VZCZCXYZ0000
RR RUEHWEB

DE RUEHSF #0027/01 0201514
ZNR UUUUU ZZH
R 201514Z JAN 09
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC 5702
INFO RUCPDOC/USDOC WASHDC
RUCPCIM/CIMS NTDB WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SOFIA 000027 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA AND USTR 
TREASURY FOR OASIA 
 
E.O. 12958:  N/A 
TAGS: EINV EFIN ELAB ETRD KTDB OPIC USTR BU
SUBJECT:  BULGARIA: 2009 INVESTMENT CLIMATE STATEMENT 
 
REF: 08 STATE 123907 
 
¶1.  The following is the 2009 Investment Climate Statement for 
Bulgaria: 
¶A.  OPENNESS TO FOREIGN INVESTMENT 
Bulgaria has put in place a liberal foreign investment regime, 
including low, flat corporate and income taxes and competitive 
incentives to attract high levels of foreign investment.  Promising 
sectors for foreign investors include: energy (including alternative 
energies), information technology, transportation, 
telecommunications, and agriculture.  EU integration has opened new 
markets for Bulgarian-produced goods and services.  Bulgaria's labor 
market is generally well-educated and relatively low-cost.  The 
country's geographic position places it at the crossroads of Europe, 
the Middle East, and the CIS.  A stable U.S. ally, Bulgaria is a 
member of NATO, the EU and the WTO. 
Investment Trends and Policies 
------------------------------ 
Sound economic performance and political stability have enabled 
Bulgaria to attract leading foreign investors.  Gradual convergence 
with the EU common market, fiscal prudence and a national currency 
pegged to the Euro have provided stability and incentives for 
increased trade and investment. After several years of solid growth, 
the global financial crunch is being felt in Bulgaria through 
decreasing levels of foreign direct investment and a lowered 
international credit rating.  Bulgaria's overreliance on capital 
account inflows has made the economy vulnerable to external 
financial shocks.   Nevertheless, the country's economy is forecast 
to have modest growth in 2009. 
The Investment Promotion Act stipulates equal treatment of foreign 
and domestic investors.  It creates conditions for improved 
administrative services and includes an investment incentive 
package.  The law encourages investment in manufacturing and 
renewable energy, in high-technology, as well as in education and 
human resource development.  The law explicitly recognizes 
intellectual property and securities as  foreign investments. 
 
Common Forms of Investment 
-------------------------- 
The most common type of organization for foreign investors is a 
limited liability company.  Other typical forms are joint stock 
companies, joint enterprises, business associations, general and 
limited partnerships, and sole proprietorships. 
The main controlling bodies of law are: the 1991 Commercial Code, 
which regulates commercial and company law, including the creation 
and rights of legal entities; and the 1951 Law on Obligations and 
Contracts, which regulates civil transactions.  These laws are 
deemed generally adequate and they do not limit foreign 
participation in legal entities. 
The 2003 Law on Special Purpose Investment Companies allows for 
public investment companies (SPIC) in real estate and receivables. 
Since an SPIC is considered a pass-through structure, at least 90 
percent of its net income must be distributed to shareholders, who 
are taxed on the dividends received.  A SPIC should apply for an 
operational license from the Financial Supervision Commission within 
six months after its registration.  Prospective U.S. investors 
should consult appropriate legal counsel for up-to-date legal 
information and conduct due diligence before making any 
obligations. 
Investment Barriers 
------------------- 
Foreign investors often encounter the following problems:  a 
sluggish government bureaucracy; poor infrastructure; corruption; 
frequent changes in the legal framework; and pre-determined public 
tenders.  In addition, a weak judicial system limits investor 
confidence in the courts' ability to enforce ownership and 
shareholders rights, contracts, and intellectual property rights. 
EU accession requirements have led to the adoption of a 
constitutional amendment which will, beginning in 2014, allow EU 
citizens and entities to acquire real property, while all other 
foreigners will be able to do so only on the basis of an 
international agreement ratified by the Bulgarian Parliament, 
thereby favoring EU investors over those from the United States. 
There are no legal restrictions against acquisition of land by 
locally registered companies with majority foreign participation, 
which is the method most foreigners use to purchase property in 
Bulgaria. 
Privatization 
-------------- 
The Privatization Agency (PA) administers the privatization of all 
state-owned companies. Privatization methods include:  public 
auction, public tender, and public offerings.  Foreign companies, 
including state-owned ones, may purchase Bulgarian state-owned 
firms.  Bulgaria sold some of its district heating plants (Plovdiv, 
Russe, Varna) in 2007 as part of a major privatization package.  The 
district heating plants in Pernik and Shumen are on the list for 
2009, as is the military machine building plant in Sopot 
(South-Central Bulgaria).  The six Free Trade Zones, which have lost 
influence since Bulgaria adopted a common trade regime with the rest 
of the EU, are also on the privatization list.  In addition, in 2009 
Bulgaria will again attempt to privatize the country's tobacco 
holding, Bulgartabac. 
The 2002 Privatization and Post-Privatization Act instituted a 
Post-Privatization Control Agency under the authority of the Council 
of Ministers tasked to oversee the implementation of privatization 
contracts.  This body ensures that non-price privatization 
commitments (employee retention, technology transfer, environmental 
liability and investment) in the privatization selection criteria 
are honored. In addition, creditors are no longer required to claim 
their receivables within six months from the start of the 
privatization. 
Concessions 
----------- 
Under the 2006 Law on Concessions, the state is authorized, on the 
basis of a concession agreement, to grant private investors a 
partial monopoly.  Concessions are awarded on central and/or local 
government property, on the basis of a tender, and are issued for up 
to 35 years. The concession period may not be extended beyond this 
time limit.  The decision for awarding a concession may be appealed 
before the Consumer Protection Commission.  There are three main 
concession categories:  construction, services, and mining and 
exploration.  Potential fields for concessions may therefore include 
the construction of roads, ports and airports, power generation and 
transmission, mining, petroleum exploration/drilling, 
telecommunications, forests and parks, beaches, and nuclear 
installations. 
