of
half of the maximum determined size of the sums for training of one person (the maximum sum is BGN 450 according to the National Operative
Employment Plan).
Steps of the procedure:
The local division of the Employment Agency - “Employment bureau” announces every month on an information board and in at least two
local or regional mass media the encouragement measures, for which contracts can be concluded with employers during the following month
The employer submits an application at the local “Employment bureau” and files a declaration to keep the employees for at least 6 months
after the successful end of the training
In 3 days term after the expiry of the term for application, the Council for co-operation discusses the submitted applications and proposes
to the director of the “Employment bureau” a list of the employers, with whom contract could be concluded during the respective month
List of the approved employers is put on the information board of the “Employment bureau”
The employer has the right to carry out training for acquiring professional qualification appointing a training organization, within the frames of
the maximal size of resources for training of one person (BGN 450).
3. a) Tax incentive for investments in regions
with high unemployment
As of 1 January 2005 corporate income tax in Bulgaria is 15%.
Regions with high unemployment
Incentives are available for investments in high unemployment regions included in a list approved by the Minister of Finance. The incentives
are subject to some advance and subsequent filing requirements and notifications. Where the value of the exemptions/incentives and other
state aids for regional development exceeds BGN 75 million, a clearance from the Competition Protection Commission is required. Where the
amount of the state grants and subsidies (including the tax incentives) does not exceed BGN 200,000 in a three-year period, the tax incentives
can be used under less strict conditions.
Tax exemption for manufacturing companies
Manufacturing companies which invest in high unemployment regions are entitled to complete exemption from corporate income tax, subject to
the following basic conditions:
All business sites and premises of the taxpayer have to be located in the respective high unemployment region;
All assets of the taxpayer (except for cash in bank accounts and investments in associates and subsidiaries) have to be located in the
respective high unemployment region;
The taxpayer should not have outstanding and non-disputable liabilities for taxes or social insurance or penalty interest thereon for the
respective year in which the exemption is claimed.
12
3. b) Dividends and liquidation shares, calculated by a local person in favour of a foreign
natural or legal person, local for an EU member-country, are not subject to
withholding tax under the conditions that:
1. According to the tax legislation of the respective EU member-country, the person is considered as local of this country for tax purposes and,
by force of an agreement for avoiding the double tax levying with a third state, is not considered as local person of a state out of the EU
2. The person is levied with corporate tax, without having the right of choice or exemption from levying with this tax
3. The person is the actual owner of the income and holds at least 20% of the shares/stocks of the local entity
3. c) Special preferential VAT regime for imports of goods necessary for the
implementation of an investment project
VAT-registered investors performing certain eligible investment projects are entitled to import assets needed for the project without effective
payment of import VAT. Moreover, such investors are entitled to refund VAT incurred on local purchases within 10 days after filing of the tax
return, provided that at least 80% of the monthly VAT charges incurred on purchases are paid through a VAT account.
In order to benefit from the special investment rules, the investor needs to obtain an advance approval from the Ministry of Finance. In order to
receive the approval, the investment project must meet certain conditions:
The size of investment should be at least BGN 10 million (EUR 5 m) for a period not exceeding 2 years;
The period for the completion of the project should not exceed two years;
The project should result in the creation of at least 50 new jobs;
The project should be eligible for state aid for regional development;
The investor should prove his ability to finance the project.
4. Reduction of corporate tax base with the expenditure made for research and development
(R&D) in cooperation with research institutes and/or universities
The amount of the tax credit for each year should be invested in manufacturing activities within a period of three years after the end
of the year in which the exemption was claimed. The eligible investment should consist of fixed tangible assets or licenses, patents and
know-how at a value not exceeding 25% of the costs of the fixed tangible assets. The investor is also required to invest own funds of at least
25% of the amount of tax credit. Some other additional conditions are also required to be met. The assets acquired could not be disposed for a
period of 5 years, except for in cases of merger or reorganization.
The incentive is available continuously, subject to meeting its conditions in each respective year. If the respective region is excluded
from the list of the high unemployment regions, the incentive can be applied only for another 5 consecutive years. Where a company started
preparatory work for investing in a high unemployment region, but prior to commencement of manufacturing the region was excluded from the
list, the company is still eligible to use the incentive for a period of four years.
High unemployment
municipalities
providing
opportunities for
corporate tax breaks
in 2005 (in green)
13
KEY PROCEDURES
Company registration
Registration of Limited Liability Company
Authority District Court
Required documents
and procedure
The LLC is founded or owned by one or more persons, including foreign natural or legal persons. The minimum authorized capital is BGN 5,000.
Forming a Limited Liability Company
• Reservation of the name of the company and issuance of a certificate for uniqueness of the name – BGN 100;
• Composing articles of association or founding a deed for a single-member LTD;
• Formation of company’s share capital (at least BGN 5,000)
• Issuance of bank deed certifying that at least 70 % of the registered capital has been paid;
• Appointment of managing body;
• Registration in the commercial register of the relevant district court by the appointed manager who possesses representative power – BGN 120;
• Issuance of a permit from the competent body for performing specific commercial activity before entry into the commercial register (e.g.
investment broker);
• Completion of the establishment: court decision for entry into the commercial register;
• Publication of the registration into the state gazette – BGN 25;
• Registration at the respective territorial division of the Registry Agency (issuance of a BULSTAT number) within 7 days after the
establishment of the company – BGN 60;
Necessary documents for registration in the Commercial Register
1. Application for registration
2. Memorandum of association
3. Constituent meeting minutes
4. Notary certified consent with specimen of signature for each of the managers
5. Declaration in compliance with art. 142 CA (Commercial Act)
6. Bank document of capital deposited
7. Company name uniqueness certificate
8. Certificate for actual status of a shareholder-legal person
9. Decision of the managing body of a shareholder-legal person
10. Receipt for paid state taxes
11. Receipt for paid state tax for publishing in the State Gazette
Fees Registration - BGN 120; Duplicate of court decision - BGN 1.5 and BGN 1 per page; Reservation of the name of the company and issuance of a
certificate for uniqueness of the name – BGN 100; Publication in the State Gazette - BGN 25
Timeframe Not specified (practically 1-2 weeks)
Legal framework Commercial Law
Registration of Joint-Stock Company
Authority District Court
Required documents
and procedure
Persons entitled to request registration-only the relevant managing body of the company could request registration in the Commercial register.
Preliminary preparation for the registration procedure:
1. Reservation of company name and obtaining a certificate for uniqueness of the company name
2. Holding a Constitutive Meeting, where the memorandum of association is accepted and the managing bodies are voted. At the meeting all
shares of the JSC capital should be subscribed.
3. Founders Contributions, which must be made by the founders-in money or non-cash.
Necessary documents for registration in the Commercial Register:
1. Application signed by all members of the managing body
2. Memorandum of association, accepted on the constitutive meeting
3. Minutes of the constitutive meeting, drawn in compliance with the terms and conditions of art.232 and subsequent from Commercial Law
4. List of the persons, subscribing shares upon the incorporation (founders) attested by the managing body
5. Bank document for pecuniary contributions, installed by the subscribers
6. Written consent with a notary certified signature of the contributor of a non-cash contribution
7. Notary certified signature specimens of the persons, who shall represent the company
8. Founders’ declarations (if natural persons) stating that they are not declared insolvent and court certificates for the founders-legal persons
are not declared insolvent
9. Declarations of the members of the managing authorities that they agree to become members of the relevant authority
10. Experts’ statement duly admitted by the district court if non-cash contributions are made
11. For founder-legal person-registration judgment, certificate for actual status, managing body resolution for participation in the joint-stock
company and an express notary certified power of attorney of the person who represents the legal person at the constitutive meeting
12. Receipt for paid state taxes
13. Receipt for paid fee for publishing in the State Gazette
Fees Reservation of company name and obtaining a certificate for uniqueness of the company name - BGN 200; For JSC registration - BGN 400; For
registration of banking or insurance JSC - BGN 1,500; For registration of JSC branch - BGN 200; Minimum capital for establishing JSC - BGN
50,000; For publication in the State Gazette - BGN 25
Timeframe Not specified
Legal framework Commercial Law
Registration of trade representative office of a foreign person
Authority Bulgarian Chamber of Commerce and Industry
Required documents
and procedure
1. Application form with a registration request
2. Official document for the registration of the foreign person, issued by the competent authority in compliance with the person’s national legislation
3. Resolution of the managing body of the foreign person to open a trade representation office in Bulgaria
4. Special power or attorney in the original, notary attested issued by the person in item 2 to the person authorized to register and govern
the representation office. As well as the volume of permitted rights
5. Official document indicating the persons representing and binding the foreign person
6. Original specimens of the persons, representatives in the Republic of Bulgaria by right or by special powers, notary attested
7. Document for paid fee for registration in BCCI
8. Filled-in registration card for the information system of BCCI
Fees USD 100
Timeframe 3 days
Legal framework Investment Encouragement Law
14
Construction
Procedure Transformation of the legal status of the land from agricultural to industrial (if the land purchased is agricultural)
Authority Commissions to the regional directorates “Agriculture and Forests” - when the requested area is up to 5 ha and the land is located in the land
areas of the settlements on the territory of the respective region. In the remaining cases - Commission for the Farm Lands.
Required documents
and procedure
During the procedures for change of the designation of the agricultural lands they shall be categorized in 10 categories according to the
productive capacities of the soil and climatic conditions, the relief and technological qualities of the land, its fitness for production of different
kinds of vegetal production, and the imposed restrictions of land usage, under conditions and by an order, determined by an ordinance, issued
by the Council of Ministers.
Preliminary steps and documents:
1. Act for categorization of the agricultural lands at the change of their designation, issued in compliance with the Ordinance for
Categorization of Agricultural Lands;
2. Determined necessary platform or track with a project for detailed development plan and a positive decision for environmental impact
assessment, issued by the order of the Protection of Environment Act;
3. Approved detailed development plan according to article 129 from the Spatial Planning Law;
4. Ownership title on the land.
In the presence of an approved detailed development plan the owner of the land or the investor of the site shall propose a change of the
designation of the necessary agricultural land. The commissions shall take decision for change of the designation of the agricultural land within
14 days from filing the proposal. Along with the proposal the applicant must file 2 copies of the approved detailed development plan.
Copy of the decision for change of the designation of farm lands for purposes other than agricultural shall be sent within 7 days from its
enactment by the respective commission to the cadastre office at the location of the real estate for entry into the cadastre.
Fees State fees are determined by a tariff of the Council of Ministers. The fee is paid by the owner of the agricultural land who has required the change
of its purpose or by the investor
Timeframe 90 days (60 days)
Legal framework Preservation of Agricultural Lands Law
Registration under BULSTAT
Authority The registry offices of the Registry Agency at the place of company’s headquarters (www.registryagency.bg)
Required documents
and procedure
I. Legal entities (LLC/JSC)
1. Certified copy of the document for Court registration;
2. Copy of the act for establishment (i.e. Articles of Association), defining the person who manages/represents the company;
3. Declaration indicating the following data:
• Address for correspondence on the territory of the country as well as phone, fax, e-mail address;
• Address of implementing of the activity;
• Subject of activity/basic economic activity of the company;
• Distribution of the capital;
• Legal succession;
• Partners and/or stockholders - name, citizenship, EGN/ID number or BULSTAT code and percentage participation in the assets;
• Stockholders - the state and the municipal stock holding participation (if any) and about the persons with over 10 percent participation
in the capital - EGN/ID number or BULSTAT code, name and citizenship;
4. Other data necessary for the National Statistics Institute;
5. Document for paid state fee according to a tariff, approved by the Council of Ministers.
In 7 days as of receiving the court decision for registration of the company, the manager, respectively the representative or other explicitly
authorized person, has to file the necessary documents for BULSTAT registration.
II. Sole proprietors
1. Certified copy of the document for Court registration
2. Identity card
3. Declaration indicating the following data:
• Address for correspondence on the territory of the country as well as phone, fax, e-mail address;
• Address of implementing of the activity;
• Subject of activity/basic economic activity of the company;
• Document for paid state fee.
III. Branches of foreign entities, branches of local entities, trade representative offices registered at BCCI
1. Certified copy of the document for Court registration/ registration at BCCI;
2. Copy of the decision defining the person who manages/represents the branch (for branches of local entities);
3. Declaration indicating the following data:
• Address for correspondence on the territory of the country as well as phone, fax, e-mail address;
• Address of implementing of the activity;
• Subject of activity/basic economic activity of the company;
• Document for paid state fee.
The new Law on the BULSTAT register provides for registration at the territorial divisions of the Registry Agency for issuance of an identification
code (BULSTAT number) of the following categories of foreign nationals:
1. Long-term and permanent residents exercising free-lance profession or craft activity (* Foreign nationals who don’t obtain permanent
residence permit need a permit issued prior to the commencement of the activity by the Employment Agency);
2. Foreign nationals who have no unified civil number or personal number of a foreigner (who have entered the country with a short-stay visa
- visa C) and:
• Implement commercial activity or render independent personal services in the country (such are activities which cannot be determined
as activity of an enterprise, as craftsman’s or as free-lance profession), including also through place of economic activity or
defined base or object, or
• Are insurers.
3. Foreign nationals who have acquired immovable property in Bulgaria.
The BULSTAT code is identified with identification card and till its issuing – with a registration certificate with term of validity one month. In 5 days
term after the expiration of the term the manager, respectively the representative or other explicitly authorized person is obliged to return the
registration certificate in the office in order to receive the identification card.
Upon request of the applicant, the identification card issued can be supplied with a microprocessor chip containing the data, entered in the
register in electronic form. Such card is issued in 14 days term.
Fees • Limited liability company (LLC) - BGN 60;
• Joint stock company (JSC) - BGN 120;
• Sole proprietor - BGN 25;
• Branch of foreign entity - BGN 100;
• Branch of local LLC - BGN 40;
• Branch of local JSC - BGN 80;
• Trade representative offices registered at BCCI - BGN 70;
• Branch of a non-profit organization - BGN 15;
• Foundation, partnership - BGN 40.
Timeframe One day
Legal framework Law on the BULSTAT register
15
Procedure Construction permit
Authority The chief architect of the municipality or district
Required documents
and procedure
A permit for construction in the cases when approval of investment design is not required, is issued only on the grounds of the application for
permit, document for ownership, construction right or right to build on other property by force of special law. If approval of the investment project
is required it must be enclosed with the written application.
Fees Tariff №14 for the fees gathered by the Ministry of Regional Development and Public Works
Timeframe 7 days
Legal framework Spatial Planning Law
Procedure Certificate for the compliance with the fire safety rules
Authority Director of the National Directorate ”Fire and Accident Safety”
Required documents
and procedure
1. Written request
2. Construction, technical and technological documentation
3. List of specialists and experts necessary for the certificate examinations
4. Receipt for paid state tax
5. Other requested documents when necessary
The authorities of the National Directorate “Fire and Accident Safety” examine the site for compliance with the fire safety rules within 1 month
from the date of the written request. They make a record for the results from the examination and decide if the site is in compliance with the fire
safety rules. The certificate is valid for 3 years.
Fees Article 31 of the Tariff № 4 for the fees, gathered by the Ministry of Interior determines the fees
Timeframe 1 month (14 days)
Legal framework Ordinance № I-117 for state fire prevention control, fire extinguishing and rescue activity, issued on 15.05.2003
Remark: Timeframe in brackets is applicable for certified investors according to the Investment Encouragement Law (faster administrative services).
Procedure Coordination and approval of technical or working investment project
Authority The chief architect of the municipality
The district governor if the project includes more than one municipality
The Minister of Regional Development and Public Works, if the project includes more than one district or is of national significance
Required documents
and procedure
1. Application form
2. Document proving ownership of property
3. Design visa
4. Three copies of the investment project
5. Environmental impact assessment
(Art. 144 Spatial Planning Law)
The following documents should also be enclosed:
1. Preliminary contract for connecting to the electricity distribution network with the National Electricity Company
2. Preliminary contract with the Water and Sewage Company for connecting to the water and sewage network
3. Approval of the project by the competent fire safety authority (for sites with over 200 work places and other listed buildings)
Fees According to Article 9 from the Local Taxes and Fees Law the Municipal Council determines the fees for each municipality
Timeframe 1 month (14 days)
Legal framework Spatial Planning Law
Procedure Preparation and approval of draft architectural project
Authority The chief architect of the municipality
The district governor if the project includes more than one municipality
The Minister of Regional Development and Public Works, if the project includes more than one district or is of national significance
Required documents
and procedure
1. Application form
2. Document proving the ownership of property or construction right
3. Design visa
Fees According to Article 9 from the Law for the Local Taxes and Fees, the Municipal Council determines the fees for each municipality
Timeframe 1 month (14 days)
Legal framework Spatial Planning Law
Procedure Design Visa
Authority The chief architect of the respective municipality
Required documents
and procedure
1. Application form
2. Documents for ownership title
3. Documents certifying the right to build
4. Documents for limited property rights
5. Other documents
Remark: The environmental impact assessment is conducted prior to issuance of a design permit visa in compliance with the Protection of
Environment Act
Fees According to Article 9 from the Local Taxes and Fees Law the Municipal Council determines the fees for issuing design visas for each
municipality
Timeframe 14 days (5 days)
Legal framework Spatial Planning Law
16
17
1. Why Bulgaria? 18
2. Latest deals 18
3. Medical/Pharma Fact Sheet 19
4. Legal 20
4.1. Pharmaceuticals manufacturing authorization 20
4.2. Accreditation of medical establishments 20
4.3. Medical establishments for hospital care 20
4.4. Medical establishments for non-stationary care and hospices 21
4.5. Sales Permit 21
4.6. Marketing Authorisation 21
5. Competition and partners 22
5.1. Pharmaceutical companies 22
5.2. Manufacturers of medical and dental equipment and devices 22
6. Worth knowing 23
6.1. Educated workforce 23
6.2. Sector-related exhibitions in Bulgaria 23
7. Useful contacts 24
8. Useful sites 24
TABLE contents of
Bulgaria:
Medical & Pharma Sector
YOUR
MOVE
2006 InvestBulgaria Agency
WHYBulgaria?
1. Opportunities for production of low-priced generics in the country due to low manufacturing costs
2. Expensive surgical operations can be successfully and costly carried out in Bulgaria
3. High growth potential of the pharmaceutical and medical equipment markets (15-20% per year)
4. Opportunities for carrying out dental tourism, already successfully explored in Central Europe, due to existing high
quality and price competitiveness of dental services in the country
5. Though the major local pharma companies have already been acquired by foreign players, there are consolidation
opportunities for strategic investors to gain a foothold or bolster existing presence in the region
6. Opportunities for carrying out repackaging and re-labeling of pharmaceuticals/medical devices
L ATEST deals
Vendor Investor Target Size (EUR m)
Greenfield Tokushukai Medical Corp. (Japan) Construction of a multi-functional high-tech hospital 90
Intervet Biovet Buyout of feed additives business of the animal healthcare firm Intervet, part of Akzo
Nobel
22.5
Greenfield Chaikapharma Pharmaceuticals repackaging plant 7.7
NIHFI Sopharma Sopharma integrated its chemical and pharmaceutical research institute into the parent
company
5.1
Greenfield Sopharma Pharmaceuticals plant 3.0
Greenfield GlaxoSmithKline (UK) Multi-Market Warehouse (distribution center with repackaging facility) 2.5
Greenfield Doverie Obedinen Holding Hospital construction and medical equipment supply 1.4
Brownfield Doverie Obedinen Holding 5-year non-collateralized Euro bond issuance to finance the construction and medical
equipment supply for the hospital in Sofia (annual coupon - 6.75% paid semi-annually)
1.4
Acquisition of
minority stakes
Sopharma Stakes in 3 pharma distribution companies - Global Medical (9% stake), Kaliman RT and
Ceiba (9.99% in each)
Undisclosed
Actavis Biovet Acquisition of the veterinary drug production plant in Razgrad Undisclosed
Libra Phoenix (Germany) Acquisition of the Bulgarian drug wholesaler Libra Undisclosed
Higia Actavis Conditional acquisition of Higia, Bulgaria’s largest pharmaceutical distributor Undisclosed
18
MEDICAL/PHARMA Fact Sheet
Healthcare
About healthcare in Bulgaria
One of the first countries in Europe and the world to institutionalize drug regulation and control;
More than 33,600 doctors in Bulgaria;
Approximately 7,000 certified dentists;
About 4,000 dental offices and 500 dental labs throughout the country;
1,140 patients per dentist;
Estimated growth rate of the dentistry market in Bulgaria for the 2004-2008 period is approximately
20% per annum
Pharmaceuticals, medical and dental equipment and devices
Sources: Bulgarian Drug Agency, CEEBIC
Case studies
GlaxoSmithKline (UK) ERGO Hospital (Greece)
Multi-Market Warehouse (MMW) in Sofia
MMW is a distribution center with production facility for repackaging
Investment value: EUR 2.5 million
Officially opened on November 2, 2004
Innovative technology production facility for customizing the secondary package,
providing the served markets with consignments of products with local language packs
Serves 12 markets and 55 distributors in the region Eastern Europe, Caucasus
and Central Asia
Manages stock and negotiates production programs with 25 production sites in
Europe, America, and Australia
Modern and high-technologically equipped - flexible warehouse management
system based on SAP ERP and Radio Data Network
Dispatches 150 to 200 orders per week and stores almost 1000 palettes
Operates under the control of GSK Quality Management System, based on GMP
ERGO Hospital (Greece) is one of the main producers and suppliers of medical
equipment and devices for haemodialysis and manages six medical centers
The Bulgarian entity of ERGO Hospital is Biocheck Ltd
Medical Center Biocheck was established in 1999. It is 100% Greek investment
of more than USD 1.4 million
The amount of reinvestment is USD 150,000
Biocheck is the first private medical institution in Bulgaria in the field of
diagnostic medicine
More than 67 high qualified specialists work at Biocheck
Biocheck has hi-tech equipment in the fields of radiological diagnostics,
functional gastroenterology, functional cardiology, laboratory diagnostic, dentist
and laser procedures
ERGO Hospital was attracted to Bulgaria by the high professional qualification of
Bulgarian specialists although there is not enough high technology equipment
Tokushukai Medical Corp. (Japan) Actavis (Iceland)
Tokuda multi-functional high-tech hospital in Sofia
Project value: USD 110 million
Planned to be operational in mid 2006
Tokushukai’s first hospital outside Japan
Planned to be operational in mid 2006
Will employ 1,225 medical professionals
1000 beds, 16 clinical departments, 11 surgery rooms
Ultra-modern diagnostic center, state-of-the-art equipment
Connection to long-distance consultation and therapy network systems
in Japan
Actavis Group (former Pharmaco) operates in 29 countries and employs over
7,000 people
Actavis AD (Bulgaria) is one of the largest companies within Actavis Group
Actavis AD is headquartered in Sofia and operates three manufacturing plants in
Dupnitza, Troyan and Razgrad
The Bulgarian subsidiary produces over 200 pharmaceutical products covering
most significant therapeutic classes for human use
Actavis AD is one of the biggest employers in Bulgaria, with about 2,700 employees
Actavis AD is one of the major suppliers of finished pharmaceuticals to the
former Soviet Union and a significant exporter of active pharmaceutical
ingredients (APIs) for veterinary use to more than 50 countries
State budget spending on healthcare, 2003
4.3%
6.2%
8.2%
0%
2%
4%
6%
8%
10%
Bulgaria CEE average EU-15
Pharmaceutical market volume, EUR m
297
317
360
0
100
200
300
400
2002 2003 2004
Medical equipment market
(Total USD 165 m)
European
producers
77%
Local
producers
3%
US
producers
20%
End-user market of dental equipment
and devices
Medical
Universities
10%
Dental clinics in
regional hospitals
1%
Private dental
clinics
89%
19
Legal
4.1. Pharmaceuticals manufacturing authorization
Competent authority Bulgarian Drug Agency
Purpose Starting production of pharmaceuticals
Requirements and
conditions
Required documents:
1. Application form;
2. Name and address of firm’s management;
3. Location of premises for production, control and preservation of pharmaceuticals;
4. List of pharmaceuticals and forms to be produced;
5. Documents certifying the competence of the managers responsible for production and quality control;
6. Certificate for firm’s court registration;
7. Environmental impact assessment of production according to the Environment Protection Law;
8. Permit for use of premises for production, control and preservation, issued according to the Spatial Planning Law.
If the application refers to manufacturing of radiopharmaceuticals, a permit by the competent state authority for safe use of atomic energy for peace is required.
If the application refers to manufacturing of narcotic substances and medical devices containing such substances the requirements of the Control over the
Narcotic Substances and Precursors Law have to be observed.
Time frame 3 months
Cost (Fees) BGN 10,000
BGN 800 for producers executing different steps of the manufacturing process
BGN 450 for license variations
Legal grounds
(Laws and Regulations)
Pharmaceuticals and Pharmacies for the Human Medicine Law
Ordinance No.12/2001 on the Good Practices in Production of
Pharmaceuticals, issued by the Minister of Health
4.2. Accreditation of medical establishments
Competent authority The Minister of Health upon a proposal by the Accreditation Council
Ad-hoc Expert Commission for Valuation
Purpose Conditions and procedure for implementation of accreditation of medical establishments
Requirements and
conditions
Medical establishments have the obligation to start a procedure for accreditation not later than 6 months after registration. The director of the medical
establishment upon the approval by the Board of Directors creates a medical board for self-valuation. The director files the approved report to the medical
board to the Minister of Health to start procedure for accreditation. Accreditation assessment of activities are made for the period of one to five years.
Requirements:
1. Report by the medical board for self -valuation
2. Decision for implementation of the procedure for accreditation
3. Program for management and development of medical establishment
4. List of experts involved in valuation
5. List of experts working at the medical establishment
Time frame 3 months
Cost (Fees) The amount of costs for accreditation is defined by a contract between the Minister of Health and the applying medical establishment. The amount should
be paid at least 7days before the start of the procedure.
Legal grounds
(Laws and Regulations)
Medical Establishments Law
Ordinance for the criteria, indicators and methods for accreditation of medical establishments
4.3. Medical establishments for hospital care
Competent authority Minister of Health
Purpose Foundation and registration of medical establishments for hospital care
Requirements and
conditions
Prior registration as a trade partnership or cooperation is required. The applying entity must perform hospital care activities only and files an application to
the Minister of Health to start procedure for issuance of permit for carrying out activities.
Requirements:
1. Court decision for registration; Certificate for current court registration; Unified identification code;
2. Constituting act of the applying entity and regulations for structure, activity and internal order of the medical establishment;
3. Certificate of registration in the District College of the Bulgarian Physician’s Union or the Union of the Dentists in Bulgaria for the doctors or dentists
who will manage the establishment;
4. Permit for use of premises as medical establishment;
5. Diploma for higher education of the person who will manage the establishment;
6. List of the members of the executive and controlling bodies;
7. Certificate by the District Center of Health Care where the medical establishment is located.
All medical establishments are subject to accreditation which is not a necessity for carrying out medical activities.
Time frame 3 months
Cost (Fees) BGN 5,000 – 50,000 depending on the type of trade partnership registered
Legal grounds
(Laws and Regulations)
Law for the medical establishments
Ordinance for the basic requirements to which the structure, activity and internal order of the hospital establishments , dispensaries and social welfare
homes should correspond
20
4.4. Medical establishments for non-stationary care and hospices
Competent authority The respective regional center of health care on whose territory is located the medical establishment
Purpose Registration of medical establishments for non-stationary care and hospices
Requirements and
conditions
Prior registration as a trade partnership or cooperation required according to Bulgarian legislation.
To start the procedure the legal entity files an application to the respective regional centre of health care on whose territory is located the medical
establishment.
Requirements:
1. Court decision for registration; certificate for current court registration; Unified identification code.
2. Management by a master-physician; diploma for proper education of the people involved in health care giving.
3. Certificate for entry in the register of the district college of the Bulgarian Physician’s Union or the Union of the dentists in Bulgaria for the doctors
and dentists who will manage, respectively work in the establishment
4. The permit for using the premises as medical establishment or a conclusion of the Regional Inspection for Protection and Control of the Public
Health.
Time frame Not defined
Cost (Fees) BGN 5000-50000 depending on the type of trade partnership registered
Legal grounds
(Laws and Regulations)
Law for the Medical Establishments
Ordinance for Keeping a Register of the Medical Establishments for Non-Stationary Care and Hospices
4.5. Sales Permit
Competent authority Bulgarian Drug Agency (BDA)
Purpose Prerequisite for sale in the country
Requirements and
conditions
Sale permit is not required for pharmaceuticals produced in Bulgaria. It is necessary in the following cases:
1. Import of pharmaceuticals;
2. Vaccines, toxins, sera, biotechnology products and human plasma products manufactured in Bulgaria;
3. The first three batches of medicinal products which have received marketing authorization;
4. The first three batches following identification of nonconformities with the quality requirements.
Remark: Before obtaining a sale permit marketing authorization is required.
The pharmaceuticals producer/importer or his/her representative can apply.
Required documents:
1. Application form;
2. Batch certificate of quality for each batch, issued by the producer;
3. Certificate for release of the batch issued by the competent authority of the country of the producer (in case of import of vaccines and human
plasma products)
4. Copy of the permit for import of narcotic substances or medicinal products containing such substances issued by The National Drug Control
Council under The Ministry of Health.
On its discretion BDA may conduct analyses before issuing sale permits for vaccines, toxins, sera, biotechnology products and human plasma products.
Time frame 30 days
60 days for vaccines, toxins, sera, biotechnology products and human plasma products
Cost (Fees) BGN 15 for each batch
Legal grounds
(Laws and Regulations)
Law for the Pharmaceuticals and Pharmacies for the Human Medicine
Regulation No.29/2000 on The Conditions and Order of Issuance of Sale Permits for
Pharmaceuticals, issued by the Minister of Health
4.6. Marketing Authorisation
Competent authority Bulgarian Drug Agency
Purpose Prerequisite for production, import, export and trade of pharmaceuticals in the country
Requirements and
conditions
Only the pharmaceuticals producer or his/her representative can apply.
A foreign producer can apply if he has permanent representative on the territory of the Republic of Bulgaria.
Required documents:
1. Application form;
2. Registration dossier containing administrative, pharmaceutical, pharmacological – toxicological and clinical data, specified in regulation, issued by
the Minister of Health (Regulation No 17/2001). The registration file should be presented in Bulgarian, English or Russian language.
3. For non-local producers have to be presented also:
a) A certificate for the medicine product issued by the specialized state body for control over the medicines in the country of production certifying
the compliance of the conditions of production, control and preservation with the requirements of the Good pharmaceuticals production
practice;
b) Marketing authorisations issued by the country of production;
c) Information about other marketing authorisations.
Time frame Max 7 months
Cost (Fees) BGN 200 – 3800
Legal grounds
(Laws and Regulations)
Law for the Pharmaceuticals and Pharmacies for the Human Medicine
Ordinance No.17/2001 on the Requirements to the Documentation for Permitting Use of
Pharmaceuticals, Issued by the Minister of Health
21
COMPETITION ANDpartners
5.1. Top pharmaceutical manufacturing companies
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Actavis AD (Sofia) Pharmaceuticals 58,700 2,700 (‘05) 2004
2 Sopharma (Sofia) Pharmaceuticals and biotech 57,372 1,700 2004
3 Biovet (Peshtera) Pharmaceuticals and food biotech 25,467 1,200 (‘05) 2004
4 Eurostock (Sofia) Instant drinks and vitamins 8,160 280 2004
5 Unipharm (Sofia) Solid and liquid drugs 6,472 200 2004
6 Bul Bio NCZPB (Sofia) Human medicines and in-vitro diagnostic medicine
products
4,176 326 2004
7 Vetprom (Radomir) Veterinary and human medicinal products, synthetic
substances, cosmetic goods
2,551 287 2004
8 Inbiotech (Sofia) Pharmaceuticals and chemical pharmaceutical
preparations
1,353 10 2004
9 Tomil Herb (Sofia) Herbal pills 1,287 10 2004
10 Biopharm Engineering (Sliven) Veterinary medicinal products 1,010 n.a. 2004
5.2. Manufacturers of medical and dental equipment and devices
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Medica (Sofia) Medical dressing materials 5,958 680 2004
2 Salvamed (Sandanski) Medical dressings 4,882 188 2001
3 Momina Krepost (Veliko Tarnovo) Medical devices for single use 3,016 205 2004
4 Etropal (Etropole) Medical devices for single use 2,695 246 2004
5 Berchtold Bulgaria (Sofia) Manufacture of medical electronics, lathed and cut
parts for surgical lamps and tables and autonomous
gas installations
1,768 44 2004
6 Art Colenta Bulgaria (Sofia) Medical equipment 1,327 36 2004
7 Medical Equipment (Sofia) Medical, pharmaceutical, dental and physiotherapeutic
equipment, hospital furniture
905 298 2004
8 Centillion (Sofia) Medical equipment 844 31 2004
9 Optela - Optic Technologies (Plovdiv) Industrial CO2 lasers systems and laser optics 508 107 2004
10 Dimson (Sofia) Lens and rims for spectacles 364 26 2004
11 Gama Proekt JSC (Gabrovo) Manufactures surgery and reanimation equipment,
dental equipment, instruments
358 186 2003
12 Intergalenika (Plovdiv) Medical devices (Concentrates for hemodialysis) 179 14 2003
13 Optica Laser (Sofia) Manufacture of laser systems for surgery, dentistry and
physiotherapy
137 11 2002
14 Ochna Optika i Korektsiya (Sofia) Optics and eye correction 112 32 2004
Source: Bulgarian Industrial Association
22
6.1. Educated workforce
University / College Location Majors
U1 Medical University – Sofia
http://mu-sofia.bg
Sofia Health care
Health management
Medical rehabilitation and
ergo therapy
Medicine
Pharmacy
Dentistry
U2 Medical University - Plovdiv
http://meduniversity-plovdiv.bg
Plovdiv Medicine
Dentistry
Pharmacy
U3 Medical University
www.vmi-pl.bg
Pleven Medicine
Health care
U4 Medical University - Varna
www.mu-varna.bg
Varna Medicine
Health care
Health management
Public healthcare
Nurses
Dentistry
U5 Trakia University
www.uni-sz.bg
Stara Zagora Veterinary medicine
Medicine
C1 Medical College of Sofia
http://med-college.internet-bg.net
Sofia Assistant pharmacist
Dental mechanics
Masseur
Medical laboratory technician
Midwife
Nurse
Rehabilitation therapist
Sanitary inspector
Social assistant
X-ray technician
C2 Medical College of Plovdiv
http://medcollege-plovdiv.org
Plovdiv Nurse
Midwife
Medical laboratory assistant
Assistant pharmacist
X-ray laboratory assistant
Dental mechanic
Sanitary inspector
C3 Medical College of Pleven
www.digsys.bg/eunetweb/colleger
Pleven Nurses
Laboratory Assistants
Obstetrician
Remedial gymnast
C4 Medical College of Varna Varna Nurse
Midwife
Medical laboratory assistant
Assistant pharmacist
Sanitary inspector
X-ray laboratory assistant
Dental mechanic
C5 Medical College of Shumen Shumen Nurse
Midwife
Social worker
C6 Medical College of Dobrich Dobrich Nurse Rehabilitation therapist
6.2. Sector-related exhibitions in Bulgaria
Exhibition name Location (City) Dates Frequency For more info
OPTO, PHOTO & VIDEO SALON
(Optics, photography and video equipment)
Inter Expo Center (Sofia) 7 – 10 Apr 2005 Annually www.bulgarreklama.com
BULDENTAL
International Specialized Exhibition for Medical Techniques,
Intensive Care, Diagnostics, Surgery, Hospital Equipment, etc.
Bulgarreklama International
Exhibition Centre (Sofia)
11 – 14 May 2005 Annually www.bulgarreklama.com
BULMEDICA / BULDENTAL
International Healthcare Exhibition - Dentistry
Bulgarreklama International
Exhibition Centre (Sofia)
11 – 14 May 2005 Annually www.bulgarreklama.com
ORTHOPAEDY & REHA EXPO
(Orthopedics & Rehabilitation Expo)
Bulgarreklama International
Exhibition Centre (Sofia)
11 – 14 May 2005 Annually www.bulgarreklama.com
MEDICUS, DENTO, GALIENA (International Exhibition of
Medicine, Dentistry and Pharmaceuticals)
International Fair Plovdiv (Plovdiv) 19 – 22 Oct 2005 Annually www.fair.bg
WORTH knowing
23
USEFULcontacts
Organization Phone Web site
Ministry of Health +359 2 930 1107; +359 2 981 1830 www.mh.government.bg
Parliamentary Health Commission +359 2 987 1531 www.parliament.bg/komisii/z/ (Bulgarian only)
Bulgarian Drug Agency +359 2 943 4046 www.bda.bg
National Health Insurance Fund +359 2 965 9203; +359 2 965 9157 www.nhif.bg
National Center for Health Information +359 2 951 5302; +359 2 951 5303 www.nchi.government.bg
Bulgarian Red Cross +359 2 816 4755; +359 2 816 4753 www.redcross.bg
National Center of Infectious and Parasitic Diseases +359 2 944 6999 www.ncipd.org
Executive Agency for Transplantation +359 2 813 5010 www.bultransplant.bg (Bulgarian only)
National Council for Narcotics +359 2 937 75 72 www.ndc.government.bg (Bulgarian only)
National Center of Public Health Protection +359 2 954 9390 www.ncphp.government.bg
National Committee of AIDS and STIs Prevention at the Council of Ministers +359 2 930 1107; +359 2 981 1830 www.ncaids.government.bg (Bulgarian only)
National Centre of Radiobiology and Radiation Protection (NCRRP) +359 2 862 1123; +359 2 962 3947 www.ncrrp.org
National Oncology Center +359 2 971 4898 www.onco-bg.com (Bulgarian only)
National Center for Addictions +359 2 831 9015; +359 2 832 6136 www.ncn-bg.org (Bulgarian only)
“Children Medical Treatment Fund” Center +359 2 952 6943 www.cfld-bg.com (Bulgarian only)
Bulgarian Medical Association +359 2 954 1169; +359 2 954 1126 www.blsbg.com
Union of the Dentists in Bulgaria +359 2 986 3490 www.ssb-bg.org
Association of Bulgarian Pharmaceutical Manufacturers +359 2 970 0319; +359 2 971 4835 www.abphm.bg
USEFUL sites
Organization/Source Web site
Bulgarian medical web portal www.medicalbg.com
Bulgarian Medical Journal www.bgmed.com
Bulgarian Mountain Rescue Service http://pss.bglink.net
BGMEDICINE – Medical database for patients www.bgmedicine.info (Bulgarian only)
“Specialized Hospitals for Rehabilitation – National complex“ EAD www.rehabilitatzia-bg.com (Bulgarian only)
The International Federation of Red Cross and Red Crescent Societies www.ifrc.org
Bulgarian health web-portal - The International Healthcare and Health Insurance Institute www.zdrave.net
Multiprofile Hospital for Active Treatment and Emergency Medicine “N.I.Pirogov” www.pirogov.net
University Hospital “Queen Giovanna” www.hospital-queen-giovanna.org
Alexandrovska Hospital www.alexandrovska-hospital.org
Multi-profile hospital for active treatment “St. Joan Rilski” http://rilski.com
Fifth Multifunctional Hospital for Active Treatment – Sofia www.fifth-city-hospital.org
Hospital “Lozenets” www.lozenetz-hospital.org
USAID Bulgaria Health Reform Project www.health-bg.org
“Specialized Hospitals for Rehabilitation – National complex“ EAD www.rehabilitatzia-bg.com (Bulgarian only)
Bulgarian web portal in drug addiction http://narkomania.start.bg/ (Bulgarian only)
European Monitoring Centre for Drugs and Drug Addiction www.emcdda.eu.int
Initiative for Health Foundation www.initiativeforhealth.org
24
25
1. Why Bulgaria? 26
1.1. Energy 26
1.2. Environment 26
2. Latest deals 26
2.1. Energy sector 26
2.2. Significant pipeline projects in the energy sector 27
2.3. Environment 27
2.4. JI projects implemented in Bulgaria 27
3. Energy sector fact sheet 28
4. Environment fact sheet 29
5. Key legal issues 30
5.1. Licensing in the Energy sector 30
5.2. Environmental procedures 31
6. Competition and partners 32
6.1. Top companies in the Energy sector 32
6.2. Top companies in environmental activities 32
6.3. Companies in environmental engineering 32
7. Sector-related exhibitions in Bulgaria 32
8. Useful contacts 33
9. Useful sites 34
TABLE contents of
YOUR
MOVE
Bulgaria:
Energy & Environment Sector
2006 InvestBulgaria Agency
WHYBulgaria?
L ATEST deals
2.1. Energy sector
Vendor Investor Target Size (EUR m)
Government EBRD, Societe Generale Rehabilitation of TPP Maritsa East 3 518
Government Siemens (Germany), Framatome (France) and Atomenergoexport (Russia) Modernization of units 5 and 6 of Kozloduy NPP 491
Privatization CEZ (Czech Republic) “Western Bulgaria” package of Electricity Distribution Companies (EDC) 281.5
Privatization EVN AG (Austria) “South-East Bulgaria” package of EDCs 271
Government Mitsui / Toshiba (85% financed by JBIC) Rehabilitation of TPP Maritsa East 2 230
Government VA TECH Hydro (Austria) Tsankov Kamuk hydro power project 200
Government EBRD / EIB Rehabilitation of Bulgaria’s high-voltage network 153
Privatization E.ON Energie AG (Germany) “North-East Bulgaria” package of EDCs 140.7
Greenfield Horizon Energy Development Inc. (USA) 100 MW co-generation unit project 75.4
Privatization Energo-Pro (Czech Republic) “Petrohan” HPP cascade 17.2
Government Siemens (Germany) Modernization of 3 units of the Bulgarian state Varna TPP 11
Siemens National Electricity Company (NEC) Upgrade of a 400 kV power substation 9
Government Global Environment Facility (GEF) Trust Fund (World Bank) Energy Efficiency Project for Bulgaria 7.6
Greenfield Neochim Plans to build a co-generation unit to cut electricity costs in its
fertilizers plant
4.6
Government Varna Heating Utility 2 co-generation units with installed capacity of 2.2 MW each 2.1
Agropolychim Wintershall Erdgas Handelshaus Zug AG Acquisition of 51% share in the gas trader - Dexia Bulgaria undisclosed
1.1. Energy
Bulgaria is the main exporter of electricity in Southeast Europe
Bulgaria has a number of potential renewable energy sources – hydro, solar and biomass; geothermal and wind energy potential is considered the highest
Electricity consumption in Bulgaria is expected to grow with 1.7 - 2.3% on an annual basis until 2020
2001-2005 – Government policy towards liberalization of the energy market through providing free access to the energy transmission network and direct contracting between
generators, traders and eligible customers under bilateral contracts at freely negotiated prices
2006 – Bulgaria will create a regional energy information center in a further step to deregulate its power market
2007 – The monopoly of National Electricity Company (NEC) over transmission, including export of power will expire upon Bulgaria’s EU accession
1.2. Environment
In 2004, Bulgaria completed harmonization of its environmental legislation with the EU
With the ratification of the Kyoto Protocol in 2002, Bulgaria committed to reducing greenhouse gas emissions into the atmosphere by 8% compared with 1990 levels
Bulgarian companies have to triple their annual spending to EUR 460 million in order to meet EU environmental requirements till 2014 (current annual spending to meet EU
environmental standards is about EUR 150 – 180 million)
Most intensive investment required in:
Chemical and biological treatment of waste water;
Waste disposal, separation, composting and recycling, and incineration;
Reconstruction and modernization of central heating systems;
Reconstruction of existing facilities in the metallurgy sector;
Installation of filters for reduction of heavy metal and persistent organic pollutants emissions.