¶B.  CONVERSION AND TRANSFER POLICIES 
In 1999, Bulgaria replaced much of its outdated and fragmented 
foreign currency legislation and liberalized current international 
transactions in accordance with IMF Article VIII obligations.  Under 
2003 amendments to the 1999 Foreign Currency Act, anyone may take up 
to BGN 25,000 or its foreign exchange equivalent out of the country 
without documentation.  However, the export of between BGN 8,000 and 
BGN 25,000 or its foreign exchange equivalent must be declared at 
customs.  Export of amounts larger than BGN 25,000 must be 
accompanied by a declaration about the source of these funds and 
supported by documents certifying that the person does not owe 
taxes.  No tax certificate is required for foreigners exporting the 
cash equivalent of BGN 25,000 or greater provided the amount is 
equal to the amount declared (or less) when imported.  The import of 
more than BGN 8,000 or its foreign exchange equivalent must be 
declared at customs. 
The law also stipulates that payments abroad may be executed only 
through bank transfers.  Transfers over BGN 25,000 for current 
international payments (imports of goods and services, 
transportation, interest and principal payments, insurance, 
training, medical treatment, and other purposes defined in Bulgarian 
regulations) must be supported by documentation showing the need and 
purpose of such payments. 
¶C.  EXPROPRIATION AND COMPENSATION 
According to Article 17 of the Bulgarian Constitution, private real 
property is protected by law.  Depending upon the purpose, and only 
in the case that public needs cannot be met by other means, 
expropriation actions may be undertaken by the Council of Ministers 
or the Regional Governor, provided that the owner is adequately 
compensated.  Monetary compensation at market price is the primary 
method.  No tax is levied on the expropriation transaction. 
Expropriation actions of the Council of Ministers can be appealed 
directly to the Supreme Court on the basis of the expropriation 
action, the property appraisal, or the size of compensation. 
Regional Governor's expropriation actions can be appealed to the 
local court.  In its Bilateral Investment Treaty (BIT) with the 
United States, Bulgaria committed itself to international 
arbitration in the event of expropriation and other investment 
disputes. 
¶D.  DISPUTE SETTLEMENT 
The Judicial System 
------------------- 
Bulgaria's 1991 Constitution serves as the foundation of the legal 
system and creates an independent judicial branch.  The judiciary 
suffers from systematic flaws, serious backlogs and opaque 
procedures that hamper the swift and fair administration of justice. 
 Corruption remains a serious problem.  Public opinion polls 
indicate that bribes are commonly paid in the judicial sector and 
some courts are beholden to business ties and political influence. 
Bulgaria's judicial system includes judges, prosecutors and 
investigators.  The governing body of the judiciary is a 25-member 
Supreme Judicial Council (SJC) that has broad powers to appoint, 
discipline and dismiss magistrates.  There are three levels of 
courts.  The 117 regional courts exercise jurisdiction over civil 
and criminal cases.  Above them, 29 district courts (including the 
Sofia City Court) have trial-level jurisdiction in civil cases where 
claims exceed 10,000 BGN, serious criminal cases, and other cases as 
provided by law.  The district courts are also courts of appellate 
review for regional court decisions.  First-instance civil cases are 
brought before one judge in the regional or the district court, 
depending on the case.  The five appellate courts may review the 
decisions of the district courts.  On the highest level is the 
Supreme Court of Cassation. 
On issues of law, the Supreme Court of Cassation has appellate 
jurisdiction over all civil cases involving claims over 5,000 BGN 
and criminal cases.  The new Administrative Procedure Code, adopted 
in April 2006, introduced the establishment of 28 courts throughout 
the country specialized in reviewing appeals of administrative acts. 
 The administrative courts officially started receiving complaints 
in March 2007.  The decisions issued by the administrative courts 
can be disputed before the Supreme Administrative Court as a final 
appeal.  The Supreme Administrative Court also rules on the legality 
of acts by the Council of Ministers and the ministries.  The Supreme 
Courts hear cases in three-judge panels, whose decisions may be 
appealed to a five-judge panel of the same court.  Decisions by the 
five-judge panels are final and binding.  Bulgarian law provides for 
jurors only in criminal cases. 
In 2007, the Bulgarian Parliament passed Constitutional amendments 
followed by a new Judicial System Act aimed at strengthening 
disciplining of magistrates, increasing the efficacy of the court 
system, and preventing corruption in the justice system.  As a 
result, an Inspectorate was created under the SJC, which monitors 
the conduct of magistrates and initiates disciplinary proceedings. 
Nine of the eleven members of the Inspectorate were elected with a 
supermajority by Parliament at the end of 2007 in a highly 
politicized process.  In 2008, the Inspectorate was fully staffed 
and referred over 20 cases of improper magistrates' conduct to the 
SJC to take disciplinary actions.  The Constitutional Court is not 
integrated into the rest of the judiciary.  It issues final 
interpretations of the constitution, rules on constitutional 
challenges to laws and acts, rules on international agreements prior 
to Parliamentary ratification, and reviews domestic laws to 
determine their consistency with international legal norms. 
Bankruptcy 
---------- 
The 1994 Commercial Code Chapter on Bankruptcy provides for 
reorganization or rehabilitation of a legal entity, maximizes asset 
recovery and provides for fair and equal distribution among all 
creditors.  The law applies to all commercial entities, except 
public monopolies or state-owned companies established by a special 
law.  Bank bankruptcies are regulated under the Bank Bankruptcy Act, 
while the 1996 Insurance Act regulates insurance company failures. 
Under Part IV of the Commercial Code, debtors or creditors can 
initiate bankruptcy proceedings.  The debtor must declare bankruptcy 
within 30 days of becoming insolvent.  Once insolvency is 
determined, the court appoints an interim trustee to represent and 
manage the company, take inventory of property and assets, identify 
and convene the creditors, and develop a recovery plan.  At the 
first meeting of the creditors, a trustee is nominated; usually this 
is just a reaffirmation of the court appointed trustee. 
Non-performance of a money obligation must be adjudicated (res 
judicata) before the bankruptcy court can determine whether the 
debtor is insolvent.  In addition, amendments passed in 2003 add a 
presumption of insolvency when the debtor is unable to perform an 
executable obligation, has suspended all payments, or when the 
debtor can only pay the claims of certain creditors. 