26
2.3. Environment
Vendor Investor Target Size (EUR m)
Government ISPA Water, solid waste and air pollution projects 91
Greenfield Government Construction of a Nuclear Waste Depot by 2015 51.3
Government EBRD / RWE NUKEM and GNB (Germany) Construction of a dry storage facility for spent nuclear fuel at the
Kozloduy NPP
48.7
Government EBRD Maritsa East II to install pollution control equipment 34
Government ISPA / MNG Group (Turkey) Construction of a waste water treatment plant in Northern
Bulgaria
16.6
Government ISPA Administrative preparation of water and waste management 15.9
Government Greek consortium between Avax and Themeliodomi Building of a wastewater treatment plant 12.6
Greenfield Mega Group Plans construction of a plant for recycling of petroleum residues 12
Greenfield TEC EM (France); EU funds Construction of a waste treatment plant 10
Greenfield Biosphere Development Corp (USA) with USD 4.3 m and Silistra city (J/V) Solid Waste Processing Plant 6.5
Government Bulgarian NEC, JAERI, IAEA Ecological installation in Maritsa East II TPP 6.1
Government TPP Rousse Noxious gases decrease project 5.1
District Heating
Russe
ZVVZ (Czech R.) – suppier; Komercni Banka - creditor Russe District Heating Company - Dust filter installation 4
Government PHARE - National program Reconstruction of “Buhovo” Tailings Pond Reconstruction - II
Phase
3.1
Government DEPA, National Trust Ecofund Low Nox Burners for Sofia – East Thermal Power Plant 2.7
Government EMEPA - MoEW Kremikovtzi JSC 1.8
Government DEPA Grant for Modernization of Urban Waste Water Treatment Plant
Varna- II Phase
1.5
KCM JSC KCM JSC Designing and Reconstruction of the Hazardous and Industrial
Waste Landfill of KCM JSC, Plovdiv
1.1
2.2. Significant pipeline projects in the energy sector
Project Value (EUR m) Period
Privatization of 12 Hydro Power Plants n.a. 2005
Privatization of DHC Plovdiv, DHC Pravetz, DHC Lovech and DHC Pernik n.a. 2005
Construction of new replacing capacity on the site of Maritsa East 1 – 2 units x 335 MW together with FGD plants 989 2005 - 2009
Construction of Belene NPP 2,045 2005 - 2011
Construction of highway gas pipeline for natural gas transit from Central Asia through Turkey to Central and Western Europe 350 - 400 2008 - 2012
2.4. JI projects implemented in Bulgaria
Country of
cooperation Project name Location Project developer
Kingdom of the
Netherlands
Reduction of greenhouse gases through gasification of the towns Veliko Turnovo, Lyaskovets and Gorna
Oryahovitsa
Overgas Inc.
Co-generation power station Biovet Peshtera Biovet JSC
Plovdiv South co-generation project Plovdiv District Heating Plovdiv
Reduction of greenhouse gas by gasification of Sofia Sofia Overgas Inc.
Austria
Tzankov Kamak hydro power plant Vacha River NEC EAD
Industrial energy efficiency and co-generation Nikopol Mayr-Melnhof Nikopol AD
PFS biomass and energy efficiency project Stambolijski Paper Factory Stambolijski AD
Denmark Agropolychim N2O reduction Devnya DEPA
Prototype Carbon
Fund
Biomass Utilization in Svilosa Svishtov Svilosa AD
Rehabilitation of district heating system in District Heating Sofia EAD Sofia District Heating Sofia EAD
Rehabilitation of district heating system in District Heating Pernik EAD Pernik District Heating Pernik EAD
27
Energy market
Source: Ministry of Economy and Energy, State Energy Regulatory Commission
Investment in the Energy sector
Opportunities for financing energy investment projects:
Bank loans
EU funds
Joint implementation mechanism
Privatization
State guaranteed credits for significant projects of social importance
Financial leasing EUR 1.351 bn invested in the energy sector in 2001-2004
Source: Ministry of Economy and Energy
Investment opportunities in energy sector exist in:
Modernization of existing TPPs
Greenfield wind power park projects
Construction of new HPPs, privatization of existing ones
New gas retail distribution projects
Privatization of the electricity generation companies
For more information, please, visit:
Ministry of Economy and Energy - www.mee.government.bg & www.doe.bg
State Energy Regulatory Commission - www.dker.bg
Privatization Agency - www.priv.government.bg
Case studies
Va Tech – Tsankov Kamuk HPP and dam Mitsubishi and Societe Endustriele d’Atlantique – wind
energy project in Kaliakra
Project implemented under Kyoto Protocol and the respective MoU between Austria and Bulgaria
Construction of new HPP and dam – 80 MWt/185 MWth per year
Partners: NEC and Va Tech (Austria) as major EPC contractor
Financial agreement for EUR 220 m signed in Nov. 2003
Project financing: through Bank Austria Creditanstalt and Credit Suisse First Boston
Austrian Verbundplan GmbH and Alpine Mayreder BAU GmbH have been awarded the contract for
construction works and engineering services
Jobs to be created: 700
Project to be completed in 2010
Construction of a wind park near Kaliakra at the Black
Sea coast
Land provided by the municipality through a tender
procedure
Project to be implemented by Mitsubishi and Societe
Endustriele d’Atlantique
Evaluation of the environmental impact and power
equipment application is under way
Overgas Inc. ENEL – Maritsa East 3
Established in 1992 as a joint venture with Gasprom (Russia), Overgas Inc. is the biggest Bulgarian natural
gas distributor
Currently, the company operates about 1,000 km of gas distribution networks, 369 km of which were built in
2004
The company holds 26 exclusive licenses for natural gas distribution and 60% of the potential national gas
market
The company has planned to invest EUR 96 m for the period 2004 – 2005
For the first quarter of 2005, Overgas has increased its household customers to more than 10,000, which is
5 times more as compared to Q1, 2004. The number of business customers has tripled for the same period
The households potential of local gas distribution companies of Overgas Inc. is expected to reach 4 million
in 2010.
Rehabilitation of 4x210 MW units and construction of flue
gas desulphurization plants for the four units to raise the
output capacity of Maritsa East 3 from 840 MW to 904
MW and extend its operational life by 15 years
The project is carried out by JV Power Company Maritsa
East 3 controlled by ENEL (44 %), NEC (27%) and
Entergy (29 %)
Project value: EUR 600 m - financed by 14 banks
Investment: USD 36 m in 2003; EUR 112 million capital
investments planned in 2005
Project to be implemented by 2006
ENERGY SECTOR fact sheet
Investment in Bulgarian energy sector,
2001-2004, EUR m
281 257
322
491
0
200
400
600
2001 2002 2003 2004
Structure of the Energy sector
Heat supply
7%
Electricity
supply
80%
Gas supply
(Bulgargaz)
7%
Coal mining
6%
Installed capacity (MW), 2004
Nuclear (3760 MW)
33%
Thermal (5059 MW)
44%
Hydro (2651 MW)
23%
Power output, 2003
CHPP
4%
NPP
41%
TPP - coal
45%
TPP - liquid fuels
2%
HPP
8%
Total output – 42,546 TWh
Installed capacity in SEE, 2003, %
13%
21% 15%
31%
11%
5%
2% 2%
Albania Macedonia
BiH Serbia & Montenegro
Greece Bulgaria
Romania Turkey
Export of electricity in SEE, 2003, %
46%
28%
22%
4%
Bulgaria Romania
Serbia Other
28
ENVIRONMENT fact sheet
Forthcoming projects
Project name Main beneficiary Main donor
Total amount
(EUR)
Start/
Completion
ТPP “Sliven” (Installation of Two Natural Gas Combined Cycle Units
with Electricity Generating Capacity 10-15 MW)
District Heating Power Plant
- Sliven and МЕЕR
Own financing and foreign
financial institutions
10,000,000 2004 - 2008
Design and Construction of Central WWTP from KCM JSC, Plovdiv
(Non-ferrous metals smelter)
KCM JSC, Plovdiv Black Sea Trade and
Development Bank (Greece)
4,500,000 2003 - 2005
Regional Danube River Project
(Bulgaria, Georgia, Romania, Russia, Turkey, Ukraine)
Ministry of Environment and Water GEF 4,707,692 2004 - 2007
Rhodope Project Ministry of Environment and Water GEF 2,988,960 2004 - 2009
ТPP “Shoumen” (Installation of Low –emission Burners in Four
Steam Generators and Termination of the Use of Residual Oil)
District Heating Power Plant
- Shoumen and МЕЕR
Own financing and foreign
financial institutions
1,000,000 2004 - 2008
Heating Central “Lyulin” (Installation of Low –Emission Burners in
Water Boilers 2 and 5)
District Heating Power Plant - Sofia Own financing and foreign
financial institutions
900,000 2004 - 2005
Heating Central “ Veliko Tarnovo” (Construction of Distribution Gas
Pipes and Replacement of the Burners in WB 1 and 2)
District Heating Power Plant
- Veliko Tarnovo and МЕЕR
Own financing and foreign
financial institutions
825,000 2004 - 2007
Heating Central “Mladost” - Vratza
(Rehabilitation of the Burners in WB1 and 2)
District Heating Power Plant
- Vratza
Own financing and foreign
financial institutions
600,000 2004 - 2008
Heating Central “Zemlyane”
(Installation of Low-NOx Burners in WB 3)
District Heating Power Plant
- Sofia
Own financing and foreign
financial institutions
450,000 2004 - 2005
Heating Central “Vl. Varnenchik”
(Rehabilitation of Burners)
District Heating Power Plant -
Vl. Varnenchik
Own financing and foreign
financial institutions
450,000 2004 - 2007
TPP “Rousse Iztok”
(Refitting of the Ignition Burners for Operation on Natural Gas)
District Heating Power Plant -
Sofia
Own financing and foreign
financial institutions
350,000 2005 - 2007
ТPP “Sliven”
(Installation of Low –Emission Burners in Water Boiler 1)
District Heating Power Plant -
Sliven and МЕЕR
Own financing and foreign
financial institutions
350,000 2004 - 2006
Environmental equipment JI case study
District Heating Sofia AD
Emission reduction purchase agreement with the Prototype Carbon Fund (PCF);
PCF will be buying the reduction in the greenhouse gas emission for the period 2004 - 2012;
Transaction is based on greenhouse gas swap generated by a project started in 2003 by District
Heating Sofia AD for Sofia district heating rehabilitation;
The project comprises the modernization of about 7,500 district heating substations in residential buildings
in Sofia and the replacement of over 70 km of pipelines of the city heating transmission network;
The project is financed through loans from the World Bank, EBRD, PHARE and Kozloduy
International Decommissioning Fund grants and own financing;
The implementation of the joint investment project for Sofia district heating rehabilitation will lead to
the reduction of greenhouse gases emission into the atmosphere with over 1.08 million tons for the
period 2004 – 2012;
Total cost of the project is EUR 114 million
Environmental strategy of Bulgaria
Total ~EUR 1.2 bn per annum
Projects and goals
Organic agriculture as % of total 30%
Large municipal wastewater plants 74
Small municipal wastewater plants 283
Hospital waste recycling 10
Auto and electrical device recycling 2
Waste-to-biomass depots 3
Regional hard waste depots 54
2005-2014 Annual
Total budget under
Environment Strategy (EUR bn)
12 1.2
Share of industry (EUR bn) 1.8 0.2
Share of EU funds (EUR bn) 2.1 0.2
Environmental equipment market in
Bulgaria
Imported
equipment
75%
Local
equipment
25%
Sources of funding (2005-2014)
Direct
taxes
30%
EU funds
18%
Municipalities
6%
Other
16%
State
budget
15%
Industry
15%
Uses of funding (2005-2014)
Water
supply
Minicipal
waste
Industry
compliance
Biodiversity
Waste
control
Global
ecology
29
KEY LEGAL issues
5.1. Licensing in the Energy sector
Description of the procedure 1. License for production of electric power above 5 MW
2. License for production of thermal power above 5 MW
3. License for electric power transmission
4. License for thermal power transmission
5. License for natural gas transmission
6. License for natural gas distribution
7. License for electric power distribution
8. License for natural gas preservation
9. License for trans-border natural gas and oil transmission
10. License for production of electric/thermal power above 5MW of biomass/gas
Authority State Energy Regulatory Commission (SERC)
Required documents for each of the above procedures 1. Application form
2. Copy of court decision for the registration of the company-applicant
3. Certificate for actual state
4. Copy of BULSTAT indentification card
5. Certificate from the relevant court that the applicant is not under insolvency procedure
6. Declaration that the license for performance of the same activity has not been withdrawn or that the term of the
withdrawal of the license has expired
7. If such a refusal for issuance of license for the same activity exists: declaration that after the refusal 6 months
have passed
8. Declaration that the legal requirements for safe work place are observed
9. Declaration of fulfillment of technical requirements
10. Document proving ownership right
11. Data on technical conditions of the electric power generators and its technical and exploitation characteristics
and information on the infrastructure
12. Environmental impact assessment
13. Future plans for development
14. Applicant’s background for performing similar activities
15. Documents providing the managerial and organizational structure of the applicant and proof of relevant education
and experience of the managerial body
16. Information on the authorized representative, who will represent the applicant in front of the State
Energy Regulatory Commission
17. Permit for water use if such is necessary
18. Document proving payment of state tax
19. Official financial statements for the past three years unless the applicant is a newly registered firm.
Fees See Tariff for Fees collected by the State Energy Regulatory Commission. Different fees are collected for the issuance
of the different types of licenses.
Timeframe 3 months from the time of application (1 month for Procedure №10)
Legal framework 1. Energy Act
2. Ordinance on Licensing of Activities in the Energy Sector (Prom. Official Gazette # 53/2004)
30
5.2. Environmental issues
Environmental Impact Assessment (EIA) of Investment Proposals
Authority Ministry of Environmental Protection or the respective Regional Inspectorate on Environmental Protection
Main steps of the procedure Timeframe
1. Notification to the competent authorities and the public concerned of the proposal - The investor is obliged to notify in writing about his
investment intention the competent authority and the mayor of the relevant municipality/ies and region/s, local administration and the population
through the mass media and/or in another way.
-
2. Assessment of the need for EIA (Screening of EIA ) - The competent authority assesses the need for EIA (screening) by determining the degree
of significance of the environmental impact on the grounds of the criteria set forth in EPA (Article 93, paragraph (4) of the EPA.
1 month as of submission of
the request (5 days)
3. Identification of scope, contents and form of the EIA statement (Scoping of EIA) - The investor undertakes consultations with the competent
authorities and the public concerned and based on the information received commissions the elaboration of Terms of Reference (TOR) for the scope
of the EIA and submits the TOR to the competent authority for approval. The investor assigns the elaboration of EIA statement in compliance with the
approved TOR to a team of certified experts registered in the public register at the MEP.
-
4. Reviewing EIA Statement - The competent authority evaluates the content of the EIA statement conforming to the consultations with the specialized
institutions and the public concerned and the satisfaction of the requirements of the legislative framework.
14 days as of deposition
(5 days)
5. Public discussion on EIA statement - The investor must ensure public access to the EIA documentation. 30 days (5 days)
The investor submits to the competent authority the minutes of the discussion and the deposited statements of opinion in writing. Within 7 days after
discussion (1/3 shorter)
The investor submits to the competent authority a statement of opinion on the proposals, recommendations and objections resulting from
the public discussion.
Within 14 days after
discussion (14 days)
6. Taking decision on EIA - The competent authority takes decision on the EIA, taking into account the EIA statement and the results of the public
discussion, inclusive of the statement of opinion of the investor.
Within 3 months after
discussion (1/3 shorter)
The competent authority should provide the decision to the investor and announce it through the national media or in another appropriate
manner.
Within 7 days after the
decision (5 days)
Fees BGN 700 – 1,500 (EUR 360 – 770)
Legal framework 1. Environmental Protection Act
2. Regulation on the terms and conditions for carrying out Environmental Impact Assessment
Integrated Pollution Prevention and Control (IPPC) permit (Complex permit)
Authority Minister of Environment and Water, Executive Environment Agency (EEA), Regional Inspectorate of Environment and Water (RIEW)
Main steps of the procedure Timeframe
1. The procedure starts when an application has been filed. The application should be presented in hard copy as well as electronic.
The application contains:
Draft of program for achieving of compliance with the content and the form;
Plan for monitoring in compliance with the legal provisions;
Decision on environmental impact assessment (EIA).
30-45 days
2. The competent authority places the application at public disposal. 30 days
3. The competent authority prepares a technical assessment, including:
Assessment of the opportunities for reduction of the consumption of energy and raw materials;
Assessment of the measures for optimization of the production process;
Assessment of the measures for preventing the formation of waste.
Not defined
4. Issuance of a complex permit. The draft for the complex permit has to be coordinated with MOEW and the respective RIEW. 37 days
5. The competent authority places the project at public disposal. 30 days
6. Issuance of complex permit document:
New installations and facilities 5 months
Existing installations and facilities 8 months
The decision to issue a permit must be announced through the mass media. 14 days
Fees Different fees apply for different industrial activities and vary: BGN 1,000 - 20,000 (EUR 500 – 10,000)
Legal framework Environmental Protection Act; Ordinance for the conditions and the order for issuing complex permits for construction and exploitation of operational
industrial installations and facilities
Note: According to the Investment Encouragement Law certified investors are provided with faster administrative servicing - time in bold
31
COMPETITION AND partners
6.1. Top companies in the Energy sector
Company Activity Net sales
(EUR ‘000)
Number of
employees Year
National Electricity Company (Sofia) Electricity transmission network operator 1,019,763 7,036 2004
CEZ* Electricity distribution 363,284 4,936 2004
Nuclear Power Plant Kozloduy (Kozloduy) Electricity generation 329,767 4,700 2004
EVN* Electricity distribution 250,250 4,120 2002
E.ON* Electricity distribution 201,937 3,798 2002
Heat Supply - Sofia (Sofia) Heat supply 142,045 2,581 2004
TPP Maritsa East 2 (Kovachevo-SZ) Electricity generation 137,094 2,074 2001
Overgas Inc. (Sofia) Gas distribution 119,700 154 2004
Topenergy (Sofia) Gas distribution 74,825 34 2003
TPP Varna (Varna) Electricity generation 72,058 1,200 2001
TPP Bobov dol (Dupnitza) Electricity generation 68,400 1,084 2001
Briquelle (TPP Maritsa East 1) (Galabovo) Briquette production 56,932 1,550 2004
Deven (TPP - Devnia) (Devnia) Electricity generation 39,512 553 2003
Heat Supply - Russe (Russe) Heat supply 23,765 801 2004
Heat Supply - Pernik (Pernik) Heat supply 19,590 712 2004
TPP Maritsa East 3 (Dimitrovgrad) Electricity generation 11,155 289 2004
Energo-PRO Bulgaria (Sofia) Electricity generation 10,598 128 2004
Brunata Bulgaria (Sofia) Heating and water costs billing solutions 8,165 86 2004
Heat Supply-Burgas (Burgas) Heat supply 6,827 150 2004
Ceef Mecamidi - Litex (Sofia) Electricity generation 4,693 31 2004
* Ownership as of 2004
6.2. Top companies in environmental activities
Company Activity Net sales
(EUR ‘000)
Number of
employees Year
Chistota-Sofia (Sofia) Waste disposal and street cleaning 12,908 750 2004
Wolf-96 (Sofia) Waste disposal and street cleaning 6,306 550 2004
DITTs (Sofia) Waste disposal and street cleaning 5,755 366 2004
Volf (Sofia) Waste disposal and street cleaning 4,907 124 2004
Scheele Bulgaria (Sofia) Waste disposal and street cleaning 3,923 488 2004
6.3. Companies in environmental engineering
Company Activity Net sales
(EUR ‘000)
Number of
employees Year
Ataro Clima (Plovdiv) Manufacturing and design of refrigeration, ventilation and
air-conditioning environmental technologies
4,726 108 2003
Ruvex (Sofia) Design, assembly and technical support of ecological heating systems 3,934 70 2004
Tangra (Sofia) Manufacturing and design of air-conditioning and heating
environmental technologies
3,379 162 2004
Klimatech (Dimitrovgrad) Manufacturing and design of air-conditioning and heating
environmental technologies
1,573 76 2003
Vodokanalengineering (Sofia) Engineering design and investigation 841 69 2003
BalBok Engineering Co. (Sofia) Environmental engineering 834 17 2004
Ecotech Products Eco-tech products; environmental engineering 817 15 2002
Bioeco (Varna) Environmental engineering 543 34 2004
Povvik-OOS Ltd. (Sofia) Environmental consulting and engineering 225 17 2004
Water Engineering Ltd (Sofia) Environmental consulting and engineering N.A. 50 2003
32
SECTOR-REL ATED
EXHIBITIONS in Bulgaria
Exhibition Name Location (City) Dates Frequency For more info
Aquatech
International Exhibition of Water Management & Technologies
Plovdiv International Fair
(Plovdiv)
26 Sep - 1 Oct 2005 Annually www.fair.bg
Bultherm/Bulcontrola
Heating, air-conditioning and ventilation, measuring equipment,
environmental monitoring and protection
Inter Expo Center
(Sofia)
31 May - 3 Jun 2005 Annually www.bulgarreklama.com
Eneco
International Exhibition of Power Engineering and Ecology
Plovdiv International Fair
(Plovdiv)
26 Sep - 1 Oct 2005 Annually www.fair.bg
Expo Energy
New energy resources, energy efficiency, installations, systems, equipment
Inter Expo Center
(Sofia)
31 May - 3 Jun 2005 Annually www.bulgarreklama.com
USEFULcontacts
Organization Phone Web site
Energy
Bulgargaz EAD +359 2 939 6422 www.bulgargaz.com
Bulgarian Branch Chamber of Energy +359 2 962 1328 www.bbce.org
District Heating Company - Plovdiv +359 32 957 018 www.dhpn-bg.com (Bulgarian only)
District Heating Company - Rousse +359 82 883 311 www.toplo-ruse.com
District Heating Company - Sofia +359 2 931 4949 www.toplo.bg (Bulgarian only)
District Heating Company - Varna +359 52 500 670 www.toplovarna.com
Electricity Distribution Company – Gorna Oriahovitza +359 618 601 51; +359 618 461 52 www.edistribgo.com (Bulgarian only)
Electricity Distribution Company – Pleven +359 64 893 311 www.erp-pleven.bg
Electricity Distribution Company - Plovdiv +359 32 600 262 www.erp-plovdiv.bg (Bulgarian only)
Electricity Distribution Company – Sofia +359 2 920 17 43; +359 2 822 34 22 www.electro-sof.com (Bulgarian only)
Electricity Distribution Company - Sofia District +359 2 933 9703; +359 2 933 9704 www.electro-sofobl.com
Electricity Distribution Company – Stara Zagora +359 42 622 719 www.energosz.bg (Bulgarian only)
Energy Efficiency Agency +359 2 981 5802 www.seea.government.bg
Energy Efficiency Centre in Industry +359 2 986 76 54; +359 2 933 26 08 www.eeci.doe.bg
Institute for Nuclear Research and Nuclear Energy +359 2 974 3761 www.inrne.bas.bg
Kozloduy Nuclear Power Plant +359 973 721 00; +359 973 728 30 www.kznpp.org
Ministry of Economy and Energy +359 2 940 71 www.mee.government.bg ; www.doe.bg
National Electricity Company (NEK EAD) +359 2 9263 636; +359 2 986 5606 www.nek.bg
Nuclear Regulatory Agency +359 2 940 6800; +359 2 940 6948 www.bnsa.bas.bg
Overgas Inc. +359 2 960 3220 www.overgas.bg
State Energy Regulatory Commission +359 2 988 2498 www.dker.bg
Environment
Executive Environment Agency +359 2 955 9011 http://nfp-bg.eionet.eu.int/ncesd/eng/index.html
Forest Research Institute +359 2 622 052 http://forestin.bulnet.com
Global Environment Facility +359 2 960 950 www.moew.government.bg/gef
Ministry of Environment and Water +359 2 940 6224 www.moew.government.bg
National Forestry Board +359 2 985 11510 www.nug.bg
National Institute of Meteorology and Hydrology +359 2 975 3986 www.meteo.bg
National Trust EcoFund (NTEF) +359 2 973 3637; +359 2 973 3816 http://ecofund-bg.org
Regional Environmental Center for CEE (Bulgaria office) +359 2 983 4817 www.rec.org
Regional Inspectorate of Environment and Water – Rousse +359 82 820 774 www.riosv.ruse.bg (Bulgarian only)
Regional Inspectorate of Environment and Water - Stara Zagora +359 42 692 200 http://riosvsz.dir.bg (Bulgarian only)
Regional Inspectorate of Environment and Water - Veliko Turnovo +359 62 620 358 www.rios-vt.org
33
USEFULsites
Organization / Source Web site
Energy
Black Sea Regional Energy Centre (BSREC) www.bsrec.bg
Bulgarian Ship Hydrodynamics Centre (BSHC) www.bshc.bg
Commission on Protection of Competition www.cpc.bg
Energy Regulators Regional Association www.erranet.org
Environment
“Information Green Window” - environmental information system (Svishtov) http://svishtov.com/izp
BlueLink - Civil Environmental Gateway to Bulgaria www.bluelink.net
Bulgarian - Swiss Forestry Programme/ Sylvica foundation www.sylvica.org
Bulgarian Association of Municipal Environmental Experts www.bamee.org
Centre for Environmental Information and Education www.ceie.org
Coordination Center for Effects www.rivm.nl/cce
Danube River Protection Convention www.icpdr.org
ECOLEX - A gateway to Environmental Law www.ecolex.org
Environment and Natural Resource Network (GRID – Arendal) http://enrin.grida.no
Environmental Content Sharing in South Eastern Europe www.see-environment.info
Environmental News Service http://ens.lycos.com
European Environment Agency www.eea.eu.int
European Environment Information and Observation Network http://nfp-bg.eionet.eu.int/ncesd/eionet-bg.html
Institute for Environment and Sustainability http://ies.jrc.cec.eu.int
Institute of Astronomy; National Astronomical Observatory “Rozhen” www.astro.bas.bg
Pollution Online www.pollutiononline.com
United Nations Environment Programme www.unep.org
United States Environmental Protection Agency www.epa.gov
World Resource Institute www.wri.org
WWF - The Global Conservation Organization www.panda.org
Energy map of Bulgaria
34
35
1. Why Bulgaria? 36
2. Latest deals 36
3. Banking & financial services fact sheet 37
3.1. Banking 37
3.2. Attractive banking & financial services subsectors 38
3.3. SME & mortgage lending case studies 39
3.4. Consumer finance case studies 39
4. Legal 39
4.1. Banks 39
4.2. Mutual funds 40
4.3. Leasing & non-bank consumer finance 40
5. Competition – top companies 41
5.1. Banks: As at june 2005 41
5.2. Non-bank consumer finance companies 41
5.2. Leasing companies 41
6. Worth knowing 42
6.1. Useful contacts 42
6.2. Useful sites 42
TABLE contents of
YOUR
MOVE
Bulgaria:
Banking & Financial Services Sector
2006 InvestBulgaria Agency
WHYBulgaria?
1. The overall banking market is forecasted to grow in excess of 15% CAGR through 2013 and has strong fundamentals
due to country’s robust economic growth backed by sound fiscal stability, steady personal income growth rise and low
banking penetration at some 40% of EU averages
2. Strong performers in Bulgarian banking achieve in excess of 25% ROE, 30% growth in deposits, 40% growth in lending
and NIM’s of 5%. The EUR 8 bn lending market is forecast to reach EUR 21 bn by 2013
3. Investors who can leverage superior banking know-how, a global network and capital markets access are likely to
realise significant returns)
4. Investment banking largely underdeveloped
5. Strong growth expected in retail/SME lending and asset management
L ATEST deals
Year Target Acquirer Transaction
type
Stake Price
(EUR m)
Rationale
2005 EIBank Novator Acquisition 34% n.a. Private equity investment
2005 Hebros HVB Acquisition 100% n.a. Strategic expansion
2005 Eurobank Piraeus Acquisition 99.7% n.a. Strategic expansion
2004 JetFinance AIG Acquisition 34% ~2 Consumer finance entry
2003 DSK Bank OTP Privatization 100% 311 Last bank to be privatized
2003 Eurobank Petrol JSC Acquisition 85.4% n.a. Resale
2002 Biochim BA-CA (HVB Group) Privatization 83% 83 Strategic expansion
2001 Procreditbank Investor group-IFC, EBRD, DEG, Commerzbank Greenfield 100% 12.7 Niche development
2000 UBB National Bank of Greece Privatization 90% 229 Strategic expansion
2000 Bulbank Unicredito Privatization 98% 361 Strategic expansion
1999 Express Bank Societe Generale Greenfield 98% 39 Strategic expansion
1999 Hebros Regent Pacific Privatization 100% 24 Speculative
1998 Post Bank AIG/EFG Eurobank Privatization 98.7% 38 Strategic expansion
1997 First Investment Bank EBRD Acquisition 20% 5.1 Private equity investment
36
BANKING &
FINANCIAL SERVICES Fact Sheet
Strong acceleration in financial intermediation was witnessed in 2003 through 2005 and will be carried over in the coming years, however at a
diminishing pace. Banks continue to play a leading role in financial intermediation.
3.1. Banking
Healthy & growing banking system
Bulgarian banks have strong growth potential and have attracted high volume of foreign capital at premium entry prices
Robust organic growth across all banking segments
Average ROE stood at 18.8% in September 2004, well ahead of average EU levels
High loan portfolio quality – performing loans stood at 95% as of July 2005
M&A activity is set to continue as both incumbents and new entrants seek to leverage Bulgaria’s regional economic leadership
Recent developments
Bank assets increased 44% yoy in 2004. Growth as at September 2005 was 38%
compared to September 2004
Over the past 3 years banks restructured assets relocating resources from bank
deposits to higher-margin loan portfolios
Loans portfolio grew by 47% in 2004. Mortgage loans to individuals (up 147%)
and consumer loans (up 60%) experienced the strongest growth. Growth as at
September 2005 was 37% compared to September 2004.
The BNB measures aimed to curb loan expansion introduced throughout 2005
have a moderate decelerating effect
Banking system assets and net income
0
2000
4000
6000
8000
10000
12000
14000
1999 2000 2001 2002 2003 2004
0
50
100
150
200
250
Assets Net income
Assets, EUR mln
Net income, EUR mln
Foreign banks value highly Bulgaria
50%
60%
70%
80%
90%
2000
0
0.5
1
1.5
2
2.5
3
Foreign ownership P/NAV
2001 2002 2003
Foreign ownership, %
P/NAV
Top banks market shares by
assets 2004, %
Unicredit
12%
NBG
9%
HVB
FIB 8%
8%
OTP
14%
Postbank
5%
Raiffeisen
7%
SocGen
4%
Other
33%
Spread between lending
and deposit rates, %
8.6
7.5
6
5.3
4.7
0
2
4
6
8
2003 2004 2005 2006 2007
Corporate loans and NIMs
0
1000
2000
3000
4000
5000
6000
2000 2001 2002 2003 2004
4.0%
4.5%
5.0%
5.5%
6.0%
Corporate loans, EURmln NIM
Corporate loans EUR mln
NIM %
Retail loans
0
500
1000
1500
2000
2500
2000 2001 2002 2003 2004
16%
20%
24%
28%
32%
Retail loans Retail loans as % of total lending
Retail loans, EUR m
RL / TL
Source: Bulgarian National Bank
37
3.2. Attractive Banking & Financial services subsectors
Mortgage lending Consumer finance
Mortgage lending has grown from virtually nothing in 1999 to around EUR 880
million as of September 2005
Main lenders are universal banks but also specialist Bulgarian American Credit
Bank. Non-bank players started entering the market only in 2004
Historically the market was very concentrated with DSK having 55% market
share. As of June 2005, DSKBank(OTP) has 34% market share; UBB (NBG)
ranks second with 20%, Bulbank (Unicredito) comes third with 11%
Mortgage lending is growing rapidly but still below 5% of GDP compared with over
40% in most EU countries
Relatively active market in mortgage bonds - over EUR 50 million issued mainly to
domestic investors for terms of 3-5 years
SPV(Special Purpose Vehicles) law was passed in mid-2003
Growth factors:
Legal developments – new mortgage and secondary market laws have been
developed
Primary lending – rapidly increasing activity in primary mortgage origination with
growing competition extending maturities and making products more affordable
Secondary markets – heightened interest in secondary mechanisms following
demonstration of the use of mortgage bonds in Bulgaria
Bank consumer finance
Consumer loans represent about 65 % of bank retail loans. As of September
2005, they amounted to BGN 3.8 bn.
DSKBank (OTP) dominates the segment with over 46% market share
Non-bank consumer finance players distinguish themselves by:
Actively selling services via various distribution channels, whereas banks “wait”
for the client to approach and look for their product;
Creditworthiness assesment - unlike banks, non-bank consumer finance
companies usually do not require collateral but focus on clients “readiness”
estimated on personal income basis
Asset management Leasing
Mutual Funds
The infant asset management segment started growing rapidly over the past 2 years. A
number of equity and balanced type funds were established. REITs have become very
popular with several real estate funds already a fact in Bulgaria. At present mutual funds
assets are estimated at about Eur 75 mln.
Pension Funds
Pension fund inflows have risen substantially over the past 4 years. The assets of all
3 fund types – universal, professional, and voluntary, have been growing by 10% per
quarter since 2001. The installment requirement change for universal funds from 2% to
5% by 2006 will further speed up asset expansion. Asset growth and the reduction of the
minimum bond investment threshold from 50% to 30% will provide for better investment
opportunities. Currently, foreign investments constitute less than half a percent of total
assets and about 70% of funds assets are invested in treasuries. Liberalization will also
allow pension funds to form portfolios with different levels of risk based on the retirement
horizon.
The financial leasing market is relatively small but growing. As of end-2004, the leasing
companies’ assets stood at EUR 200 million, amounting to less than 2 percent of total
banking system assets.
At present there are about 13 universal leasing companies and a few more car&truck
leasing companies.
10 companies represent about 2/3 of the leasing market in Bulgaria. Among them with
Mutual funds assets EUR mln biggest market shares are Interlease, BM leasing, Unilease, TBI Leasing.
0 2 4 6 8
10
12
14
16
18
2000 2001 2002 2003 2004
Pension funds assets EUR mln
0
50
100
150
200
250
300
350
400
450
2000 2001 2002 2003 2004
Leasing portfolio EUR mln
0
25
50
75
100
125
150
175
200
2001 2002 2003 2004
Portfolio by asset type 2004
35%
31%
22%
4%
3%
5%
industrial
equipment
heavy vehicles
automobiles
real estate
electronic
equipment
other
Source: Industry Watch
Source: Industry Watch
Source: Bulgarian Association of Leasing Companies
Source: Bulgarian Association of Leasing Companies
38
3.3. SME & Mortgage Lending Case studies
Bulgarian american credit bank Procredit bank
BACB is a wholly owned independent entity of the Bulgarian American Enterprise Fund
(BAEF). BAEF is a private non-for-profit US corporation registered in 1992 in Chicago, Illinois.
The Bulgarian American Credit Bank focuses on providing long-term financing to
small and medium private companies in different economic sectors as well as on
mortgage lending to individuals and households.
The bank pioneered the mortgage bonds in Bulgaria, issuing the first mortgage
bond in Bulgaria in 2001.
BACB has been nominated several times “Most efficient bank in Bulgaria” in the
last few years The bank was the most profitable Bulgarian bank in terms of both
ROA and ROE in the last two years with ROE in 2004 exceeding 25%
ProCredit Bank was founded in 2001, by the IFC, EBRD, DEG, Commerzbank and
IMI – The bank aims to provide access to financing for micro, small and medium-sized
enterprises. The bank has grown rapidly:
As at 2004 the bank had over 30 branches and offices and 117 employees
Procreditbank was twice awarded “Most Dynamic Bank “ prize of the
Bulgarian business daily Pari in 2003 and 2004, and in 2005 headed the Top
50 fastest growing central European banks of the British financial magazine
‘The Banker”
The bank was also among the most profitable Bulgarian banks in 2004 with ROE
of 20%
3.4. Consumer finance Case studies
JetFinance international BRS
JetFinance International is the first non-bank consumer finance company in
Bulgaria. The Company was founded in November 2001. It is headquartered in
Sofia and has operations in 100 towns in Bulgaria and over 200 000 customers.
The company partners over 1000 merchants and 2000 stores. In 2004 alone Jet
has disbursed 300 000 loans.
As of June 2004 г. AIG Capital Partners became a minority shareholder in
JetFinance.
JetFinance International offers two products, both registered trademarks:
JetCredit™ - a “point-of sale financing” product, designed to support the sales of
various retailers. It is an unsecured loan instrument ranging between BGN 150
and 3 000, extended for 3, 6, 9, 12 or 18 months.
JetCash™ - This is a loan facility designed to provide home-collected unsecured
loans to cover temporary cash flow problems. The loan ranges between BGN 100
и 800 and is extended for 12, 18, 24, 30 or 36 weeks The customers pay weekly
instalment collected from their home by a JetCash™ agent.
BRS is a leader in the non-bank credit cards business in Bulgaria with over
180,000 Euroline cards issued (45% market share), accepted by 3,800 stores
and serviced by 3,500 POS all over the country. Among BRS partners are major
Bulgarian household appliance and audio-video hypermarkets, 60 computer
retailers, 30 travel agencies, fitness gyms, beauty parlours and perfumery shops.
Bulgarian Retail Services (BRS) started activities on the Bulgarian market in the
beginning of 2003. The company is a subsidiary of Eurobank Cards S.A., which
is a part of “EFG Eurobank Ergasias”. The major shareholder in “EFG Eurobank
Ergasias” (41%) is EFG Group. The rest of the shares are listed and held by
institutional investors. As of March 2005 “Bulgarian Post Bank” acquired the credit
cards business of “Bulgarian Retail Services”
Euroline, issued by BRS, is a non-banking credit card, providing access to a credit limit
of 5000 leva, individually determined for each cardholder. Customers are offered up to
50 days grace period for paying their first installment or repaying the total amount of
the credit, without charging them interest. Each cardholder also individually determines
the number and size of installments on each purchase made with a Euroline card.
Legal
4.1. Banks
Competent authority Bulgarian National Bank
Procedures Licensing to start banking activity
2 types of licenses issued:
– license for domestic bank;
– license to foreign bank for making bank transactions within this country through a branch
Requirements:
– Should be a joint-stock company
– Minimum capital – BGN 10 mln
Procedures:
– Application filed with the Governor of the central bank through the Deputy Governor heading the Banking Supervision Department
+ required documents
– Within six months after receipt of the application and all required documents, the Central Bank comes up with a decision
– Persons who have obtained a bank license may commence conducting bank activity after they have submitted to the Deputy
Governor heading the Banking Supervision Department a number of documents and information
39
Requirements and conditions The applicant for a domestic license should be a joint-stock company in the process of incorporation, which meets the requirements for
conducting bank activity
as provided for in the Law on Banks and this Regulation, and has a paid-in
shareholders’ capital in the amount of the minimum capital required under the Law
on Banks (BGN 10 mln)
Application: An application for a bank license shall be filed with the Governor of the central bank through the Deputy Governor
heading the Banking Supervision Department. The following documents shall be enclosed to the application:
1 a certified transcript of the bank’s Minutes of the Constituent Meeting containing decisions made thereof;
2. Articles of Association providing for the transactions that the bank will make, authorizations to sign and represent the bank, and
information concerning the internal control system;
3. a list of shareholders;
4. certified transcripts of the Minutes of Meetings of the elected bodies of the bank;
5. a business plan describing the objectives, policies, and strategies of the newly incorporated bank, as well as:
a) a three-year financial projection on the bank’s development;
b) description of the client and product structure, and the financial market sector, the bank intends to penetrate;
c) sources of financing, asset structure, investment strategy;
d) description of the policy in terms of capital, liquidity management, risk concentration, lending operations, etc.
e) the envisaged management and organization structure, including the operation of individual structural units, distribution
of responsibilities among executive directors and other administrators, the bank’s information system organization and
management, including information security arrangements;
f) description of the internal control system, which shall include methods and means of effective risk monitoring and
control, and a program of measures against money laundering;
6. documents certifying the amount of subscribed capital, and that each subscribing shareholder has paid in the bank account of
the incorporated company at least 25 percent of the total nominal value of subscribed shares.
In addition, physical person having subscribed for three percent or over three percent of the voting shares, legal entities having
subscribed for ten percent or over ten percent of thevoting shares, as well as management and supervisory board members, shall
submit a number of documents
A license for a domestic bank shall be granted if, within six months after receipt of the notification under para. 1, the applicant proves
that the following conditions have been met:
1. the persons having subscribed for shares have paid in contributions totaling no less than the minimum required capital as
provided for in the Law on Banks; payments for subscribed shares have been deposited on a suspense account opened with a
domestic bank as agreed upon with the central bank;
2. the appointed administrators have submitted curricula vitae and documents certifying the qualifications and professional
experience required in the field of activities they will perform;
3. buildings and premises suitable for performing bank activities, and the necessary technical equipment have been provided;
4. internal rules governing the following, have been submitted:
a) lending operations;
b) liquidity management;
c) forex positions management;
d) risk management and control;
5. an internal control office has been established and data has been submitted in respect of:
a) the person to be in charge of the internal control office, his curriculum vitae, a certificate proving no previous conviction,
copies of diplomas and other documents certifying his professional qualification and experience, a statement of existence of
any relatedness with other persons;
b) the appointed internal control officers: curricula vitae, and other documents certifying the qualifications and professional
experience required.
Conditions for Commencement of Bank Activity: Persons who have obtained a bank license may commence conductingbank
activity after they have submitted to the Deputy Governor heading the Banking Supervision Department the following documents and
information:
1. a certified transcript of the court decision proving that the bank, respectively the branch of the foreign bank, has been entered in
the Commercial Register;
2. a document certifying that the bank has paid in its initial contribution to the Deposit Insurance Fund
3. a certified copy of a document certifying the ownership right on the premises where bank activity will be conducted, or a lease
contract;
4. a document certifying that the premises under item 3 comply with security and protection requirements;
5. a certificate of fire protection compliance of the bank premises, issued by the specialized regional fire protection authorities;
6. a detailed description of the information support system of the bank, including measures for protection and transfer of
information, as well as hardware and software tools and technologies for in-house use
Time frame 6-12 months
40
Legal grounds
(Laws and Regulations)
LAWS
Law on the Bulgarian National Bank Law on Banks Law on Bank Bankruptcy Law on Bank Deposit Guaranty Law on Redenomination of the
Bulgarian Lev Law on the Measures against Money Laundering Law on the Financial Supervision Commission Foreign Exchange Law
REGULATIONS
Regulation No. 2 on the Licenses and Permits Granted by the Bulgarian National Bank Regulation No. 3 on Noncash Payments and the
National Payment System Regulation No. 4 Issued by the Ministry of Finance on the Terms and Procedure for Registration and Requirements
to the Activity of Exchange Bureaux Regulation No. 4 on Foreign Currency Positions of Banks Regulation No. 5 on the Terms and Procedure
for Issuance, Acquisition and Redemption of Book-entry Government Securities Regulation No. 6 on Extending Collateralized Lev Loans to
Banks Regulation No. 7 on the Big Exposures of Banks Regulation No. 8 on the Capital Adequacy of Banks Regulation No. 9 on the Evaluation
and Classification of Risk Exposures of Banks and the Allocation of Provisions to Cover Impairment Loss Regulation No. 10 on the Internal
Control in Banks Regulation No. 11 on Liquidity Management and Supervision of Banks Regulation No. 12 on the Supervision on a Consolidated
Basis Regulation No. 14 on Cross-border Transfers Regulation No. 15 on the Control over Transactions in Book-entry Government Securities
Regulation No. 16 on the Payments Initiated by Bank Cards Regulation No. 17 on Establishing the Amount of Bank Investment under Article 30
of the Law on Banks Regulation No. 19 on the Central Depository of Securities Regulation No. 20 on the Issuance of Certificates under Article
9, Para. 2 of the Law on Banks Ordinance No. 21 on the Minimum Required Reserves Maintained with the Bulgarian National Bank by Banks
Regulation No. 22 on the Central Credit Register of Banks Regulation No. 23 on the Terms and Procedure for Payment of Insured Amounts on
Deposits with Banks with Revoked Licenses Regulation No. 24 on the Exchange of Old Banknotes and Coins for New Banknotes and Coins in
Connection with the Redenomination of the Bulgarian Lev Regulation No. 25 under § 4, para. 2 of the Transitional and Final Provisions of the
Law on Redenomination of the Bulgarian Lev Regulation No. 26 on Foreign Exchange Transactions of Brokerage Financial Houses Regulation
No. 27 on the Balance of Payments Statistics Regulation No. 28 on Trans-border Transfers and Payments Regulation No. 31 on Government
Securities Settlement Regulation No. 32 on Reporting Requirements and Assignee’s in Bankruptcy Budget Regulation No. 33 on the Assignee’s
in Bankruptcy Remuneration Regulation No. 34 on Collecting Information and Conducting Inspections Regarding Assignee’s in Bankruptcy
Activity Regulation No. 35 on the Procedure for Auction Sale of Movables Placed as Collateral with a Bank
Regulation No 36 on Custodian Banks under the Social Security Code
4.2. Mutual funds
Competent authority Financial Supervision Committee - regulates the investment, insurance and social insurance activities
Procedures In order for a license to be issued to pursue the business of an investment company, an application form shall be filed with the Commission
with an approved by the deputy chairman form, to which shall be enclosed:
the Articles of Association and the other constitutive instruments;
particulars about the capital subscribed and paid-in;
information about the members of the management and supervisory bodies or about the natural persons representing legal entities
authorized to manage and represent the investment company, and information about their professional qualification and experience.
contract with the management company and contract for depository services;
the names or business names of and particulars about the persons who hold, directly or through related parties, 10 or more than 10
per cent of the voting shares of the applicant or may control it otherwise, as well as about the number of owned by them votes. The
persons shall submit written declarations, in determined by the deputy chairman form, concerning the origin of the funds from which the
contributions have been made for the shares subscribed, including whether these are loan funds, as well as about the taxes paid by the
persons over the preceding 5 years;
rules for portfolio evaluation and determining the net asset value;
the prospectus of an investment company of open-end type;
In order for a license to be issued to organize and manage a contractual fund, the management company shall file an application in a model
form, to which shall be attached:
1. the contractual fund’s rules;
2. decision of the competent body of the management company to organize a contractual fund;
3. the rules for portfolio valuation and determining the net asset value;
4. the contract for depository services;
5. the prospectus of the contractual fund;
6. other documents and data, as laid down in an ordinance
Requirements and conditions The contractual fund is a property set up with the purpose of collective investment in securities of cash, raised through public offering of units,
which is realized by a management company on the principle of risk diversification.