Creditors must declare all debts owed to them within one month of 
the start of bankruptcy proceedings.  The trustee then has seven 
days to compile a list of debts.  A rehabilitation plan or a scheme 
of distribution (in cases of liquidation) must be proposed no later 
than a month after the date on which the court approves the list of 
debts.  The court must grant approval of the plan by the creditors 
within seven days.  After creditors' approval, the court endorses 
the plan and terminates the bankruptcy proceeding.  The lack of 
trained trustees has been a problem in the past.  The June 2003 
amendments provided for examinations for individuals applying to 
become trustees and obliged the Ministers of Justice and Economy to 
organize annual training courses for trustees.  A Regulation on the 
procedure for appointment, qualification and control over the 
trustees, developed by the Ministries of Justice, Economy and 
Finance was published in June 2005. 
The methods of liquidating assets were also revised by the June 2003 
amendments.  The main objective was to establish a legal framework 
for selling assets that accounts for the character of bankruptcy 
proceedings, thus avoiding the need to apply the Civil Procedure 
Code.  The new regime includes rules requiring a greater degree of 
publicity for asset sales.  The amendments limited the rights to 
appeal judicial decisions made during bankruptcy proceedings. 
Execution of Judgments 
---------------------- 
To execute a judgment, a final ruling must be obtained.  The court 
of first instance must then be petitioned for a writ of execution 
(based on the judgment).  On the basis of the writ of execution, a 
specialized category of professionals, execution agents, seize the 
assets or ensure the performance of the ordered action.  The 
institutional framework for execution of judgments was improved with 
 
a 2005 law allowing private professionals to act as execution 
agents.  Since 2006 both private and state execution agents operate 
in Bulgaria.  Three years afte the introduction of private 
execution agents, bsinesses report a dramatic increase in the 
efficiency of executive of judgments.  A new Civil Procedure Code, 
effective since March 2008, introduced new terms and practices aimed 
to streamline civil procedures, including the execution of 
judgments.  Foreign judgments can be executed in Bulgaria. 
Execution depends on reciprocity, as well as bilateral or 
multilateral agreements, as determined by an official list 
maintained by the Ministry of Justice.  The United States does not 
currently have reciprocity with Bulgaria; Bulgarian courts are not 
obliged to honor decisions of U.S. courts.  All foreign judgments 
are handled by the Sofia City Court, which must determine that the 
judgment does not violate public decrees, standards, or morals 
before it can be executed.  There are also cases defined by the 
Civil Procedure Code (certain real estate issues and Bulgarian 
precedents), in which judgments cannot be executed even if they 
conform to Bulgarian laws and morals. 
International Arbitration 
------------------------- 
 
Pursuant to its Bilateral Investment Treaty (BIT) with the United 
States, Bulgaria has committed to a range of dispute settlement 
procedures starting with notification and consultations.  Bulgaria 
accepts binding international arbitration in disputes with foreign 
investors. 
The most experienced arbitration institution in Bulgaria is the 
Arbitration Court (AC) of the Bulgarian Chamber of Commerce and 
Industry (BCCI).  Established more than 110 years ago, the AC hears 
civil disputes between legal persons, one of whom must be seated 
outside Bulgaria.  It began to act as a voluntary arbitration court 
between natural and/or legal persons domiciled, respectively seated 
in Bulgaria, since 1989. 
Arbitration is regulated by the 1988 Law on International Commercial 
Arbitration, which complies with the United Nations Commission on 
International Trade Law (UNCITRAL) Model Law.  According to the Code 
of Civil Procedure not all disputes may be resolved through 
arbitration.  Disputes regarding rights over real estate situated in 
the country, alimony, or individual labor disputes may only be heard 
by the courts.  In addition, under the Code of Private International 
Law of 2005, Bulgarian courts have exclusive competence over 
industrial property disputes regarding patents issued in Bulgaria. 
Regarding arbitration clauses selecting a foreign court of 
arbitration, the Code of Civil Procedure mandates that these clauses 
would only be admissible if at least one of the parties has its seat 
or residence abroad.  As a result, foreign-owned, 
Bulgarian-registered companies having a dispute with a Bulgarian 
entity can only have arbitration in Bulgaria.  However, under the 
Law on the International Commercial Arbitration, the arbitrator 
himself could be a foreign person.  Under the same act, the parties 
can agree on the language to be used in the arbitration proceedings. 
 Arbitral awards are enforced through the judicial system.  The 
party must petition the Sofia City Court for a writ of execution. 
Having obtained a writ however, the creditor needs then to execute 
the award using the general framework for execution of judgments in 
the country.  Foreclosure proceedings may also be initiated. 
Bulgaria is a member of the 1958 New York Convention on the 
Recognition and Enforcement of Foreign Arbitral Awards and the 1961 
European Convention on International Commercial Arbitration. 
Bulgaria is also a signatory of the International Center for 
Settlement of Investment Disputes (ICSID) convention and the 
Convention on the Settlement of Investment Disputes between States 
and Nationals of Other States.  There is a Court of Arbitration -- 
an ADR center for domestic business disputes -- at the Bulgarian 
Industrial Association (BIA). 
Mediation 
--------- 
Mediation is a relatively new phenomenon in Bulgaria.  After the 
adoption of the 2004 Mediation Act,  BCCI and the American Chamber 
of Commerce (AmCham) opened commercial mediation centers with 
USAID-trained mediators.  Mediation is still not widely used due to 
the relatively small pool of experienced mediators and the limited 
public knowledge on the possibilities of out-of-court dispute 
settlement. 
¶E.  PERFORMANCE REQUIREMENTS AND INCENTIVES 
Bulgaria does not impose export performance or local content 
requirements as a condition for establishing, maintaining, or 
expanding an investment.  For most categories of expatriate 
personnel from countries outside the EU a work permit is required. 
Residence permits are often difficult to obtain.  A 1:10 ratio 
requirement between foreign, non-EU residents and Bulgarian 
employees is applied.  A June 1999 law regulating gambling imposes 
license requirements on foreigners organizing games of chance. 
The Invest Bulgaria Agency (IBA) (www.investbg.government.bg), the 
government's coordinating body for investment, provides information 
services, individual administrative services and assessment of 
qualification to receive investment incentives.  First-class 
investments (investments over 70 million BGN, about USD 50 million) 
are deemed to be priority "Class A" investment projects.  At the 
request of investors receiving first-class investment certificates, 
IBA can recommend that the competent authorities grant them free 
real estate (either state or municipal property).  For first-class 
investments, the Council of Ministers may provide state financing 
for critical infrastructure deemed necessary for the investment 
plan's implementation.  Additionally, IBA represents first and 
second-class investors "Class B" (investments of 40-70 Million BGN, 
about USD 28 - 50 million) before all central and territorial 
executive authorities and the local self-government authorities, and 
processes all administrative documents.  The government policy for 
promotion of investment is not applicable to investments in coal and 
steel production, shipbuilding, synthetic production, agriculture, 
and fisheries.  In 2003, the GOB introduced tax incentives for 
investments in regions with high unemployment.  VAT exemption on 
imports for investment projects over 10 million BGN (about USD 7.1 
million) under certain conditions, was introduced in 2004. 
¶F.  RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT 
The Constitution (Article 19) states that the Bulgarian economy 
"shall be based on free economic initiative."  Private entities can 
establish and own business enterprises engaging in any profit-making 
activities, unless expressly prohibited by law.  Bulgaria's 
Commercial Code guarantees and regulates the free establishment, 
acquisition, and disposition of private business enterprises. 
Competitive equality is the standard applied to private enterprises 
in competition with public enterprises. 
¶G.  PROTECTION OF PROPERTY RIGHTS 
Bulgarian law protects the acquisition and disposition of property 
rights.  In practice, the protection of property rights is subject 
to various difficulties.  Although Bulgarian Intellectual Property 
Rights (IPR) legislation is generally adequate - and in some cases 
stronger than in other EU countries - industry representatives 
believe effective IPR protection requires stronger enforcement, 
including stricter penalties for offenders.  In 2006, Parliament 
carried out a major revision of the IPR-related legal framework. 
The Law on Copyright and Related Rights, the Law on Patents and 
Registration of Utility Models, the Law on Marks and Geographical 
Indications, the Law on Industrial Design and the Penal Code were 
all harmonized with international standards.  As a major step toward 
improving the work of the judiciary, a completely new Penal 
Procedure Code was adopted by Parliament in 2006, while amendments 
to the Constitution are still being considered.  The strongly 
criticized GOB Decree on Border Measures for Protection of IPRs was 
replaced by EU Regulation 1383/2003 (customs regulation) and is now 
being applied. 
The government still needs to strengthen institutional capacity, 
coordination, and in some cases, the will to address major 
enforcement problems, especially in combating and prosecuting 
organized crime groups and internet pirates. 
In acknowledgement of the improvements made in IPR field, in April 
2006 Bulgaria was removed from the Special 301 Watch List.  Although 
the sale of pirated optical disc media (ODM) is diminishing, 
Internet cyber crimes are turning out to be the greatest challenge 
for the GOB and creative industry.  At a rate of 68 percent in 2007, 
software piracy is pervasive both among end users and system 
builders.  While the government has taken some steps to address IP 
problems, effective enforcement remains a major issue.  The deficit 
of understanding of the specific Internet environment has led to a 
heavy and inefficient investigation process.  As a result, very few 
IPR cases reached the court in 2008. 
Bulgaria is a member of the World Intellectual Property Organization 
(WIPO) and a signatory to key international agreements. 
Copyrights 
---------- 
The 1993 Law on Copyright and Related Rights protects literary, 
artistic, and scientific works.  Article 3 provides a full listing 
of protected works including computer programs (which are protected 
as literary works).  The Law distinguishes between moral and 
economic rights.  The use of protected works is prohibited without 
the author's permission, except in certain instances. Since 2000 the 
Law has undergone  major revisions to comply with EU and 
international legislation. 
The term for protection of copyrighted works is 70 years after the 
author's death.  For films and other audio-visual works, copyrights 
are protected during the lives of director, screenplay-writer, 
cameraman, or the author of dialogue or music, plus 70 years.  Other 
amendments to the law enable copyright owners to file civil claims 
to suspend the activities of pirates; provide for confiscation of 
equipment and pirated materials; enhance border control over pirated 
material; introduce a new neighboring right for film producers; and, 
harmonize Bulgarian legislation with the EU Association Agreement. 
The Copyright Office of the Ministry of Culture is responsible for 
copyright matters in Bulgaria.  The National Film Center is 
responsible for enforcing intellectual property rights with regard 
to films and videos.  Bulgarian legislation provides for criminal, 
civil and administrative remedies against copyright violation, but 
because of the small number of court judgments and sentences, law 
enforcement is still inadequate. 
Patents 
------- 
Bulgarian patent law has been harmonized with EU law in the areas of 
application for European patents and the patent protection in 
general.  Bulgaria joined the Convention on the Granting of European 
Patents (European Patent Convention) in 2002. 
Bulgaria grants the right to exclusive use of inventions for 20 
years from the date of patent application, subject to payment of 
annual fees.  Innovations can also be protected as utility models 
("small inventions").  The term of validity of a utility model 
registration is four years as of the filing date with the Patent 
Office.  It may be extended by two consecutive three-year periods, 
but the total term of validity may not exceed 10 years. 
Inventions eligible for patent protection must be new, involve an 
inventive step and be capable of industrial application.  Article 6 
of the Law on Patent and Utility Model Registration lists items not 
regarded as inventions, and Article 7 lists the so-called exceptions 
to patentability.  With regard to utility models, no registration 
shall be granted for methods and objects in the field of 
biotechnology. 
The independent Patent Office is the competent authority with 
respect to patent matters.  The patent law describes the application 
procedures and the examination process.  Applications are submitted 
directly to the Patent Office and recorded in the state register. 
Compulsory licensing may be ordered under certain conditions:  if 
the patent has not been used within four years of filing the patent 
application or within three years from the date of issue; the patent 
holder is unable to offer justification for not adequately supplying 
the national market; or, declaration of a national emergency. 
Disputes arising from the creation, protection or use of inventions 
and utility models can be considered and settled under 
administrative, court or arbitration procedures.  Disputes are 
reviewed by specialized panels convened by the President of the 
Patent Office and may be appealed to the Sofia Administrative Court 
within three months of the panel's decision.  Patent infringements 
are punishable by administrative fines from 300 up to 20,000 BGN. 