The contractual fund shall be organized and managed by a management company. In carrying out activities of the contractual fund’s
management, the management company shall act on its own behalf, pointing out that it acts for the contractual fund’s account
The management company may start performing the activity upon obtaining an authorization for organization and management of contractual
fund and the fund’s entry in the register. The contractual fund shall be considered established with its entry in the register
The contractual fund is only of the open-end type.
The net asset value of the contractual fund may not be less than 500 000 Leva. This minimum amount should be reached within one year of
obtaining the license for organization and management of contractual fund. Until reaching the minimum amount of the net asset value of the
contractual fund under sentence one above, no redemption of its units shall be allowed.
The contributions to the capital may only be in cash.
At least 25 per cent of the capital must be paid in as at the date of filing the application to issue a license for pursuing the activity of an
investment company, and the remaining portion - within 14-day period of the receiving of a written notification by the Commission that it will
issue the license after the full amount of the capital is paid in
Time frame n.a.
Cost (Fees) n.a.
Legal grounds
(Laws and Regulations)
Law on Public Offering of Securities
Ordinance on the Requirements for the Activities of Investment Companies
4.3. Leasing & non-bank consumer finance
Competent authority No particular regulative authority
Legal grounds
(Laws and Regulations)
The Commercial Code, Corporate Income Law, Law on Special Pledges, VAT Law and the National Accounting Standards/ IFRS
41
COMPETITIO-N top companies
5.1. Banks As at June 2005
Company Total
assets
(BGN m)
Net income
(BGN m)
MARKET
SHARE
DSK Bank 3,966 57.4 14.2
Bulbank 3,304 53.2 11.8
United Bulgarian Bank 2,703 37.5 9.7
Raiffeisenbank (Bulgaria) 2,240 22.8 8.0
First Investment Bank 2,229 10.0 8.0
HVB Bank Biochim 2,189 18.6 7.8
Bulgarian Post Bank 1,327 11.3 4.8
Economic and Investment Bank 975 1.6 3.5
DZI Bank 941 1.6 3.4
S.G. Expressbank 910 15.2 3.3
Central Cooperative Bank 681 0.6 2.4
Hebros Commercial Bank 656 -12.4 2.4
Allianz Bulgaria 536 3.7 1.9
Municipal Bank 519 2.9 1.9
Eurobank 475 2.1 1.7
Union Bank 430 8.9 1.5
Corporate Commercial Bank 430 2.5 1.5
Procredit Bank 408 5.1 1.5
BNP Paribas 332 1.4 1.2
Bulgarian American Credit Bank 318 9.6 1.1
5.2. Non-bank consumer finance companies
Company Loan
portfolio
(EUR m)
DATE
TBI Credit 3 2004
JetFinance n.a. 2004
BRS n.a. 2004
Transcard 2 2004
5.3. Non-bank consumer finance companies
Company Activity Lease
portfolio
(EUR m)
Market
share
DATE
Interlease Lease of
equipment,
vehicles, cars, office
equipment and real
estate property
85 26% 2004
Hebros Leasing Corporate leasing
company servicing
SMEs
16 10% 2004
BM Leasing Heavy trucks,
buses and
equipment leasing
n.a. 10% 2004
TBI Leasing Universal leasing 7 2% 2004
Unionleasing Universal leasing 3 2% 2003
WORTH to know
6.1. Useful contacts
Organization Address Phone E-mail Web site
Bulgarian National Bank 1 Alexander Battenberg Sq., Sofia 1000 +359 2 91459 press_office@bnbank.org www.bnb.bg
Financial Supervision Commission Vrabtcha str. N23, Sofia 1000 +359 2 940499 ssec_note@ssec.bg www.fsc.bg
Ministry of Finance 102 G.S.Rakovski Str., Sofia 1040 +359 2 985920 feedback@minfin.bg www.minfin.bg
Ministry of Economy and Energy 8 Slavianska Str., Sofia 1052 +359 2 9407303 public@mi.government.bg www.mee.government.bg
InvestBulgaria Agency 31 Aksakov Str., Sofia 1000 +359 2 9855500 iba@investbg.government.bg investbg.government.bg
Privatization Agency 29 Aksakov Str., Sofia 1000 +359 2 9873294 press@ priv.government.bg www.priv.government.bg
Agency for Economic Analysis and Forecasting 31 Aksakov Str., Sofia 1000 +359 2 98595601 aeaf@aeaf.minfin.bg www.aeaf.minfin.bg
Central Depository 31 Tzar Shishman Str., Sofia 1000 +359 2 9810318; +359 2 9812314 info@cdad.bg www.cdad.bg
Association of Commercial Banks 97 Kniaz Boris I Str. +359 2 9816493 atb@intech.bg www.acb.bg
6.2. Useful contacts
Organization type Web site Organization type Web site
Bulgarian financial investor web portal www.investor.bg Bulgarian banking weekly newspaper www.banker.bg
Bulgarian business and finance weekly newspaper www.capital.bg Bank products catalog banks.dir.bg – BG only
Bulgarian business and finance daily newspaper www.dnevnik.bg Banks and bank products catalog Banki.start.bg
Bulgarian business and finance daily newspaper www.pari.bg Leasing companies and products catalog Lizing.start.bg
42
43
1. Why Bulgaria? 44
1.1. Infrastructure 44
1.2. Transport & Logistics 44
2. Latest deals & ongoing projects 44
2.1. Infrastructure, transport & logistics 44
2.2. Construction & building materials 45
3. Infrastructure Fact Sheet 45
4. Transport & Logistics Fact Sheet 46
5. Legal procedures – concessions 47
5.1. Public state property concession 47
5.2. Public municipal property concession 47
6. Competition & partners in Bulgaria 48
6.1. Top companies in construction 48
6.2. Top companies in transport & logistics 48
7. Worth knowing 49
7.1. Educated workforce 49
7.2. Sector-related exhibitions in Bulgaria 49
8. Useful contacts 50
9. Useful sites 50
TABLE contents of
YOUR
MOVE
Bulgaria:
Infrastructure & Logistics Sector
2006 InvestBulgaria Agency
WHYBulgaria?
1.1. Infrastructure
Strategic geographic location of the country
Bulgaria’s infrastructure needs significant investment in order to meet EU standards
Opportunities to acquire concessions on key infrastructure segments
Opportunities to participate in infrastructure reconstruction and modernization through tenders
Forthcoming modernization of the entire railway infrastructure
1.2. Transport & Logistics
Potential in the development of logistics centers throughout the country
Forthcoming privatization of the state companies in river and sea transportation
Need for modernization of large percentage of the transport equipment in the country
Opportunities for acquisition of private transport companies
L ATEST DE ALS & ongoing projects
2.1. Infrastructure, transport & logistics
Vendor Investor Target Size (EUR m)
Government Bulgarian-Portuguese consortium Trakia Motorway Concession for 35 years 590
Government ISPA Sofia - Pernik Motorway (part of the #4 Pan-European transport corridor) 148.5
Siemens BDZ - Bulgarian state railways
operator
Supply of 15 three-car and 10 four-car Desiro Classic EMU electric trains, starting in
mid-2007 and finishing in mid-2008
117
Government ISPA / PHARE / Government
Strabag (Austria) and Ingstroy
Lot 9: repair of a 73.5 km - long section of Bulgaria’s E79 road; Lot 4: repair of 33
km of the Hemus highway; 2 lots involving reconstruction of roads leading to tourist
and cultural sites in Southern Bulgaria
20
Greenfield Royal Frans Maas (Netherlands) Logistics centre 15
Greenfield Willi Betz (Germany) Logistics centre 7.8
Sofia municipality Sofia municipality Bus station in Sofia 7.7
Government PHARE / Government Bulgaria - Romania Ferry line 4.9
Greenfield Biomet Construction of a 10,000 sqm logistics center for the bathroom fixture manufacturers
Vidima and Ideal Standard Bulgaria
3.6
Roment Trading Co Ltd. (Cyprus) Hemus Air Viaggio Air (Air transport) n.a.
44
Pipeline projects
Vendor Investor Target Size (EUR m)
Government Government 145 km of Plovdiv - Svilengrad railroad 388.0
Greenfield ISPA / EIB / Government / KfW Construction of 2nd Danube bridge by 2007 230.0
Government ISPA Lyulin motorway (part of #4 Pan-European transport corridor) 111.4
Greenfield Sienit Ltd., Rakovski Municipality Building of an industrial zone in Rakovski 100.0
Government Terna (Greece) Construction of a 37.7 km section of a major railroad linking Europe and
the Middle East
85.7
Greenfield Government Opening of 15 new border checkpoints to the current 21 by 2015 n.a.
2.2. Construction & building materials
Vendor Investor Target Size (EUR m)
Greenfield Xella Bulgaria Concrete plant, porous concrete bricks 17.0
Greenfield Fibran-Bulgaria (Fibran Group) Plant for insulation materials 7.0
Greenfield Kirchdorfer Group (Austria) Inert and concrete materials factory 6.0
Greenfield Austroterm (Austria) Hydro and thermal insulation materials plant 4.0
Modernization Knauf (Austria) Plant upgrade 2.8
First motorway concession granted in Bulgaria
Concession holder Consortium Trakia (51% Portuguese firms, 49% Bulgarian Government)
Investment EUR 717 million
Term 35 Years
Highway length 443 km
Deadline End of 2009
Cost per kilometer EUR 2.7 million
INFRASTRUCTURE Fact Sheet
Infrastructure, transport & logistics Planned infrastructure investment in Bulgaria
Construction of Sofia-Nis motorway (part of Pan-European
corridor #10)
Reconstruction and modernization of Russe - Dimitrovgrad
railway
Construction of the road to the Bulgaria – Greece frontier at
Makaza border point
Finishing the construction of Marica motorway (Orizovo
– Harmanli section)
Development of Krumovo airport (Plovdiv)
Development of an inter-modal terminal near Sofia
Construction of a tunnel under Shipka mountain peak (the
narrowest section of Pan-European corridor #9)
Construction of a railway connection between Bulgaria and
Macedonia (Gueshevo – Kriva Palanka)
Modernization and organization of the border points in Varna and
Burgas harbours as a future outer border of the EU
45
TRANSPORT & LOGISTICS
Fact Sheet
Freight and passenger transportation
Sources: National Statistics Institute, EIU, airports in Sofia, Varna and Bourgas
Case studies
Schenker, Germany Koninklijke Frans Maas Groep N.V., the Netherlands
Schenker, one of the leading international providers of integrated logistic services
opened a subsidiary in Sofia in 1993
Four branch offices had been opened till 2002 – in Plovdiv, Varna, Russe and
Sevlievo
Employees in Bulgaria, 2004: 200 people
The turnover of the Bulgarian subsidiary in 2004 amounts to EUR 19.9 m
May 2004 – Koninklijke Frans Maas Groep NV launched the construction of a
EUR 15 m logistics terminal of 50,000 sq m span near Sofia
The largest greenfield investment of the Dutch Group in Eastern Europe
1st phase of the project – construction of a cargo terminal, freight forwarding
facility and a modern office space – to be completed in spring 2005
The Dutch group already has a logistics facility at Bulgaria’s Danube port city
of Rouse
Frans Maas Groep company information:
- Full-service logistics provider with a 214 locations network in 32
European countries and over 7,500 employees
- Net sales in 2004 – € 1,091.4 m
Willi Betz, Germany
At the end of 2004, Willi Betz, one of the leading logistics companies in Europe,
opened a new EUR 7.67 m logistic centre which is the company’s first one in
Bulgaria
The centre is based in Sofia and spreads over 50,000 sqm with an indoor storage
area of 19,300 sqm
The company plans to open storage and freight forwarding facilities in other major
Bulgarian cities – Bourgas and Varna at the Black Sea, the Danube river port of
Ruse and Pazardzhik in Southern Bulgaria. At least two of these centres will be
built by the end of 2005
Willi Betz’s clients in Bulgaria include Bosch, Metro Cash & Carry, Shell, OMV,
Henkel, Osram, Wella, Praktiker, Kronospan, American Standard, etc.
Willi Betz’s presence in Bulgaria dates back to 1994 when the company bought
55% of the Bulgarian freight forwarder SOMAT (now holding 96% of SOMAT)
Investment in Bulgaria by the end of 2004: EUR 245 m
Employees in Bulgaria, 2004: 3,800 people
DHL, the Netherlands
1991: DHL International Ltd registered in Bulgaria with 15 employees personnel
working in two offices in Sofia
By 1998: DHL created a country network of 30 offices
1994: DHL Bulgaria starts using a regular daily charter flight
1997: DHL Bulgaria was ISO 9002 certified; Jumbo Box service was introduced
1999: Import Express service was introduced
2004: DHL’s business in Bulgaria had doubled over the past 3 years; 29% yoy increase
in 2004; 180 employees
2005: Bulgarian Danzas and DHL International merged into DHL Express Bulgaria
2005: DHL moved to a new 2,200 sq m building next to Sofia airport
Total freight traffic (million tons)
118
99
118
108
80
90
100
110
120
2000 2001 2002 2003
Road, railway & pipeline transport (million tons)
76 77
94 94
0
20
40
60
80
100
2000 2001 2002 2003
Number of passengers serviced by the
top 3 airports in Bulgaria per year, 2003-2004
1.346
1.185
1.026
1.605
1.334 1.353
0.0
0.4
0.8
1.2
1.6
2.0
Sofia Varna Bourgas
million
2003 2004
Road, railway & pipeline traffic (bn tons per km)
13 14 15 16
0
4
8
12
16
20
2000 2001 2002 2003
46
LEGAL PROCEDURES -
concessions
5.1. Public state property concession
Description of the procedure Granting of concession for utilization of property and resources which are public state property
Legal grounds Constitution of the Republic of Bulgaria; Concession Law
Authority Council of Ministers
Objects of concession 1. Extraction of underground resources;
2. Sea side waterfront;
3. Biological, mineral and energy resources of the continental shelf and in the exclusive economic zone, in reference to the exploration,
development, production and utilization thereof;
4. Roads, sites of the railway infrastructure, including the land on which they are constructed or designated for their construction, one or
more terminals of a port for public transport of national importance, and in cases determined by law – on parts of a port terminal and civil
aerodromes for public use, existing and/or to be constructed with resources of the concessionaire, public state property;
5. Waters, including mineral waters;
6. Water supply facilities and systems.
Main steps of the procedure 1. Adoption of a resolution for granting of concession by the Council of Ministers on proposal by the Prime Minister or the respective Minister;
2. Promulgation of the decision in the State Gazette and one central daily newspaper;
3. Carrying out a tender or an auction by the authorized Minister;
4. Conclusion of the concession agreement between the authorized Minister and the applicant who has been awarded the tender or auction.
Required documents The application for participation in the tender or auction has to be accompanied by:
1.Certificate for registration of commercial activity registration as a commercial company or as a sole proprietor under the Bulgarian
Commerce Law;
2. Financial statements for the last 3 years;
3. Certificate for purchased tender or auction documents and for paid deposit;
4. Nondisclosure agreement if such is included in the tender or auction documentation.
5. Work plan for implementing the activity related to the concession
5.2. Public municipal property concession
Description of the procedure Granting of concession for utilization of property and resources which are public state property
Legal grounds Constitution of the Republic of Bulgaria; Law on the Municipal Ownership
Authority Municipal Council
Objects of concession 1. Waters, water sites and water facilities;
2. Underground resources;
3. Roads;
4. Forests;
5. Energy networks and facilities;
6. Sport sites and facilities, etc.
Main steps of the procedure 1. Resolution for granting concession by the Municipal Council upon a proposal by the mayor of the respective municipality;
2. Promulgation of the decision in the State Gazette and one local daily;
3. Carrying out a tender or an auction by the mayor;
4. Conclusion of the concession agreement between the mayor and the applicant who has been awarded the tender or auction
Required documents The application for participation in the tender or auction has to be accompanied by:
1.Certificate for registration of commercial activity registration as a commercial company or as a sole proprietor under the Bulgarian
Commerce Law;
2. Financial statements for the last 3 years;
3. Certificate for purchased tender or auction documents and for paid deposit;
4. Nondisclosure agreement if such is included in the tender or auction documentation.
5. Work plan for implementing the activity related to the concession
Note: In compliance with the Roads Law, the Council of Ministers may adopt a decision for relieving the concessionaire from the obligation to pay for the granted concession for a
definite period or for the entire term of the contract, depending on the economic efficiency of the project or may stipulate a right of the concessionaire of ownership of the proceeds
from the traffic fees and/or for using the motorway as well as other relief.