In 1996, Parliament approved the Protection of New Types of Plants 
and Animal Breeds Act.  This Certificate allows for a term of 
protection of 25 years for annual plants and 30 years for perennial 
plants and animal breeds, which starts from its date of issuance by 
the Patent Office.  In 1998, Parliament ratified the 1991 
International Convention for the Protection of New Varieties of 
Plants (UPOV). 
Data Exclusivity 
---------------- 
Responding to long-standing industry concerns, the GOB included a 
provision to provide data exclusivity (protection of confidential 
data submitted to the government to obtain approval to market 
pharmaceutical products) in its Drug Law, which took effect in April 
¶2007.  As of January 1, 2007, Bulgaria grants supplemental 
protection certificates for pharmaceutical products and plant 
protection products under the EU Regulations.  This protection is 
similar to that provided in the U.S. 
Trademarks 
---------- 
In 1999, Parliament passed a series of laws on trademarks and 
geographical indications, industrial designs and integrated circuits 
in accordance with TRIPs requirements and the government's EU 
Association Agreement.  The Trademarks and Geographical Indications 
Act, which was amended in 2005 and 2006 to comply with EU standards, 
regulates the establishment, use, suspension, renewal and protection 
of rights of trademarks, collective and certificate marks, and 
geographic indications. 
Registration is refused, or an existing registered trademark is 
cancelled, if a trademark constitutes a reproduction or an 
imitation, or if it creates confusion with a registered or 
well-known trademark, as stipulated by the Paris Convention and the 
Trademarks and Geographical Indications Act.  Applications for 
registration must be submitted to the Patent Office under specified 
procedures. 
With amendments in the Trademarks and Geographical Indications Act 
in October 2006, well-known marks can now be determined as such by 
the Patent Office or by Sofia Administrative Court and entered in a 
special state register.  In addition, Bulgaria is a member of the 
Lisbon Agreement for the Protection of Appellations of Origin and 
their International Registration, which makes protections for 
appellations of origin protection possible. 
Right of priority with respect to trademarks that do not differ 
substantially is given to the application that was filed in 
compliance with Article 32.  Right of priority is also established 
on the basis of a request made in one of the member countries of the 
Paris Convention or of the World Trade Organization.  To exercise 
the right of priority, the applicant must file a request within six 
months of the date of original filing. 
A trademark is normally granted within eighteen months of filing a 
complete application.  Refusals can be appealed before the Disputes 
Department at the Patent Office.  The decisions of this department 
can be appealed before the Sofia Administrative Court within three 
months following notification.  The right of exclusive use of a 
trademark is granted for ten years from the date of submitting the 
application.  Requests for extension of protection must be filed 
during the final year of validity, but not less than six months 
prior to expiration.  Protection is terminated if a mark is not used 
for a five-year period. 
Trademark infringement is a problem in Bulgaria for many U.S. 
manufacturers.  Bulgarian legislation provides for criminal, civil 
and administrative remedies against trademark violation, but due to 
the low record of court resolutions and effective sentences, law 
enforcement is inadequate.  While more draconian measures are 
available, such as imprisonment of up to five years, confiscation or 
fines of up to 5,000 BGN, their application is rare. 
In Bulgaria, trademark and service-marks and rights to geographic 
indications are only protected pursuant to registration with the 
Bulgarian Patent Office or an international registration mentioning 
Bulgaria; they do not arise simply with "use in commerce" of the 
mark or indication.  Under Bulgarian law, legal entities cannot be 
held criminally liable. Similarly, criminal penalties for copyright 
infringement and willful trademark infringement are limited, 
compared to enforcement mechanisms available under U.S. law. 
Industrial Designs 
------------------ 
According to the Bulgarian design law, industrial designs which are 
new and original can be granted certificates and entered in a state 
register.  The term of protection is 10 years, which could be 
renewed for up to 25 years.  The procedure and conditions for 
enforcement of rights are similar to those provided for trade marks. 
 
¶H. TRANSPARENCY OF REGULATORY SYSTEM 
Major Taxation Issues Affecting U.S. Businesses 
--------------------------------------------- --- 
The Treaty for Avoidance of Double Taxation (TADT) between the 
United States and Bulgaria that was signed in February 2007, entered 
into force on January 1, 2009.  The Treaty applies to direct taxes 
only and excludes indirect levies, such as value-added and excise 
taxes, as well as all social contributions.  It also applies to all 
sources of income that residents of either state have received "at 
source" in the other state.  The TADT is expected to reduce the tax 
burden for residents of both states, which will stimulate 
cross-border trade and investment. 
A flat 10 percent tax rate on income is in place since January 2008, 
replacing the old progressive taxation.  The new flat income tax 
matches a corporate and profit tax rate of 10 percent making 
Bulgaria one of the EU member states with the lowest direct taxes. 
Certain tax incentives, such as an exemption from corporate tax, 
apply in regions of high unemployment.  Physical persons, but not 
legal ones in certain trades, pay a "patent" tax (presumptive tax), 
according to a schedule established by Parliament.  Since January 1, 
2008, the size of the "patent tax" is determined by and payable to 
the municipal authorities.  Dividends (and liquidation quotas) 
distributed by a Bulgarian resident company to U.S. investors are 
subject to a withholding tax of 5 percent at the source.  A 50 
percent depreciation rate is applied on investment in new machinery 
and other equipment, computers and computer software. 
The changes introduced in 2008 refer to a new monthly ceiling of BGN 
2,000 for social contributions.  Employers pay 60 percent of the 
monthly contributions for social security insurance and health 
insurance to an unemployment fund, but their share of contributions 
is slated to decline, in phases, to 50 percent by 2010.  Employers 
must contribute for social security insurance and health insurance: 
13.1 percent and 4.8 percent of employees' gross salaries, 
respectively.  Companies also contribute one percent of the total 
wage cost to an unemployment fund which also covers accidents at 
work.  Foreign persons are required to have the same insurance and 
unemployment compensation packages as Bulgarians. 
There is a 20 percent single-rate value-added tax (VAT), except for 
some tourist services upon which VAT is levied at seven percent 
rate.  VAT registration is mandatory for persons with turnover 
exceeding BGN 50,000 over a calendar year, while all others can 
register voluntarily.  A new VAT regime is in place for trade in 
goods between Bulgaria and the other EU member countries. 
All goods and services are subject to VAT except exports, 
international transport, and precious metals supplied to the central 
bank.  VAT payments are generally rebated when goods are resold. 
Exporters may claim VAT refunding within a 30-day period.  Excise 
taxes are levied on tobacco, alcoholic beverages, fuels, certain 
types of automobiles, and gambling.  Investors are entitled to VAT 
refunds on locally purchased goods within 10 days if they meet 
certain investment criteria. 
Foreign investors have asserted that widespread tax evasion, 
combined with the failure of the authorities to enforce collection, 
place them at a disadvantage.  However, in conjunction with its IMF 
agreement, the government has strengthened tax collection and 
limited tax arrears of state-owned enterprises.  Another problem 
underscored by investors is the frequent revision of tax laws, 
sometimes without sufficient notice.  The full harmonization of 
domestic tax legislation with the EU law is expected to lead to more 
transparent and predictable tax environment. 
Regulatory Environment 
---------------------- 
An abundance of licensing and regulatory regimes, combined with 
arbitrary interpretation and enforcement by the bureaucracy, and the 
incentives thus created for corruption, are an impediment to 
investment. 
In 2003, Parliament passed the Restriction of Administrative 
Regulation and Control of Economic Activity Act, which establishes a 
general and systematized set of rules for simplifying and 
implementing administrative regulations.  The law defines 39 
operations that must be licensed and introduces two other simplified 
regimes, i.e., registration and permit regimes. 
From the perspective of regulatory relief, this law was a milestone. 
 It sets forth firm market principles of regulation, requires that 
regulation at all levels of government must be justified by defined 
need (in terms of national security, environmental protection, or 
personal and material rights of citizens) and cannot impose 
restrictions unnecessary to the stated purposes of the regulation. 
The law also requires that the regulating authority take account of 
the compliance costs to be borne by business and that no 
national-level law can be passed without an impact analysis on the 
law's economic effect on the regulated activity.  In addition, the 
law eliminates bureaucratic discretion in granting applications for 
routine economic activities and provides for "silent consent" when 
the government has not acted upon an application in the allotted 
time.  All these reforms considerably lighten the potential of 
regulatory abuse at all levels of government.  While the law creates 
a ground-breaking normative framework, its practical enforcement is 
dependent upon movement towards a more flexible bureaucratic 
environment. 
Energy Regulator 
---------------- 
The Energy Law establishes a predictable regulatory environment in 
the energy sector where the key regulatory responsibilities are 
vested with the State Energy and Water Regulatory Commission - a 
separate body with regulatory authorities.  In mid-2007 the 
electricity market in Bulgaria was liberalized to comply with EU 
energy legislation.  The restructuring of electricity monopolies 
provided equal market access and fair competition in the sector. 
 
Competition Policy 
------------------ 
A new 2008 Law on the Protection of Competition (the "Competition 
Law") is intended to establish and maintain a competitive market in 
compliance with EU rules.  The Competition Law forbids monopolies, 
restraining agreements, trade restrictive practices, abuse of a 
dominant market position, and unfair competition, and seeks to 
promote consumer protection. Companies are prohibited from:  direct 
or indirect pricing practices; distribution of market shares and 
supply sources; limiting manufacturing development to the detriment 
of consumers; discriminatory treatment of competing customers; tying 
contracts to additional and unrelated obligations; and the use of 
economic coercion to cause mergers.  The Law prohibits certain forms 
of unfair competition: damaging competitors' goodwill; 
misrepresentation with respect to goods or services; 
misrepresentation with respect to the origin, manufacturer, or other 
features of goods or services; the use or disclosure of someone 
else's trade secrets in violation of good faith commercial 
practices; and, "unfair solicitation of customers" (promotion 
through gifts and lotteries), which may create difficulties for some 
foreign enterprises.  Monopoly position can be established only by 
law and for certain categories of activities: railway and postal 
services; use of atomic energy; production of radioactive materials; 
and weapons production. 
The Competition Law expands the competency of the Commission for 
Protection of Competition (CPC), defines the prohibition on misuse 
of an oligopoly and imposes a single criterion for assessing the 
significance of planned concentration:  the aggregate turnover of 
the enterprises affected by the concentration. 
¶I. EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT 
Since 1997, the Bulgarian Stock Exchange (BSE) has operated under a 
license from the Securities and Stock Exchange Commission (SSEC). 
The 1999 Law on Public Offering of Securities regulates issuance of 
securities, securities transactions, stock exchanges, and investment 
intermediaries.  Comprehensive amendments to this Law establish 
significant rights for minority shareholders of publicly-owned 
companies in Bulgaria.  In addition, they create an important 
foundation for the adoption of international best practices for 
corporate governance principles in public companies. 
The infrastructure of the stock exchange has been substantially 
improved in recent years, including the establishment of an official 
index (SOFIX).  In addition to floating company stock and 
privatization through the exchange, the Bulgarian stock exchange 
also trades in government bonds, corporate bonds, Bulgarian 
Depositary Receipts, municipal and mortgage-backed bonds, and 
Bulgarian Depository Receipts.  Raising capital has become 
increasingly attractive, and more competitive, with the advent of 
special purpose investment companies (REITs) which have aggressively 
invested in the economy.  Trading has been facilitated by the 
growing number of investment brokers and a joint database for secure 
access in place. 
The BSE suffered visibly in 2008 as a result of the global financial 
crisis.  In 2008, BSE's market capitalization lost almost 60 percent 
over 2007, reaching BGN 12.3 Billion ($9.2 Billion).  The major 
index, SOFIX, went down 80 percent on the year, with the remaining 
three indexes also ending up deeply in red territory.  At the same 
time, the share turnover on the regulated market lost 75 percent, 
while the number of transactions went down 18 percent.  The number 
of initial public offerings (IPOs) was unchanged at 23, the same as 
in 2007, after IPOs were discontinued in mid-June 2008.  The GOB 
still plans to sell its part in the Bulgarian stock exchange to a 
world-renown capital and stock market. 