47
6.1. Top companies in construction
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Glavbolgarstroy (Sofia) Industrial, residential and infrastructure construction 75,340 3,500 2004
2 GBS-Sofia (Sofia) Industrial, residential and infrastructure construction 37,403 735 2004
3 “Stroitelstvo & Vazstanovyavane” State Enterprises
(Sofia)
Complex construction 31,076 3,034 2004
4 Lindner Imobilien Bulgaria (Sofia) Office and residential construction 23,140 71 2004
5 Geotechmin (Sofia) Test drilling and boring, construction 20,301 500 2004
6 Naftex Engineering (Sofia) Construction of buildings and civil engineering works 20,125 120 2003
7 Avtomagistrali Cherno more (Shumen) Road construction 19,095 699 2003
8 PSI (Stara Zagora) Road construction 17,459 270 2004
9 Siconco Building (Sofia) Industrial, residential and infrastructure construction 17,163 134 2004
10 Miks-PS (Sofia) Construction of buildings and civil engineering works 15,493 220 2004
11 Monolit-3 (Sofia) Industrial, office and residential construction 13,609 312 2004
12 Binder (Sliven) Road construction 12,842 53 2004
13 “Transport Construction and Rehabilitation” State
Enterprise (Sofia)
Road and railway construction 12,659 114 2004
14 Sienit (Plovdiv) Industrial, residential and infrastructure construction 12,482 382 2003
15 Ingstroy Sofia (Sofia) Industrial, residential and infrastructure construction 10,817 361 2004
6.2. Top companies in transport & logistics
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Navigation Maritime Bulgare (Navibulgar) (Varna) Water transport 189,297 4,904 2004
2 Bulgarian State Railways (Sofia) Railroad transport 186,916 17,337 2004
3 SO MAT (Sofia) Freight road transport 100,245 3,800 2004
4 National Company Railway Infrastructure (Sofia) Railway infrastructure maintenance 92,514 15,696 2004
5 Air Traffic Control (Sofia) National air traffic control 77,874 2,770 2004
6 Bulgaria Air (Sofia) Air transport 74,167 303 2004
7 BH Air (Sofia) Air transport 30,506 170 2004
8 SKGT-Autotransport (Sofia) City road transport 28,845 2,483 2004
9 Sofia Airport (Sofia) Airport services 27,274 1,078 2004
10 Aviation Company Hemus Air (Sofia) Air transport 23,879 257 2004
11 Bulgarian Air Charter (Sofia) Air transport 20,542 183 2004
12 M & M Militzer & Munch BG (Sofia) Transport & logistics 17,987 189 2004
13 SKGT-Electrotransport (Sofia) City transport 17,581 2,138 2004
14 Schenker Bulgaria (Sofia) / Stinnes Logistics Transport & logistics 16,881 192 2004
15 Transland (Sofia) Transportation 16,433 36 2004
Source: Bulgarian Industrial Association
COMPETITION & PARTNERS
Fact Sheet
48
WORTH
knowing
7.1. Educated workforce
University / College Location Majors
U1 University of Architecture, Civil Engineering and Geodesy
www.uacg.bg
Sofia Architecture
Structural Engineering
Transportation Engineering
Irrigation and Drainage Engineering
Hydraulic Engineering
Hydraulic Engineering (in German)
Water Supply and Sewage
Geodesy
Urbanism
U2 “Todor Kableshkov” Higher School of Transport
www.vtu.bg
Sofia Technology and Management of Transport
Transport Machines and Technology
Engineering Logistics and Construction Machines
Transportation Engineering
Power Engineering and Electrical Equipment
Telecommunications and Signaling
C1 College of Transport
www.vtu.acad.bg
Sofia Technology and Management of Transport
Transport Equipment and Technology
Telecommunications Equipment and Technology
Road and Railroad Building
Power Industry and Electrical Equipment
Mechanical Handling and Building Machines
A1 Nicola Vaptsarov” Naval Academy
www.naval-acad.bg
Varna Marine Engineering
U3 “Luben Karavelov” Civil Engineering Higher School
www.vsu.bg
Sofia Structural and Construction Engineering
7.2. Sector-related exhibitions in Bulgaria
Exhibition name Location (City) Dates Frequency For more info
Bulgaria Building Week
(Construction materials, machines, equipment and tools, security
systems, frameworks, doors and windows)
Inter Expo Center
(Sofia)
15 - 19 Mar 2005 Annually www.bulgarreklama.com
Stroiko 2000
(Commercial exhibition for architecture, building and furnishing)
National Palace of Culture
(Sofia)
23 - 29 Mar 2005
20 – 26 Oct 2005
Twice a year
(March &
October)
www.stroiko2000.com
Stroytech – The City
(International exhibition of construction and architecture)
Plovdiv International Fair
(Plovdiv)
26 Sep - 1 Oct
2005
Annually www.fair.bg
Autotech
(International exhibition of transport and auto service equipment)
Plovdiv International Fair
(Plovdiv)
26 Sep - 1 Oct
2005
Annually www.fair.bg
49
USEFULcontacts
Organization Phone Web site
Ministry of Regional Development and Public Works +359 2 940 5430 www.mrrb.government.bg
Ministry of Transport +359 2 940 9500; +359 2 940 9434 www.mtc.government.bg
Bulgarian National Forwarders Association +359 2 946 1214 www.members.bitex.com/nsbs
Union of Architects in Bulgaria +359 2 943 8321 www.bularch.org
“Todor Kableshkov” Higher School of Transport +359 2 970 9211 www.vtu.bg
Customs Agency +359 2 9859 4210; +359 2 9859 4213 www.customs.bg
Cadastre Agency +359 2 818 8383 www.cadastre.bg
Air and sea transport
Directorate General “Civil Aviation Administration” +359 2 937 1047 www.caa.bg
Bulgarian Airlines Association +359 2 942 4121; +359 2 942 4126 www.aba.dir.bg
Sofia Airport +359 2 937 2063 www.sofia-airport.bg
Varna Airport +359 52 500 834; +359 52 500 840 www.varna-airport.bg
Burgas Airport +359 56 870 201; +359 56 870 248 www.bourgas-airport.com
Maritime Administration +359 2 930 0910; +359 2 930 0955 www.marad.bg
Executive Agency for Exploration and Maintenance of the Danube River +359 82 823 130; +359 82 823 132 www.appd-bg.org
Bulgarian Ports Authority - Port Tariffs +359 2 940 9773 www.port.bg
Navigation Maritime Bulgare +359 52 632 863; +359 52 683 556 www.navbul.com
Bulgarian River Shipping Co. +359 82 822 133 www.brp.bg
Port of Varna +359 52 692 508 http://port-varna.bg
Port of Burgas +359 56 842 261 www.port-burgas.com
Burgas Marine Association +359 56 42 348; +359 56 480 322 98 www.bourgas.net/business/bma
Port of Lom complex +359 971 42 208 http://port.lom-bg.com
Roads and railways
Road Executive Agency +359 2 952 1768 www.rea.government.bg
Bulgarian Roads Branch Chamber +359 2 952 3036; +359 2 516 7400 www.bgroads.com
Association of the Bulgarian International Road Hauliers +359 2 958 1475; +359 2 958 1476 www.aebtri.com
Sofia Public Transport Company Ltd (SKGT) +359 2 831 7195 www.skgt-bg.com
Railway Administration Agency +359 2 940 9427; +359 2 940 9517 www.railbg.com
Bulgarian State Railways (BDZ) +359 2 932 4248; +359 2 981 0909 www.bdz.bg
National Company “Railway Infrastructure” +359 2 932 3413; +359 2 931 2316 www.rail-infra.bg
“Transport Construction and Rehabilitation” State Enterprise +359 2 832 7004; +359 2 832 6151 www.tsv.online.bg
Metropolitan Sofia +359 2 921 2001; +359 2 921 2074 www.metropolitan.bg
USEFUL sites
Organization/Source Web site
Construction Companies Web Portal www.build.bg (Bulgarian only)
Bulgarian Construction Portal www.stroitelstvo.bg
Bulgarian Construction News www.bulgariaconstruction.com
Bulgarian Transport Publishing House www.bg-transport.com
Bulgarian Railway Transport Magazine www.jptactis.com
European Conference of Ministers of Transport www.cemt.org
United Nations Economic Commission for Europe (Transport Division) www.unece.org/trans/
Organization of the Black Sea Economic Cooperation (BSEC) www.bsec.gov.tr
International Maritime Organization (IМО) www.imo.org
Danube Commission www.dunacom.org
International Civil Aviation Organization (ICAO) www.icao.int
European Civil Aviation Conference (ECAC) www.ecac-ceac.org
International Union of Railways (UIC) www.uic.asso.fr
International Road Transport Union (IRU) www.iru.org
International Federation of Freight Forwarders Associations (FIATA) www.fiata.org
Southeast European Cooperative Initiative (SECI) www.unece.org/seci/
Transport Infrastructure Needs Assessment in Central & Eastern Europe (TINA) www.tinavienna.at
Transport Corridor Europe-Caucasus-Asia (TRACECA) www.traceca-org.org
50
51
1. Why Bulgaria? 52
2. Latest deals 52
3. Food & Beverage Fact Sheet 53
4. Legal 54
4.1. Registration of the vine farms 54
4.2. Registration for production of spirits, distillates and alcoholic beverages 54
4.3. Registration of food–producing enterprises 54
4.4. Production and trade of animal foods 54
5. Competition, partners, suppliers 55
5.1. Top companies in food & beverage 55
5.2. Top beer, wine and spirits producers 55
5.3. Top companies in agriculture 55
6. Worth knowing 56
6.1. Educated workforce 56
6.2. Sector-related exhibitions in Bulgaria 56
7. Useful contacts and links 56
TABLE contents of
YOUR
MOVE
Bulgaria:
Food & Beverage Sector
2006 InvestBulgaria Agency
WHYBulgaria?
Bulgaria has the largest number of mineral water deposits in Europe - more than 250 mineral water deposits and over
500 sources and boreholes in the country (France – 64; Spain - 89)
Strong traditions in wine making – 2% of the world market share
Very high quality organic products (ban on GM products)
EU food legislation integrated in the Bulgarian legislation
Unique climate conditions support wide variety of crops, fruit and vegetables
Environmentally clean and fertile soil
L ATESTdeals
Vendor Investor Target Size (EUR m)
Familia Equest Partners (UK) Acquisition of 30% of the Bulgarian supermarket chain Familia 26
Modernization Karnobat Winery Upgrade of production facilities 9
Carlsberg Bulgaria Investment Fund for CEE (Denmark) 20% of Carlsberg Bulgaria 7.5
Ikken/Bora Consult Discopm Holding Bankya Mineral Water (bottling company) acquisition 7
Greenfield Domain Menada New winery 4
Extension Nestle Bulgaria Distribution center 2.6
Government Coca Cola HBC (Greece) 20-year mineral water concession 2.1 EUR/m3
Greenfield Azi Agro Holding (Italy) Strawberries processing plant 2
Greenfield Brewinvest (Coca Cola HBC/Heineken
J/V)
New hi-tech brewing facility 2
Zagorka AD Bulmalt Ltd Acquisition of Zagorka’s malt plant in Chirpan 1.35
Modernization Vitabal Meat processing plant modernization 1.2
Greenfield Tefenlili Gida (Turkey) Nuts factory 0.5
Rusteco Protein Provimi (Holland) Animal feed producer Undisclosed
Discopm Holding Coca Cola / Coca Cola HBC 100% of Bankya Mineral Water Undisclosed
Pipeline projects
Vendor Investor Target Size (EUR m)
Greenfield Wine sector Planting 5,000 ha of new vineyards a year in 2005 and 2006 200
Extension Carlsberg Bulgaria New production facilities in its two Bulgarian breweries 18
Greenfield Sammisound (South Korea) Spaghetti Factory (Korean type of spaghetti) 15
Belvedere Capital Management EBRD EUR 7 m long-term secured debt + EUR 2 m for acquisition of 10-20% share in the company 9
Greenfield Icefruit Processing, freezing and canning plant 6
Modernization BBB Group Implementation of new technologies 5
Greenfield Boni Holding New slaughterhouse 3.6
Extension Lactina Probiotics plant completion 2
Extension Norex Agro (Bulgarian-Dutch J/V) 8 silos and auxiliary facilities 1.5
Greenfield BiV Herbs (Bulgarian-Dutch J/V) Herb processing plant 1
Modernization Bravo Boosting output capacity by 70% to 50 tons of meat products daily 1.5
Acquisitions Metro Cash & Carry (Germany) Opening of approx. 200 stores in Bulgaria under the Aro brand through acquisitions n.a.
52
FOOD & BEVERAGE Fact Sheet
Importance of the food & beverage industry for Bulgaria
Export
Sources: National Statistics Institute, Bulgarian National Bank
Attractive subsectors
Mineral water
More than 250 mineral water deposits and over 500 sources and boreholes in the country (France – 64; Spain - 89)
Capacity of different mineral sources varies from 0.5 to 63 l/sec
Overall capacity of mineral water sources in Bulgaria - over 3100 l/sec
Depth of water sources – 400 - 1500 meters
Temperature varies from 13ºC to 102ºC
Hottest mineral spring in Bulgaria – Sapareva Bania (102ºC)
Degree of mineral water resources usage – 37%
Annual consumption of soft drinks in 2004 – 1,070 million liters which is 138 l/capita
Market share of soft drinks in 2003 – 55%
Consumption of mineral water has increased 5 times since 1991 and is still rising
Mineral water consumption in 2004 – 419 million liters (54 l/capita) per annum
Wine-making
2% of the world market share
Amongst the top 15 wine producing and exporting
nations in the world
Industry is 100% private as of 2000
About 50 cellars producing bottled and bulk red, white
and sparkling wines
More than 80% export production
Wine export has 2% share of Bulgarian exports in
value terms
Total production of wine industry in 2003 is 1.7 million
hl and is expected to rise to 3.6 million hl in 2005
Case studies
Amylum Bulgaria Nestle Bulgaria
Amylum entered the Bulgarian market in 1993
The company produces wide range of starches, glucose syrups, crystalline and
liquid dextrose, high fructose corn syrups (HFCS) and maltodextrins
The produce of the company is applicable to different sectors of the industry
- Food & Beverages, Pharmaceuticals, Fermentation, Paper and Corrugated
Board, Compound Feed Industry, etc.
Investment value – USD 52 m (1993-2004)
Employees in 2004 - 210
The largest food company in Bulgaria
Nestle S.A. entered the Bulgarian market in 1994 after the purchase of the largest
confectionery plant in the country, located in the outskirts of the capital Sofia.
Investment (1994-2004) – USD 33 m
The company’s microbiological laboratory in Bulgaria was certified as the Nestle
laboratory ensuring the most precise analyses in the world
25% year-on-year sales increase in 2004
Capital in 2004 - EUR 4.3 m
Employees in 2005 – 975
Carlsberg Bulgaria Trakia Water
Present in Bulgaria since 2002
Carlsberg Breweries A/S (Denmark) purchased Shumensko Pivo JSC and
Pirinsko Pivo JSC
USD 70 m invested till the end of 2004
About 20% market share (3rd place in Bulgaria)
670 employees
Major Carlsberg brands in Bulgaria: Shumensko pivo, Pirinsko pivo and Tuborg
In 2004, Carlsberg Bulgaria JSC sold 20% of the shares to Investment Fund
for Central and Eastern Europe
Shumensko Pivo is the most dynamically developing brewery in Carlsberg group
Trakia Water JSC is a Swiss-German-Bulgarian company, based in Plovdiv
Size of investment – EUR 1 million
Trakia Water JSC holds the concession for the “Vojvodinovo” mineral source in
Voivodinovo village, Municipality of Maritsa
The main scope of activities of the company is bottling of natural mineral water, sparkling
natural mineral water and production of soft drinks based on natural mineral water
The company owns a modern bottling factory, provided with high- tech and completely
automatic equipment
Trakia Water JSC realizes its production on the export and home markets under the
trade mark АquaТRAKIA.
Share of Food processing in Bulgaria’s
industrial gross output, 2004
Food
processing
16.2%
Production of Food,
beverages & tobacco (EUR m), 2000 - 2004
1756 1824
1937
2108
2364
1000
2000
3000
2000 2001 2002 2003 2004
EUR million
Share of employees in Food processing in the
total workforce, 2004
Food
processing
3.6%
Export of the Food & Beverage industry, 2000-2004 (EUR m)
146
172
321
218
279
172
219
247
300
349
83 77 75 73 73
0
100
200
300
400
2000 2001 2002 2003 2004
Raw materials for the food industry Food Beverages
Export of the Food & Beverage industry
as % of the total export of Bulgaria, 2004
Total export of Bulgaria - EUR 8 bn
8.8%
Annual average gross salary in the food,
beverages and tobacco industries
(Private sector data)
1,484
1,319
1,182 1,227
0
400
800
1200
1600
2000
2001 2002 2003 2004 EUR
53
Legal
4.1. Registration of the vineyards
Authority Executive Agency for the Vine and Wine at the Ministry of Agriculture and Forestry
Required documents Individuals and companies producing wine grape must register at the Executive Agency for Vine and Wine.
The application for registration must be accompanied by:
1. Declaration form issued by the Executive Agency for the Vine and Wine for the location of the vine plants;
2. Certificate of incorporation/registration – for corporate entities;
3. BULSTAT card register.
Timeframe 14 days
Legal framework Wine and Alcoholic Beverages Law
4.2. Registration for production of spirits, distillates and alcoholic beverages
Authority Minister of Economy
Required documents Production of spirits, distillates and alcoholic beverages can be carried out only by persons registered as entrepreneurs in the meaning of the
Commercial Law, entered in the register of the producers of spirit, distillations and alcoholic beverages at the Ministry of Economy upon submitting
an application accompanied by:
1. Court decision for registration and certificate of actual state
2. Technical information about opened and closed production sites and storehouses
3. Permit for using the production site
4. Technical specifications for the production of spirits, etc.
5. Sanitary permit for exploitation of the production site
6. List of technicians managing the production process
7. BULSTAT card
8. Declaration from the producer that he has not produced spirits without license
9. Receipt for paid state taxes
Timeframe 14 days
Legal framework Wine and Alcoholic Beverages Law
4.3. Registration of food - producing enterprises
Authority 1. Regional office of the Regional Inspection for Preservation and Control of the Public Health (RIPCPH) at the Ministry of Health
2. Regional office of the Veterinary Supervision at the Ministry of Agriculture and Forestry
Required documents The RIPCPH registers the sites of production of foodstuffs of non-animal origin and of the trading places of foodstuffs, with exception of the
wholesale trading places for foods of animal origin. The regional veterinary office registers the sites for obtaining, production, processing, storing,
packing and re-packing of raw materials and foodstuffs of animal origin, as well as the sites of wholesale trade of foodstuffs of animal origin.
In order to register the persons file an application form, accompanied by:
1. Certificate for actual state of the applicant
2. Permit for use of the production site under Spatial Planning Law
3. List of the foods that will be produced
Timeframe 30 days for inspection of the documents and 14 days for completing the registration
Legal framework Foods Law
4.4. Production and trade of animal foods
Authority Minister of Agriculture and Forestry
Required documents The individuals and the corporate entities producing and/or trading with products or substances designated for animal food must register at the
Ministry of Agriculture and Forestry not later than 30 days after start of activity.
The registration is made upon submitting an application to the Minister of Agriculture and Forestry
Timeframe Not specified
Legal framework Fodder Law
54
COMPETITION,
PARTNERS, suppliers
5.1. Top companies in the food & beverage industry
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Nestle Bulgaria (Sofia) Sugar and chocolate products 52,203 975 2004
2 Amylum Bulgaria (Razgrad) Production of cereal related products 40,055 216 2001
3 Chipita Bulgaria (Kazichene) Croissants, flour and food-stuffs 38,774 523 2004
4 Coca Cola HBC Bulgaria (Sofia) Bottling of water and soft drinks 35,300 1,100 2004
5 Sugar Plants (Gorna Oryahovitza) Sugar production 32,691 1,250 2004
6 Danone Serdika (Sofia) Production of dairy products 28,710 324 2004
7 Meat Factory-Lovech (Lovech) Meat and meat products 28,613 430 2004
8 Kaliakra-Dobrich (Dobrich) Refined oils and fats 26,426 410 2004
9 Agrima (Sofia) Beverages 18,049 573 2004
10 Sofia Mel (Mill factory Kraps-Mel 1) (Sofia) Production of flour, grain 15,206 218 2004
11 Brezovo (Brezovo) Meat and meat products 13,618 133 2004
12 Delta - Bulgaria (Delvi-P) (Sofia) Ice-cream production 11,110 602 2004
13 Day and Night (Gorna Oryahovitza) Wafers manufacturing 10,720 111 2004
14 Pobeda - Burgas (Burgas) Production of rusks, biscuits; pastry goods and cakes 10,179 594 2004
15 Dobrudzhanski hlyab (Dobrich) Bread production 10,122 330 2004
16 Prestige - 96 (Veliko Tarnovo) Production of biscuits; pastry goods and cakes 10,091 n.a. 2004
17 Kendy (Bankya) Mineral water and soft drinks 9,717 127 2004
18 Meggle-MJ (Sofia) Production of dairy products 9,235 134 2004
19 Slanchevi lachi Bulgaria (Sofia) Production of vegetable oil 9,233 205 2004
20 Tandem-V (Sofia) Meat and meat products 9,172 157 2004
5.2. Top beer, wine and spirits producers
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Zagorka (Stara Zagora) Beer production 74,649 464 2004
2 Kamenitza (Sofia) Beer production 69,842 1,796 2004
3 Carlsberg Bulgaria (Sofia) Beer production 42,840 670 2004
4 Domaine Boyar (Sofia) Wine production 13,266 309 2004
5 SIS Industries (Sofia) Spirits production 12,300 1,038 2004
6 Boliarka VT (Veliko Tarnovo) Beer production 11,742 236 2004
5.3. Top companies in agriculture
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Gradus - Ivan Angelov–55 (Panagyurishte) Farming of poultry 19,535 79 2004
2 Viand (Sofia) Growing of crops, farming of animals 12,483 48 2004
3 Eggs and Chicken Company - Zora (Donchevo) Poultry and eggs 7,581 350 2004
4 Industrial and Hybrid Animal Breeding Brothers Commerce (Shumen) Animal breeding 7,388 333 2004
5 V & VGD Green-houses - Petrich (Petrich) Production of vegetables & seedlings 6,708 262 2003
6 Svinecomplex Samuil (Russe) Farming of swine 5,063 n.a. 2004
7 Svinecomplex Brashlen (Brashlen) Farming of swine 4,975 n.a. 2004
8 Hybrid Centre for Pig-breeding (Shumen) Farming of swine 4,134 72 2004
9 Klokotnica - Haskovo (Haskovo) Farming of swine 4,024 140 2003
10 South Wine (Burgas) Vine-growing 3,735 n.a. 2004
Source: Bulgarian Industrial Association
55
6.1. Educated workforce
University / College Location Majors (sector related)
U2 Agricultural University - Plovdiv
www.au-plovdiv.bg
Plovdiv General Agronomy
Animal Breeding and Husbandry
Agronomy – Horticulture with
Viticulture
Agro engineering
Tropical and Subtropical Agriculture
Agricultural Economics
Plant Protection
C1 Bulgarian-German Agricultural College
within Trakia University www.uni-sz.bg
Stara Zagora Farming
Agronomy
Agricultural Economics
Agro engineering
C2 Higher School Agricultural College
http://agricollege.hit.bg
Plovdiv Technologies in horticulture and
wine-production
Agricultural economics
Farming
6.2. Sector-related exhibitions in Bulgaria
Exhibition Name Location (City) Dates Frequency For more info
Vinaria (International exhibition of vine-growing & wine producing;
national wine & spirits tasting)
Plovdiv International Fair
(Plovdiv)
16 - 20 Feb 2005 Annually www.fair.bg
Agra
(International agricultural exhibition)
Plovdiv International Fair
(Plovdiv)
22 - 26 Feb 2005 Annually www.fair.bg
Varna MeatMania 2005 Palace of Culture and
Sports (Varna)
2 - 5 Mar 2005 Annually http://amb.dir.bg
International Consumer Goods and Technologies Fair Plovdiv International Fair
(Plovdiv)
9 - 14 May 2005 Annually www.fair.bg
Foodtech
(International exhibition of food products and technologies)
Plovdiv International Fair
(Plovdiv)
9 - 14 May 2005 Annually www.fair.bg
Bulpek 2005 (International exhibition for bakery and confectionery) “Festivalna” Hall (Sofia) 26 – 29 Oct 2005 Annually www.fbcb-bg.org
Interfood & Drink (Food products and beverages) Inter Expo Center (Sofia) 16 - 19 Nov 2005 Annually www.bulgarreklama.com
The World of Milk (Milk products and specialized equipment) Inter Expo Center (Sofia) 16 - 19 Nov 2005 Annually www.bulgarreklama.com
Salon De Vin (Wines, spirits and accessories for wine and spirits) Inter Expo Center (Sofia) 16 - 19 Nov 2005 Annually www.bulgarreklama.com
Meatmania (Meat products and delicacies) Inter Expo Center (Sofia) 16 - 19 Nov 2005 Annually www.bulgarreklama.com
WORTH
7. Useful contacts and links
Organization Phone Web site
Ministry of Agriculture and Forestry +359 2 985 11 255 www.mzgar.government.bg
National Agricultural Advisory Service +359 2 917 6068; +359 2 917 6070 www.naas.government.bg
Association of Bulgarian Agricultural Producers +359 2 873 2911 www.azpb.org
Food
Bulgarian Association of Food and Drink Industry +359 2 952 09 89 www.bafdi.com
Association of Meat Processing Enterprises in Bulgaria +359 2 540 193 www.amb.dir.bg
Federation of Bakers and Confectioners in Bulgaria +359 2 945 4519 www.fbcb-bg.org
Union of Sugar and Sugar Products Producers +359 2 248 969; +359 32 952 3756 www.usspp.com
Union of Canning Companies in Bulgaria +359 2 978 5456; +359 2 978 3314 www.canning.bafdi.com
Union of Vegetable Oil and Oil Products Producers in Bulgaria +359 2 989 2408; +359 2 989 9481 www.sunoil-bg.org
Beverages, beer, wine and spirits
Bulgarian Soft Drinks Association +359 2 983 2422; +359 2 983 2687 www.bsda-bg.org
Executive Agency on Vine and Wine +359 2 970 8111 www.eavw.com
National Vine and Wine Chamber +359 2 981 1674 www.bulgarianwines.org
Union of Brewers in Bulgaria +359 2 986 5090 www.bia-bg.com/bia/branch/brewers.htm
AgroWebBulgaria www.mzgar.government.bg/agroweb
Bulgarian Agribusiness Online www.bgagro.com
knowing
University of Food Technologies (Plovdiv) www.vihvp.bg
Majors (sector related)
Technology of beer and wine
Technology of grain, bread and fodder products
Technology of milk and milk products
Canning and refrigeration technology
Technology of meat, fish and eggs
Technology of tobacco and tobacco products
Technology of sugar, sugar products, starch and starch hydro isolates
Technology of vegetable and essential oils, perfumery and cosmetics
Biotechnology
Refrigeration and ventilation technologies
Analysis and control of food products
Technology of fermentation processes (in French)
Packaging and packaging technologies for the F&B industry and biotech
56
57
YOUR
MOVE
1. Why Bulgaria? 58
2. Latest deals 58
3. Precision Engineering Fact Sheet 59
4. Certification and accreditation 60
5. Competition and partners 60
5.1. Medical equipment 60
5.2. Electronics and electrical engineering 61
5.3. Mechanical engineering 61
5.4. Plastic and rubber parts 61
6. Worth knowing 62
6.1. Educated workforce 62
6.2. Sector-related exhibitions in Bulgaria 62
7. Useful contacts 62
8. Useful sites 62
TABLE contents of
Bulgaria:
Precision Engineering Sector
2006 InvestBulgaria Agency
WHYBulgaria?