The Banking System 
------------------ 
The Bulgarian banking system has undergone considerable 
transformation since its virtual collapse in 1996 and now 
demonstrates both high predictability and client and investor 
confidence.  There are 30 commercial banks (24 subsidiaries and 6 
branches), with total assets of 68.8 billion BGN (about USD 44.8 
billion) and an annual growth of 25.1 percent in November 2008 or 
104 percent of the projected 2008 GDP.  Approximately 39.2 percent 
of bank assets are concentrated in three banks: Bulbank, DSKBank, 
and United Bulgarian Bank (UBB). 
Bulgaria has completed the privatization of its state-owned banks, 
attracting some strong foreign banks as strategic investors. 
Foreign investors drawn to the Bulgarian banking industry include 
UniCredito Italiano SpA (UCI), BNP PARIBAS, KBC, National Bank of 
Greece, Societe Generale, Bank Austria Creditanstalt, Raiffeisen 
International, OTP Group, American Life Insurance Company - 
Consolidated Eurofinance Holdings, Regent Pacific Group, and 
Citibank. 
Bulgaria's banking system is highly capitalized.  Reflecting 
expanded lending in recent years, the average capital adequacy ratio 
(capital base to risk-weighted credit exposures) for the banking 
system has steadily declined from 43 percent at end-1998 to 14.4 
percent in September 2008, but still remains above the Bulgarian 
National Bank's requirement of 12 percent.  Domestic banks have 
responded to the global financial crisis by reducing risk exposure 
through an increase in interest rates on both deposits and loans. 
Government Securities 
--------------------- 
 
The government finances government expenditures by accessing capital 
markets.  Commercial banks are the primary purchasers of these 
instruments, while pension funds and insurance companies participate 
mainly in the secondary market.  Banks from the EU can be primary 
dealers of the governments bonds as well.  They have to apply and go 
through the procedure for a primary dealer. 
The foreign bank transfers the money, which is then converted into 
leva to make the purchase, and must be registered with the Ministry 
of Finance.  The foreign bank must open a lev account (a "custody 
account") for transactions.  This lev account cannot be used as a 
standard deposit bank account.  A foreign currency account can be 
opened, but it is not obligatory. 
The Investment Promotion Act defines securities, including treasury 
bills, with maturities over six months as investments.  Repatriation 
of profits is possible after presenting documentation that taxes 
have been paid. 
¶J.  POLITICAL VIOLENCE 
There have been no incidents in recent years involving politically 
motivated damage to projects or installations.  Rather, violence in 
Bulgaria is primarily criminally motivated. 
¶K.  CORRUPTION 
Corruption is still one of the gravest problems in Bulgaria's 
investment climate, despite the Bulgarian government's numerous 
advances in laws and legal instruments.  Bulgaria ranks 72nd among 
180 countries included in Transparency International's (TI) 
Corruption Perception Index for 2008, down eight places from 2007. 
The established human trafficking, narcotics, and contraband 
smuggling channels that contribute to corruption in Bulgaria have 
yet to be broken, and serious efforts and political will are still 
needed to carry out much-needed reforms to address inefficiencies in 
the judicial system.  The Bulgarian public generally holds the 
police, the judiciary, customs officials, and political parties in 
low regard, due to their perceived corruption. 
Bribery is a criminal act under Bulgarian law for both the giver and 
the receiver.  Penalties range from one to fifteen years' 
imprisonment, depending on the circumstances of the case, with 
confiscation of property added in more serious cases.  In very grave 
cases, the Penal Code specifies prison terms of 10 to 30 years. 
Bribing a foreign official is a criminal act.  There have been 
trials and convictions of enterprise managers, prosecutors, and law 
enforcement officials for corruption.  While Bulgarian tax 
legislation does not explicitly prohibit the deduction of bribes in 
the computation of domestic taxes, deductions connected with bribery 
and other illegal activities are not allowed under the tax code. 
Bulgaria has a 1998 Law on Measures against Money Laundering, which 
also covers bribery, and in 1998 was one of the first non-OECD 
nations to ratify the OECD Anti-Bribery Convention.  Bulgaria has 
also ratified the Council of Europe Convention on Laundering, 
Search, Seizure, and Confiscation of Proceeds of Crime (1994) and 
the Civil Convention on Corruption (1999).  Bulgaria has signed and 
ratified the UN Convention against Corruption (2003); the Additional 
Protocol to the Council of Europe's Criminal Law Convention on 
Corruption; and  the UN Convention Against Transnational Organized 
Crime. 
Although the Bulgarian government has achieved some successes in the 
fight against organized crime and corruption, corruption and 
political influence in business decision-making continue to be 
significant problems in Bulgaria's investment climate. 
¶L.  BILATERAL INVESTMENT AGREEMENTS 
As of February 2007, Bulgaria has foreign investment promotion and 
protection treaties or agreements with Albania, Algeria, Argentina, 
Armenia, Austria, Belarus, Belgium-Luxembourg, China, Croatia, Cuba, 
Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Georgia, 
Germany, Greece, Hungary, India, Indonesia, Iran, Israel, Italy, 
Jordan, Kazakhstan, Kuwait, Latvia, Lithuania, Lebanon, Macedonia, 
Malta, Moldova, Mongolia, Morocco, Netherlands, Poland, Portugal, 
Republic of Korea, Romania, Russia, Singapore, Slovakia, Slovenia, 
Spain, Sweden, Switzerland, Syria, Thailand, Tunisia, Turkey, 
Ukraine, the United Kingdom of Great Britain and Northern Ireland, 
the United States, Uzbekistan, Vietnam, Yemen, Yugoslavia, and 
Zimbabwe. 
Bulgaria has a Bilateral Investment Treaty (BIT) with the United 
States, which guarantees national treatment for U.S. investments and 
creates a dispute settlement process.  The BIT also includes a side 
letter on protections for intellectual property rights.  The 
Governments of Bulgaria and the United States exchanged notes in 
2003 to make Bulgaria's obligations under the BIT compatible with 
its EU obligations, and finalized the process in January, 2007. 
¶M.  OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS 
In 1991, the Overseas Private Investment Corporation (OPIC) 
(www.opic.gov) and the GOB signed an Investment Incentive Agreement, 
which governs OPIC's operations in Bulgaria.  OPIC provides medium- 
to long-term funding through direct loans and loan guarantees to 
eligible investment projects in developing countries and emerging 
markets.  OPIC also supports a number of privately owned and managed 
equity funds, including a regional fund for Southeast Europe created 
in 2005 for investments in companies in Bulgaria and other Balkan 
countries. 