1. 75% exports and robust technological innovation capability
2. Industry domains: electronics, automotive parts, military equipment, telecommunication equipment, consumer
electronics, plastics, medical equipment
3. Quality management systems applied – ISO 9001:2000, ISO/TS 16949:2002, ISO 14000
4. Highly-qualified and experienced work force currently of around 10,000 people with technical support capability
5. Competitive labor productivity; competitive labor cost
L ATESTdeals
Vendor Investor Target Size (EUR m)
Palfinger Produktionstechnik
Bulgaria (Cherven Brjag)
Palfinger (Austria) Construction and equipment of a new production building for sheet-metal working,
manufacturing of welded components for the assembly plants, production of crane
booms
10.2
Consilium Components Bulgaria Consilium and Swefund
International (Sweden)
Construction of a plant for automotive and marine components n.d.
Ericsson (Sweden) BTC 40% mobile network equipment supply n.d.
Local companies conclude a total of 50-60 commercial deals for armoury and other defense technologies for each two weeks
Currently, 26 manufacturers of military products operate in Bulgaria
structures and for partners
from EU and USA);
Basic processing “front-end” activities - production of microelectronic elements:
silicon structures with integral schemes or with integral sensors;
thin-layer and thick-layer hybrid integral structures and schemes;
micromodules, microsystems and silicon micromechanics;
framing of integral structures;
measurement and diagnostics of integral structures and schemes, of micromodules and microsystems;
surface assembly of elements on structures, including “plain” chips;
programming of integral structures and schemes;
electrical and thermal training and life-tests, and tests for electromagnetic compatibility.
Autoparts and mechanical engineering
Customers of Bulgarian autoparts manufacturers
Electronic modules and sensors Valeo and Delphi
Electronic sensors Electricfil
Hybrid integrated circuits Sauer-Danfoss
PCBs Mannesmann
Industrial control of conveyors Siemens
Plastic parts Rover
Hydraulic tooth pumps Magneti Marelli
Cable terminal lugs Tyco Electronics
Link bolts, Hoses Ford
Source: National Statistics Institute Source: National Statistics Institute Brackets Trelleborg Automotive - Coventry
Case studies
Melexis (Belguim) Daisy Technology (Bulgaria)
Subsidiary of Melexis N.V., Belgium since 2001
R&D – development of Intellectual Property, Household Applications and IR Sensors; tests
of sensor ICs
166 employees
Net sales of Melexis Bulgaria grew from € 2.7 to € 13.5 million for 4 years
Designing, manufacturing and implementation of systems with fiscal
memory since 1996
Leader in production of electronic cash registers and taximeters, electronic
scales, gas- and petrol stations equipment
Daisy Multimedia : design of digital video and digital sound products for
companies like Sagem and Texas Instruments
Export to Europe, Africa, Asia and the Near East
AREXIM Ltd (Bulgaria) AMI Semiconductor (USA)
Manufacturing of plastic products and components for the highly demanding fields of
electronics, healthcare and food industry, est. 1991
Products and services: Injection Moulding Workshop (plastic parts for electrical
engineering, components for refrigerators); Instrumental Equipment and Mould Workshop
(designing and production of moulds and instrumental equipment)
Quality management system approved by Lloyd’s Register Quality Assurance in
conformity with the following standards for quality management systems: ISO 9001:2000;
EN ISO 9001:2000; BS EN ISO 9001:2000
Clients: Schneider Electric Bulgaria, Liebherr-Hausgeraete, STS Holding Group, FESTO
Bulgaria, Vidima Ideal (a subsidiary of American Standard, Kraft Jacobs Suchard and
Hunter Douglas Europe – B.V., Holland
Expansion of US AMI Semiconductor through its Belgium HQ via a new
design center in Sofia since July 2004
Integrated Mixed-Signal products and Structured Digital products
developing and supporting
20 analogue, digital, physical and SW engineers in the laboratory
Analog/Mixed Signal experience available on the engineering market while
very difficult in the other countries
Structure of industrial engineering output, 2004 (EUR mln)
Total: EUR 3.8 bn
Electrical and
optical equipment
536
Auto parts and
vehicles
203
Basic metals and fabricated
metal products and tools
2158
Machinery
872
Exports of precision engineering, 2003 (EUR mln)
Total: EUR 904 mln
Electrical
equipment and
sound systems
348
Mechanical
appliance
424
Optical and
precision
eqipment
49
Marine equipment
43
Autoparts
40
59
Accreditation body
Executive Agency “Bulgarian Accreditation Service” (BAS) is the only national body for accreditation of:
testing laboratories and calibration laboratories;
product certification bodies, management systems certification bodies, personnel certification bodies;
inspection bodies;
verifiers
www.nab-bas.bg
Certifying organizations
АFAQ ASCERT International www.afaq.org
American Systems Registrar (ASR) www.asrworldwide.com
BVQI www.bvqi.com
DQS GmbH www.dqshellas.gr
Germanischer Lloyd Certification GmbH www.glc.de
Lloyd’s Register Quality Assurance www.lrqa.com
Moody International Ltd www.moody.bg
SGS www.sgs.com
TUV NORD CERT GmbH & Co.KG n.a.
TUV Rheinland Bulgarien GmbH www.tuv-rheinland.bg
United Registrar of Systems Ltd. www.urs-bg.com
COMPETITION AND partners
CERTIFICATION AND accreditation
Quality management certification regulations applied in the sector:
quality management system ISO 9001:2000 (acquired by a total of 1,681 Bulgarian companies);
technical standards for suppliers to the automotive industry ISO/TS 16949:2002;
environmental management systems ISO 14000.
5.1. Medical equipment
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Momina Krepost (Veliko Tarnovo) Medical devices for single use 3,016 205 2004
2 Etropal (Etropole) Medical devices for single use 2,695 246 2004
3 Berchtold Bulgaria (Sofia) Manufacture of medical electronics, lathed and cut parts for surgical lamps and
tables and autonomous gas installations
1,768 44 2004
4 Art Colenta Bulgaria (Sofia) Medical equipment 1,327 36 2004
5 Medical Equipment (Sofia) Medical, pharmaceutical, dental and physiotherapeutic equipment, hospital
furniture
905 298 2004
6 Centillion (Sofia) Medical equipment 844 31 2004
7 Optela - Optic Technologies (Plovdiv) Industrial CO2 lasers systems and laser optics 508 107 2004
8 Gama Proekt JSC (Gabrovo) Manufactures surgery and reanimation equipment, dental equipment,
instruments
358 186 2003
9 Intergalenika (Plovdiv) Medical devices (Concentrates for hemodialysis) 179 14 2003
10 Optica Laser (Sofia) Manufacture of laser systems for surgery, dentistry and physiotherapy 137 11 2002
60
5.2. Electronics and electrical engineering
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Ericsson Telecommunications Telecom equipment 27,255 35 2003
2 Liebherr - Hausgerate Maritsa (Radinovo) Production of refrigerators and freezers 25,911 300 2002
3 Elkabel (Bourgas) Production of power cables 21,927 371 2004
4 Datecs (Sofia) Design and production of hardware and cash registers 20,068 216 2004
5 EPIQ Electronic Assembly (Botevgrad) Electronic assembly, module assembly, development and manufacture of plastic
injection moulds & factory automation equipment
14,130 991 2001
6 Melexis (Sofia) Development, production, testing and sale of integral schemes and systems 13,415 166 2004
7 Electron Progress (Sofia) Electronic equipment and instruments, radiolocation stations, military and
telecom equipment
12,644 120 2004
8 FESTO Production (Sofia) Production of proximity sensors and accessories, plugs and pre-assembled
cables
12,082 205 2004
9 Svetlina (Sliven) Production of electric automobile lamps, electrical lamps for general lighting,
halogen lamps, fluorescent lamps, quartz wares
11,502 250 2004
10 Elprom - EMS (Sofia) Manufacture of small electric engines, brakes 6,215 580 2004
11 Samel 90 (Samokov) R&D and production of electronic military equipment, radar systems 8,560 400 2004
12 ABB Avangard (Sevlievo) Manufacturing of electrical machinery and apparatus: high voltage switches, el.
plants and generators
8,300 300 2003
13 DZU (Stara Zagora) Disk Storage Devices 6,319 950 2004
14 Daisy Technology (Sofia) Design, manufacturing and implementation of systems with fiscal memory 3,903 82 2004
15 Teletek Electronics (Sofia) Accessories – dialers, power supplies, RC modules manufacturing 3,784 64 2004
16 Multiprocessor Systems (Sofia) Residential Electronic Single Phase Energy Meters, 3-Phase Energy Meters 3,614 91 2004
17 Opticoelectron Group (Panaguriste) Optic-mechanical and optic-electronic devices and systems for special military
purposes and civil use
3,297 n.a. 2004
18 Deltacom Electronics (Sofia) Broadband communications industry R&D and manufacturing 2,997 96 2004
19 SET (Steiner Elektronik Technologie
GmbH) (Rousse)
Design, engineering, production of electronic products 1,960 300 2001
20 Arkomat (Kazanlak) Electrical cables for automobiles 1,710 684 2001
21 Hybrid Integral Schemes (Sofia) Manufacture of hybrid IC’s, resistor networks, high-voltage resistors, PCB assemblies,
electro-luminous lamps
1,182 121 2004
22 AMI Semiconductors (Sofia) Design center for mixed-signal integrated circuits for automotive, industrial and
consumer applications
n.a. 20 2005
5.3. Mechanical engineering
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Sparky-Eltos (Lovetch) Production of electric tools, drilling machines, angle-grinding machines, circular
saws, milling machines, eccentric grinding machines, engines for electric tools
21,852 1,305 2004
2 Palfinger Productionstechnik Bulgaria
(Tcherven bryag)
Production of hydraulic lifting, loading and handling systems – cranes, forklifts,
hook loaders
18,617 270 2004
3 SKF Bearings-Bulgaria (Sofia) Production of bearings 6,922 1,097 2004
4 VAMO Manufacturing of engines, engine components, spare parts and technological
equipment
5,063 143 2004
5 Balkan (Lovech) Production of transmission and bridges for battery-powered trucks; hydrodynamic
transmissions
4,470 410 2004
6 Madara (Shoumen) Production of trucks, front and rear driving axles for trucks, buses, trolley buses
and road building machines, gears and shafts, steel castings and forgings
4,340 530 2004
7 Drouzhba (Razgrad) Production of pistons for internal-combustion engines 4,020 402 2004
8 Lifton Development and production of hydraulic breakers, hydraulic power packs &
other hydraulic power-tools
3,705 121 2004
9 Alucom (Pleven) Manufacturing of truck and automobile wheel rims, radiators, aluminium castings 1,500 200 2003
10 Kuhn Technologies (Radomir) Tool & dies making, structural parts for car body and car seats and their assembly 138 100 2004
5.4. Plastic and rubber parts
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 Assenova krepost (Assenovgrad) Production of PP and PE packaging 22,331 1,223 2004
2 Kapitan Dyado Nikola (Gabrovo) Production of PVC, PE and PP water and sewer systems pipes and fittings 15,359 460 2004
3 Kauchuk (Pazardjik) Production of conveyor belts, rubber-textile hoses, technical rubber goods 11,878 843 2004
4 ITD (Saedinenie) Production of moulds, performs, plastic bottles, vials and caps 7,484 138 2004
5 Kula Ring (Kula) Production of rubber articles - belt conveyors, gaskets, profiles, pads, etc 2,873 205 2003
6 Arexim (Smoljan) Production of plastic parts 2,773 96 2003
7 Bunay (Panagiurishte) Details of plastics, bakelite and rubber with injection, press moulding, extrusion,
back pressure injection
2,436 236 2003
61
6.1. Educated workforce
University / College Location Majors (sector related)
Technical University Sofia
www.tu-sofia.bg
Sofia Automatics; Electronic Engineering and Technology; Electrical Engineering; Power Engineering and
Power Machines; Mechanical Engineering; Machine Technology; Semiconductor and Microelectronic
Elements Design and Technology; Transport Machinery and Technologies, etc.
University of Mining and Geology
www.mgu.bg
Sofia Automation, information and controlling equipment; Electric energy and electricity supply
University of Architecture, Civil Engineering and Geodesy
www.uacg.bg
Sofia Structural Engineering, Hydraulic Engineering, Transportation Engineering
Plovdiv branch of Sofia Technical University
www.tu-plovdiv.bg
Plovdiv Electronics and Medical Instruments Engineering, Electronic Control Devices, Digital Handling of Information,
Power Electronics, Optoelectronics and Laser Engineering, Optical and Mobile Communications,
Automation, Information and Control Systems, Electrical Engineering, etc.
Varna Technical University
www.tu-varna.acad.bg
Varna Electronic Engineering and Microelectronics, Radio Engineering, Communication Engineering, Electrical
engineering and electrical technologies, Automation of manufacturing - Digital Signal Processing,
Technology of machine engineering and metal cutting machines
Gabrovo Technical University
www.tugab.bg
Gabrovo Automation, information and control systems, Communication equipment and technologies, Electronics,
Equipment and technologies for environment protection, Hydraulic and pneumatic engineering, Industrial
engineering, Mechanical and precision engineering, mechanical engineering equipment and technologies,
etc.
South-West University
www.swu.bg
Blagoevgrad Machine Building and Textile Technologies and Technologies, Electronics and Communication Technologies
and Technologies
Rousse University
www.ru.acad.bg
Rousse Machine Tools & Manufacturing, Technical Mechanics, Electrical Power Supply and Equipment, Electronic
technique and technologies, Automation of production
Bourgas Free University
www.bfu.bg
Bourgas Communication Engineering and Computer Networks, Computer Systems and Technologies, Electric Power
Supply and Distribution, Industrial Management, Technology and Management of Transport
6.2. Sector-related exhibitions and conferences
Exhibition Name Location Dates Frequency For more info
ELTECH (International Exhibition of Electronics
and Electrical Engineering)
Plovdiv September Annually www.fair.bg
International Technical Fair Plovdiv September Annually www.fair.bg
INFOTECH
(International Exhibition of Information Technologies)
Plovdiv September Annually www.fair.bg
7. Useful contacts
Organization Phone Web site
Bulgarian Branch Association of Electronic Industry and Informatics (+359 2) 9718330 n.a.
Bulgarian National Chamber Of Electrical Engineering (BNCEE) (+359 2) 963 35 32 www.bcee-bg.org
Bulgarian Branch Chamber for Machine Building (+359 2) 988 40 44 www.bbcmb.org
8. Useful sites
Organization Web site
Bulgarian Academy of Science www.bas.bg
Academician Emil Djakov Institute of Electronics www.ie-bas.dir.bg
WORTH knowing
Vocational technical colleges in Bulgaria
(4-5 years of education)
( mechanical engineering, electrical engineering, electronics)
Technical universities
Bregovo
Boinitza
Kula
Vidin
Gramada
Makresh
Dimovo
Belogradchik
Chuprene
Ruzhentzi
Lom
Brusartzi
Medkovez
Yakimovo
Valchedrum
Kozlodui
Novo Selo
Boichinovtzi
Chiprovtzi
Georgi
Damianovo
Montana
Silistra
Ruse
Berkovitza
Varshetz
Krivodol
Vratza
Mezdra
Svoge
Godech
Kostinbrod
Dragoman
The city of
Sofia
Botevgrad
Pravetz
Slivnitza Etropole
Trun Bojurishte
Breznik
Pernik
Radomir
Trekliano
Zemen
Kovachevtzi
Dolna
Bania
Samokov
Belovo
Ihtiman
Kostenetz
Elin Pelin
Gorna
Malina
Kyustendil
Bobov
Dol
Nevestino
Dupnitza
Sapareva
Banya
Boboshevo
Kocherinovo Rila
Blagoevgrad
Simitly
Kresna
Strumyane
Petrich
Sandanski
Razlog
Bansko
Goze
Delchev
Hadjidimovo
Garmen
Satovcha
Yakoruda
Belitza
Velingrad
Lesichevo
Septemvri
Rakitovo
Panagyurishte
Pazardjik
Strelcha
Batak
Bratzigovo
Peshtera
Devin
Borino
Dospat
Lukovit
Ugarchin
Teteven
Roman
Yablanitza
Sofia region
Pleven
Lovech
Gabrovo
Veliko
Tarnovo
Dobrich region
Dobrich
Varna
Shumen
Plovdiv
Burgas
Sliven
Yambol
Tundja
Stara Zagora
Haskovo
Kurdjali
Smolyan
Mizia
Byala
Slatina
Borovan
Hairedin
Oryahovo Guliantzi
Dolna
Mitropolia
Dolnu
Dabnik
Cherven
Bryag
Iskar
Kneja
Nikopol
Levski
Pordim
Belene
Letnitza
Troyan
Apriltzi
Dryanovo
Tryavna
Sevlievo
Svishtov
Pavlikeni
Suhindol
Gorna
Oryahovitza
Lyaskovetz
Zlataritza
Elena
Ivanovo Vyatovo
Tzenovo Dve
Mogili
Borovo
Byala
Slivo
Pole
Chepelare
Banite
Madan
Rudozem
Laki
Zlatograd
Nedelino
Chernoochene
Ardino
Djebel
Momchilgrad
Kirkovo
Krumovgrad
Dimitrovgrad
Parvomai
Mineralni
bani
Simeonovgrad
Stambolovo
Harmanli
Lyubimetz
Madjarovo
Svilengrad
Topolovgrad
Ivailovgrad
Maritza
Sadovo
Rakovski
Asenovgrad
Kuklen
Rodopi
Krichim
Perushtitza
Saedinenie
Hisarya
Kaloyanovo
Brezovo
Karlovo
Pavel
Bnya
Kazanluk
Maglij
Bratya
Daskalovi
Chirpan
Radnevo
Opan
Galabovo
Nova
Zagora
Tvarditza
Kotel
Razgrad
Kubrat
Zavet
Isperih
Samuil
Loznitza
Tzar Kaloyan
Tutrakan
Glavinitza
Dulovo
Sitovo
Alfatar
Koinardja
Krushari
General
Toshevo
Tervel
Balchik
Kavarna
Shabla
Bulchi Dol
Suvorovo Aksakovo
Vetrino
Devnya
Beloslav
Avren
Dolni Chiflik
Byala
Provadia
Dalgopol
Smyadovo
Varbitza
Veliki
Preslav
Kaolinovo
Nikola
Kozlevo
Novi
Pazar
Kaspichan
Venetz
Hitrino
Targovishte
Opaka
Popovo
Antonovo
Omurtag
Polski
Trambesh
Strajitza
Sungurlare
Ruen
Karnobat
Aitos
Nesebar
Pomorie
Kameno
Sredetz Sozopol
Primorsko
Malko
Bolyarovo Tarnovo Tzarevo
Elhovo
Straldja
Antonovo
Koprivshtitza
Pirdopo
Zlatitza
Chelopech
Mirkovo
Chavdar
Gurkovo
5 Nikolaevo
1
2
3
1
1
1
2
1
62
63
1. Why Bulgaria? 2
2. Latest deals 2
3. ICT and BPO Fact Sheet 2
4. Legal 4
4.1. Overview of ICT sector related regulations 4
4.2. License for CD producers 5
4.3. Providers of certifying services 5
5. Competition and partners 6
5.1. Software companies 6
5.2. IT companies 6
5.3. Telecom/Internet companies 7
5.4. BPO providers 7
6. Worth knowing 7
6.1. Educated workforce 7
6.2. Sector-related exhibitions in Bulgaria 8
7. Useful contacts 8
8. Useful sites 8
TABLE contents of
YOUR
MOVE
Bulgaria:
ICT and Business Process Outsourcing (BPO) Sector
2006 InvestBulgaria Agency
WHYBulgaria?
1. Opportunities for long term partnerships for joint development of sophisticated products and solutions
2. Maturity and robust growth of the sector
3. Small, flexible and innovative teams, performing efficiently boutique-type projects in challenging fields
4. Large talent pool and traditions in a broad range industry domains
5. Competitive cost efficiency models and 100% success project delivery
6. Superb language skills and work culture
L ATESTdeals
Vendor Investor Target Size (EUR m)
Mobiltel Telekom Austria Takeover from a group of Austrian investors 1600
Mobiltel Telekom Austria Development of the high-speed, third generation (3G) mobile network 300
Vivatel BTC Mobile unit network of BTC 110
Vestitel Overgas A fibre-optic telecommunications line Bulgaria-Greece 8
Hewlett-Packard Government Development of Integrated Public Health Software System 6.7
Government auction Transtelecom License A Wireless network permit 2.5
Government auction Cablenet License A Wireless network permit 2.5
N/A CableTel in JV with Cable Partners Europe Acquisitions of Bulgarian cable TV and Internet providers 80-100
Recording Haskovo CableTel Takeover n.a.
ICT AND BPO Fact Sheet
ICT
About ICT in Bulgaria
Over 4 000 actively operating ICT companies
Telecom sector: 1st place in revenues, 5th in profits in the country
Growth in the IT sector will continue on an upward trajectory through 2009
IT market is growing at a rate of 12.4% and will reach EUR 460 m by 2009
Overall IT market in South East Europe will grow at 10.4% CAGR by 2009
Software spending today represents 16% of the total IT spending market in Bulgaria
Bulgarian software market (2004: EUR 44 m) registered 14,1% growth for 2004
Software R&D accounting for EUR 17.3 m (growth of 3.6% YoY), 70% of the production
is exported
System integration in 2004 reached 30.7% YoY growth; 2004 revenues in this domain are EUR 70 m
ICT market, total sales, EUR million
231 278 320
1098
1239
1329 1371
1517
1691
0
400
800
2002 2003 2004
1200
1600
2000
IT Market Telecom Total ICT market
64
Salaries in the Bulgarian ICT sector by position, 2004
Position Average monthly salary,
2004
IT Director €840
IT Manager /International Company/ €710
Developer /International Company/ €600
Network Engineer €500
System Administrator /International Company/ €450
IT Manager /Bulgarian Company/ €400
Web Specialist €250
Source: Computerworld Bulgaria 2005
Talent pool
Between 2004 and 2009, the IT sector
will generate almost 7,900 new jobs and
$42 million in tax revenues
More than 42% of all IT employees in
Bulgaria are engaged in developing,
distributing, and servicing software – for
external customers or internal corporate
users – and half of all IT tax revenues
come from the software-related sector
Contact center large employment
pool and 50% cost cutting, providing
opportunities both in IT and non-IT
services
Case studies
Software companies expertise Nemetschek Bulgaria
Industry domains:
Aerospace and Defense; Network Management Appliances; Mobile;
CAD/CAM3D Virtual Reality, Modeling and Animation; Banking and
Financials; Construction and Facility Management; Electronic Document
Management; CRM, E-procurement, Auctions and Tenders; Supply
Chain Management; Retail; Entertainment; Design of microelectronics;
Telecommunications
Some specific products and technologies:
Client-server, web-based and desktop solutions; Symbian
OS software development; Portal sites; ISP business process
automation; Content management for 3G mobile devices; E-book
preparation; Online games
Reference clients:
ATI Systems, KFM Inc, Credit Suisse, Goldman Sachs, Nortel Networks,
Lockheed Martin, BMW, Siemens, Danone, Euro RSCG, Raritan,
A.T.Kearney, AOL Time Warner, Ford Group, Marconi, Westbridge
Technologies, IBM, Boeing, General Motors, Bedford, Freeman & Worth
Publishing Group LLC, Columbia University, Discovery Communications
Inc, Intel Corp, SAS Institute, National Museum of American Art
(Smithsonian Institution),Times Publishing Pty Ltd, ADC, General Hybrid,
PairGain Technologies Inc, Sauer Danfoss Inc, Bach-Harrison Ltd,
FingerPring Checks, Parker International, IBM, etc.
One of the leading software development companies, providing high-end solutions in the
area of software development, marketing and implementation, ranked as one of the most
efficient software development companies in Bulgaria for Y2004.
First management buyout in Bulgaria; ownership structure: 60% GB Soft Ltd (BG), 20%
Nemetschek AG (GER), 20% DocuWare AG (GER)
Own products:
FM Center – enterprise software solution for facility management
Customer Center – enterprise software solution for customer relationship management
Supply Center – enterprise software solution for supply chain management
Print Center – software solution for digital printing centers
Markets: Western Europe, Central Europe, South-East Europe, USA, Middle East
Datecs Ltd
Founded in 1990, Datecs is a technology company in the hardware production and software
development fields
Created the first professional program for complete Cyrillic support under MS Windows – the
Flex Type – in 1992
In cooperation with Samsung, Datecs designs and produces cash registers. Over 100,000
units has been sold in the last few years making the Datecs brand one of the best known in
Central and Eastern Europe
Recently the range of company products and services has expanded, adding Electronic
Scales, Retail POS printers, GIS & Mapping Services, Palm Development and Portable
Cash Registers
Employees 2004: 200 people
ICT Market Growth in Bulgaria
20.4
14.8
11
12.5
7.4
12.8
10.7 11.5
8.4
11.5
14.1 11.4
0
5
10
15
20
25
2002/2003 2003/2004 2004/2005 2005/2006
IT Telecom ICT
IT Hardware Other Services & Channels
Other IT Professionals Total Software Employees
Total IT Employees
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36
2004
2005
2006
2007
2008
2009
Year
Employees (in ‘000)
Contact center & help desk agents
growth in Bulgaria
0
1000
2000
3000
4000
5000
6000
Oct-00
Apr-02
Oct-03
Apr-05
Aug-05
Dec-05
Apr-06
Sep-06
Jan-07
Source: IDC
65
Legal
Overview of ICT sector related regulations
The Council of Ministers has identified the development of communications and high-technologies as one of the pillars of sustainable economic development. ICT investment should be
viewed as a factor stimulating investment in other fields and it is considered to be a major engine of economic growth. Forthcoming EU membership of the country (planned for 2007)
has provided for a modern ICT regulatory framework and liberal regime following the EU requirements with the following brief milestones:
Participation in WTO (WTO` Information Technology Agreement) (since 2002):
removed major tariff barriers to information technology products apart form VAT
on imports and domestic products, which is levied in accordance to the VAT Act
(adopted in 1998) at the standard VAT rate of 20%;
Zero rate of VAT applies to export of software: within the meaning of the VAT
Act “export of software” is the transfer of rights over software when the place of
execution is out of the territory of the country and the implemented export has
been paid by the customer in full amount and received in a local bank;
VAT legislation follows the provisions of the Sixth Council Directive 77/388/EEC on
the common system of VAT and the uniform basis for its assessment;
Currently, the Internet market is not formally regulated and does not require
licensing or registration, which has led to a dynamic expansion of Internet service
providers and great reduction of prices;
A licensing regime is provided for producers of CDs that reproduce objects
protected by copyright (including software); (terms and procedures for licensing are
laid down in Law of the administrative regulation of the production and trade with
optic discs, matrices and other carriers containing subjects of copyright and the
related to it rights (In force from 15. 10. 2005/ Prom. SG. 74/13 Sep 2005);
The Electronic Document and Electronic Signature Act (EDESA), adopted in March
2001, follows the principles of The EU Directive 1999/93/EC on a Community
Framework for Electronic Signatures: the law envisages the application of
e-signatures not only in the area of private obligations and contracts, but also in the
pubic sector (state administration) and in the field of administrative law;
Registration regime for certification service providers: entities authorized to issue
electronic signature certificates, maintaining a public electronic registry for them,
and providing access to third parties to the published certificates; (the registration
procedure is performed before the Communication Regulation Commission, which
is the state authority to regulate and control the provision of certification services);
Public Information Act, enacted in July 2000, sets forth the principle of free and
unlimited access to public information, specifying the procedures for obtaining such
information as well as the authorities, responsible for its provision;
In 2001, Personal Data Protection Act was adopted, following the requirements of
the EU Directive on Data Protection: the law provides a general framework for the
collection, processing and transmission of personally identifiable information;
Bulgarian Criminal Code, adopted in 2002, incriminates the major computer related
offences as unwarranted access to the resources of the computer, introducing a
computer virus into the network, unlawful destroying or damaging of a computer
program, etc.; the provided penalties vary from fines to imprisonment depending on
the consequences of the crime;
Draft law for the electronic commerce, approved on a first reading by the
Parliament, follows the main principles of EU legislation in the field; the draft shall
settle the obligations of the information providers related with e-services; the latter
shall be obligated to provide access to the general terms and the full content of the
e-contracts, specific rules about the moment when the transaction is considered
to be made and the moment when the confirmation has been received; specific
chapter in the draft defines the applicable law in case of providing services on the
territory of Bulgaria by foreign providers;
Protection of intellectual property: the country is a party to all major treaties,
conventions and agreements, administrated by the World Intellectual Property
Organization;
Computer programs are explicitly defined as a subject of copyright protection
under the Copyright and Related Rights Act, adopted in 1993: detailed regulations,
regarding the copyright protection, prevention of the production, distribution,
export and import of musical, audio-visual and software products; according to
the law any person who infringes copyright or a related right to copyright is liable
to compensation for the damages incurred to the person to whom the exclusive
copyright has been granted;
Telecommunications Act (Prom. SG 88/ 7.10.2003: defines the terms
“telecommunication” and “telecommunication activity” and specifies the regimes
for operation of the telecommunication operators; the law aims at liberalizing of the
telecommunication services, setting up the free market therefore and preventing
the unfair competition;
Competent authorities exercising powers in the field of telecommunications are:
the Council of Ministers, the Minister of Transport and Communications and the
Commission for Regulation of Communications (CRC); CRC is an independent
specialized state authority that implements the sector policy by regulating and
supervising the telecommunication services and activities;
According to the Telecommunications Act, the telecommunication operators perform
their activities on the basis of three different regimes: the general legal framework for
issuance of licenses for telecommunication activities performance follows the European
Union regulatory framework outlined by the Council Directive 97/13/EC of 10 April 1997
on a common framework for general authorizations and individual licenses in the field of
telecommunications services; the activities on performing telecommunication services
are realized after issuance of an individual license, general license or free, depending
on whether limited resources are used by the operator;
Telecommunication services prices are freely determined by the telecommunication
operators according to the demand and supply on the local market and providing
equality of users;
Prices of the services provided by the operators who have established dominating
position on the market as well as of the services for which it is established that they
are provided by abusing the dominating position or unfair competition in the context
of Bulgarian protection of competition legislation are regulated by the CRC; the
regulation is performed through determining the price limits, rules and principles for
price formation and specific prices for a period of six months to one year;
The Government approves issuing licenses for establishment of telecommunication
networks and delivery of public telecommunication services by using the radio
frequency spectrum upon a proposal of the CRC;
The Council of Ministers approves a National plan for assignment of radio
frequencies upon a proposal of the Council on the National Radio Frequency
Spectrum.
66
4.1. License for CD producers
Competent authority Minister of Economy and Energy
Web-site www.mee.government.bg
Contact (phone, fax, e-mail) tel. +359 2 940 7008; fax.+359 2 981 5041
Purpose Obtaining of license for CD production
Requirements and conditions 1. Original or notary certified copy of court certificate of good standing, issued not later than two months before submission of the application;
2. Original or notary certified copy of certificate of tax registration, certificate form the territorial tax directorate, proving the absence of fiscal
obligations and affidavit by the person for lack of other public obligations;
3. Notary certified copy of BULSTAT identification card (or court reference for natural persons who represent the applicant) as per court registration
and a certificate by the investigation authorities for lack of initiated pre-trial proceedings against him/her;
4. Documents certifying the ownership or the right of usage of the planned installed capacities for production of optic discs;
5. Reference regarding the manufacturing capacity, containing the technological scheme of production, producer’s name, mark, model, manufacturing
number (all the machines and devices, including the peripheral shall be described), as well as the technical data of the equipment,
including the production capacity, rate of consumption and data about the technological rejects as per technological documentation;
6. Business plan of the activity;
7. Certificate of registration for obtained source identification code (SID-code);
8. Notary certified copy of contract for rent or notary deed of ownership, accompanied by a plan or another certifying document of the location
of the manufacturing, storage and service premises in the property, where the manufacturing optic discs or matrices facilities are located;
9. Reference about the available quantities of staple for production of optic discs or matrices or about the available ready production to the date
of submission of the application;
10. Documents of the customs proceedings for the imported equipment;
11. Notary certified affidavit by the persons under item 4 that they have not been sanctioned during the year before submission of the application
by an enforced punitive decree for a breach under this law and that they are not related persons in the meaning of the Commercial Law to
a person to which the license has been deprived or the issue of a license has been refused;
12. Affidavit that the production powers under item 5 are installed;
13. Document of paid fee for consideration of the application.
Time frame 3 months
Costs (Fees) BGN 5000
Legal grounds
(Laws and Regulations)
Copyright and Related Rights Law (OG. 56/ 29 Jan 1993)
Law of the administrative regulation of the production and trade with optic discs, matrixes and other carriers containing subjects of copyright
and the related to it rights (In force from 15. 10. 2005, Prom. SG. 74/13 Sep 2005)
4.2. Providers of certifying services
Competent authority Communications Regulation Commission
Web-site www.crc.bg
Contact (phone, fax, e-mail) tel. +359 2 9492141; e-mail: vavassilev@crc.bg
Purpose Registration of certifying services providers.
Requirements and conditions Required documents:
1. Application
name, headquarters and address of the applicant;
number in the National Tax Register and BULSTAT identification code;
description of the services that will be provided;
request for issuance of a certificate for registration.
2. Document for establishment of the company or a certificate for current court registration;
3. Copy of an insurance policy for covering the damages caused by non-fulfillment of obligations under the Electronic Document and the
Electronic Signature Law;
4. Terms for issuance of signature certificates, including the rules for determining the identity of the universal electronic signature holder;
5. Description of the security procedures that occur during the issuance and using of the universal electronic signature;
6. The conditions and the order of using the universal electronic signature, including the requirements for storage of the private key;
7. Price list of all services offered by the provider;
8. Declarations that confirm fulfillment of the requirements under the Electronic Document and the Electronic Signature Law;
10. Copy of a document for paid state tax.
Time frame 1 month
Costs (Fees) BGN 15 100
Legal grounds
(Laws and Regulations)
Electronic Document and the Electronic Signature Law (OG 34/ 6.04.2001)
Ordinance for Order of Registration of the Providers of Certifying Services (OG 15/ 8.02.2002)
Tariff for the taxes collected by the Communications Regulation Commission (OG 31/ 16.04.2004)
67
COMPETITION AND partners
5.1. Software companies
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 SAP Labs and SAP Bulgaria Developing leading-edge J2EE Application Server 8,020 270 2004
2 Multiprocessor Systems Development of high-performance array processors & related application software 3,614 91 2004
3 ASCIOR Hardware, software, system integration 2,560 53 2004
4 Fadata Software design 2,419 85 2004
5 RILA Solutions Software design 1,872 43 2004
6 SIRMA AI Software, system integration 1,061 65 2004
7 Sciant Software design and solutions 870 108 2004
8 Nemetschek Bulgaria Software design and solutions 763 37 2004
9 Interconsult Bulgaria Software design and solutions 447 55 2004
10 Bianor Software design and solutions N.D. 40 2004
11 Haemimont Games Software design N.D. 40 2004
12 Tumbleweed Software development N.A. 70 2005
13 Webgate Software design and solutions N.D. 16 2004
14 Musala Soft Software design and solutions N.D. 30 2004
5.2. IT companies
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 MOST Computers Distribution and assembly 30,559 130 2004
2 Prosoft Hardware, software, system integration 21,783 n.d. 2004
3 Datecs Design and production of hardware 20,506 216 2004
4 STEMO Hardware, software, system integration 20,381 183 2004
5 CNSYS Hardware, software, system integration 17,944 101 2004
6 Siemens Information & Communication Operational equipment supply 17,361 n.d. 2004
7 Motorola Telecom equipment supply 11,423 8 2004
8 Information Services Plc Software, system integration 11,386 841 2004
9 Hewlett-Packard Hardware, software, system integration 6,556 60 2004
10 Paraflow Communications System integration 6,374 56 2004
11 Microsoft Hardware, software, system integration 3,330 50 2004
12 Daisy Multimedia Manufacturing of Mp3, digital cameras, etc. 2,413 23 2004
13 Siemens Business Services System integration 1,498 n.d. 2004
14 Cisco Systems Hardware, software, system integration 1,192 n.d. 2004
15 Unisys System integration 530 22 2004
68
6.1. Educated workforce
5.3. Telecoms/Internet companies
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 BTC Fixed telephony 533,428 17418 2004
2 Mobikom (BTC) Telecom services 18,803 n.d. 2004
3 BTC Net ISP 6,813 n.d. 2004
4 MobilTel (Telecom Austria) Mobile 486,300 n.a. 2004
5 Globul (Cosmo Mobile) Mobile 177,486 718 2004
6 TeleLink Operational equipment supply 19,343 125 2004
7 Orbitel Telephone and ISP 9,319 137 2004
8 CableTel ISP 7,602 384 2004
9 Spectrum Net Pls&Prolink Telephone and ISP 4,851 n.d. 2004
10 Eurotur SAT TV Telephone and ISP 4,424 253 2004
11 NEXCOM ISP 3,517 165 2004
12 Neterra ISP 2,235 50 2004
5.4. BPO providers
Company Activity
Net sales
(EUR ‘000)
Number of
employees
Year
1 IMRO (Belgium) Offshored contact center n.d. 450 2005
2 ES-Team (Object Builder Software)
(Bulgaria)
Software development; contact center and insurance
back-office processing
1735 350 2004
3 TaxBack (Ireland) Offshored tax refund service support n.d. 250 2004
4 AII Data Processing (Bulgaria) Information indexing and news writing; own business information products and
service
n.d. 233 2004
5 Coca Cola HBC IT support shared service center n.d. 80 2005
6 BTC (MoneyGram) In-house call center and MoneyGram shared service center n.d. 60 2005
7 APlus (USA) Offshored US multi tier technical support and sales n.d. 60 2005
8 Sofica (Bulgaria) Contact center and IT help desk n.d. 40 2005
9 Call Center BG (Bulgaria) Call center, information services and telemarketing n.d. n.a. 2005
10 Balkan Data (USA) Data processing and conversion, content management n.d. n.a. 2005
11 Inline (Bulgaria) Contact Center, direct marketing services n.d. n.a. 2005
12 Experian – Scorex (UK) Offshored credit bureau databases and credit bureau scoring n.d. n.a. 2005
Source of companies’ data - ComputerWorld Top 100 2004 and Bulgarian Industrial Association
WORTH knowing
69
University / College Location Majors (sector related)
U1 Sofia University, Faculty of Mathematics and Informatics
http://www-it.fmi.uni-sofia.bg/
Sofia BCs Mathematics
BCs Computer Sciences
BCs Mathematics and Computer Sciences
BCs Applied Mathematics
MSc Distributed Systems & Mobile Technologies
MSc E-learning
MSc Artificial Intelligence
MSc Information and Communication Technologies
MSc Management Information Systems
U2 Technical University Sofia
www.tu-sofia.bg
Sofia BCs/MCs Electronics
BCs/MCs Telecommunication Techniques and Technologies
BCs/MCs Computer Systems
BCs/MCs Industry Automation and Information Systems
U3 University of National and World Economy
www.unwe.acad.bg
Sofia BCs/MCs Information Technology & Computer Systems
U4 New Bulgarian University
www.nbu.bg
Sofia BCs/MCs Information Technology & Computer Systems
BCs/MCs Communication Technologies
U5 American University in Bulgaria (AUBG)
www.aubg.bg
Blagoevgrad Computer Science Program
Mathematics
U6 Plovdiv branch of Technical University Sofia
www.tu-plovdiv.bg
Plovdiv BCs/MCs Information Technology & Computer Systems
BCs/MCs Communication Technologies
U7 Plovdiv University
www.pu.acad.bg
Plovdiv BCs/MCs Information Technology & Computer Systems
BCs/MCs Communication Technologies
BCs/MCs Mathematics
U8 Varna Technical University
www.tu-varna.acad.bg
Varna BCs/MCs Information Technology & Computer Systems
BCs/MCs Communication Technologies
U9 Varna Free University
www.vfu.bg
Varna BCs/MCs Information Technology & Computer Systems
U10 University of Economics
www.ue-varna.bg
Varna BCs/MCs Information Technology & Computer Systems
U11 Gabrovo Technical University
www.tugab.bg
Gabrovo BCs/MCs Information Technology & Computer Systems
U12 South-West University
www.swu.bg
Blagoevgrad BCs/MCs Information Technology & Computer Systems
U13 Rousse University
www.ru.acad.bg
Rousse BCs/MCs Information Technology & Computer Systems
BCs/MCs Communication Technologies
U14 Bourgas Free University
www.bfu.bg
Bourgas BCs/MCs Information Technology & Computer Systems
BCs/MCs Communication Technologies
U15 University of Veliko Turnovo
www.uni-vt.bg
Veliko Turnovo BCs/MCs Information Technology & Computer Systems
U16 Shumen University
www.cdo-shu.liternet.bg
Shumen BCs/MCs Information Technology & Computer Systems
165 CISCO Academies Countrywide BCs/MCs Information Technology & Computer Systems
6.2. Sector-related exhibitions and conferences attended by Bulgarian ICT business
Exhibition Name Location Dates Frequency For more info
ICT Investment Roundtable Sofia March/April Annual www.ictalent.org
BAIT EXPO Sofia November Annual www.bait.bg
SYSTEMS Munich October Annual www.systems-world.de
CeBIT Hannover March Annual www.cebit.de
3GSM World Congress n.a. February Annual www.3gsmworldcongress.com
INFOTECH
(International Exhibition of Information Technologies)
Plovdiv September Annual www.fair.bg
Specialized Software Exhibition PC WORLD Plovdiv September Annual www.fair.bg
Science & Education EXPO “The Bulgarian Universities and Technological
Incubators – a Center for Innovative ICT Developments”
Plovdiv September Annual www.fair.bg
7. Useful contacts
Organization Phone Web site
Bulgarian ICT Cluster (+359 2) 976 9744 www.ictalent.org
Bulgarian Association of Software Companies (BASSCOM) (+359 2) 976 9743 www.basscom.org
European Software Institute (ESI) Center Bulgaria (+359 2) 976 9740 www.esicenter.bg
Bulgarian Association of Information Technologies (BAIT) (+359 2) 946 1513 www.bait.bg
Business Software Alliance www.bsabg.org
Center for Law of The Information and Communication Technologies (CLICT) (+359 2) 9878641 www.clict.lex.bg
Society for Electronic Communications (SEC) (+359 2) 9 657 657 www.bina.bg
Telecommunications Association (ASTEL) (+359 2) 980 29 19 www.astel-bg.com
The Bulgarian Business-to-Business Exchange for Software Development www.bgitexchange.com
8. Useful sites
Organization Web site
Computerworld Electronic Newspaper www.computerworld.bg
IDG www.idg.bg
70
2006 InvestBulgaria Agency
Developed by Rivas, a consultancy providing strategic and financial advisory services
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