OPIC's Small- and Medium-Size Financing is available for businesses 
with annual revenues under 250 Million USD.  OPIC's Structured 
Financing focuses on U.S. businesses with annual revenue over 250 
Million USD and supports large-scale projects that require large 
amount of capital, such as infrastructure, telecommunications, 
power, water, housing, airports, hi-tech, and financial services. 
OPIC offers American investors insurance against currency 
inconvertibility, expropriation, and political violence.  Political 
risk insurance is also available from the Multilateral Investment 
Guarantee Agency (MIGA), which is a World Bank affiliate, as well as 
from a number of private U.S. companies. 
¶N. LABOR 
Bulgaria's workforce officially consists of 3,544,700 (third quarter 
of 2008) well educated and skilled men (53 percent) and women (47 
percent).  The adult literacy rate in Bulgaria is 98 percent.  A 
high percentage of the workforce has completed some form of 
secondary, technical, or vocational education.  Many Bulgarians have 
strong backgrounds in engineering, medicine, economics, and the 
sciences, but there is a shortage of professionals with Western 
management skills.  The demand for skilled managers is increasing 
with an influx of high technology, innovative and knowledge-based 
companies from the EU.  The aptitude of workers and the relative low 
cost of labor are considerable incentives for foreign companies, 
especially those that are labor intensive, to invest in Bulgaria. 
Bulgaria's Constitution recognizes workers' right to join trade 
unions and organize.  The National Council for Tripartite 
Cooperation (NCTC) provides a forum for dialog among government, 
national-level employer organisations, and national-level trade 
unions, on issues such as cost-of-living adjustments.  An 
established practice each year of negotiating the so-called "social 
security thresholds" between trade unions and the employers 
organizations helps determine the minimum monetary basis for 
calculating the amount of the social securities that both employer 
and employee should pay. 
Bulgaria has two large trade union confederations represented at 
national level, the Confederation of Independent Trade Unions of 
Bulgaria (CITUB) and Confederation of Labour "Podkrepa" ("Support"). 
 At the end of 2008, the estimated trade union membership is about 
350 000 for CITUB and over 100 000 for CL "Podkrepa."  CITUB, the 
successor to the trade union integrated with the Communist Party, 
has been reformed and has long since severed its ties to the 
socialists, whereas Podkrepa is an independent confederation.  There 
are very few restrictions on trade union activity and the 
confederations operate freely, but the workforce in smaller firms in 
the private sector is often not represented by trade unions.  In 
addition, there are six nationally recognized employer organizations 
currently in Bulgaria which target different industry and company 
membership. 
Under the Labor Code, employer and employee relations are regulated 
by employment contracts.  The framework of the employment contracts 
can be shaped through collective bargaining.  Following the Labor 
Code, collective agreements (collective labor contracts) can be 
concluded at the sectoral level, enterprise level and municipal 
level (only for activities financed by the budget).  The Labor Code 
addresses worker occupational safety and health issues, establishes 
a minimum wage (determined by the Council of Ministers), and 
prevents exploitation of workers, including child labor.  The Code 
clearly delineates employer rights, strengthening management's hand 
in disciplining the workforce.  Disputes between labor and 
management can be referred to the courts, but resolution is often 
subject to delays.  The idea for establishing so-called "labor 
courts" has so far been in deadlock.  Neither foreign companies, nor 
Bulgarian companies having majority foreign-control are exempt from 
the requirements of the Labor Code. 
Over the last four years, the Labor Code has been amended to address 
labor market rigidities and bring labor legislation into compliance 
with the EU social policy and employment requirements.  The 
amendments to the Labor Code simplify additional work procedures, 
restrict mandatory leaves, and relax procedures for implementing 
collective redundancies. In 2008, GOB passed changes in the labor 
legislation which establish high fines, which an employer must pay 
if s/he violates the Labor Code.  The fines could reach up to 15 000 
Euros.  The minimum annual paid leave is 20 days.  Effective January 
1, 2009, the minimum monthly salary is 240 BGN ($171). 
During 2002-2003, the Ministry of Labor formed the new "National 
Institute for Conciliation and Arbitration" (NICA), which developed 
a framework for collective labor dispute mediation and arbitration. 
NICA includes representatives from labor, employers, and the 
Government, as does the roster of mediators and arbitrators. 
NICA-sponsored collective labor dispute resolutions are still few in 
number.  A number of the appointed mediators received basic 
mediation skills training from the U.S. Federal Mediation and 
Conciliation Service. 
¶O. FOREIGN-TRADE ZONES/ FREE PORTS 
The 1999 Customs Act renamed the six duty-free zones "free zones." 
Foreign, including U.S., individuals and corporations, and Bulgarian 
companies with 1.0 percent or more foreign ownership may set up 
operations in a free zone.  Thus, foreign-owned firms have equal or 
better investment opportunities in the zones compared to Bulgarian 
firms. 
There are at present six operational "free zones" in Bulgaria:  Ruse 
and Vidin ports on the Danube; Plovdiv; Svilengrad (near the Turkish 
border); Dragoman (near the Yugoslav border); and Burgas port on the 
Black Sea.  They are all managed by joint stock or state-owned 
companies.  The government provided land and infrastructure for each 
zone. 
All forms of production and trade activities and services may take 
place in the free zones.  Foreign, non-EU goods delivered to the 
free zones for production, storage, processing, or re-export are VAT 
and duty exempt.  Bulgarian goods may also be stored in free zones 
with permission from the customs authorities.  With Bulgaria now in 
the EU, the export of goods of EU origin via the FTZs has lost 
importance, as the new VAT regime requires full price payment, VAT 
inclusive, before selling it into another EU Member State.  The six 
FTZs are slated for privatization in 2009. 
EU integration has encouraged regional authorities to attract 
outside investors and spur local economic development.  In 
partnership with the private sector, they provide resources (ground, 
infrastructure, etc.) for the development of industrial zones and 
parks, which are different from FTZs as they do not provide for any 
form of preferential tax treatment.  International and local 
investors can use the favorable factors, such as low-cost and 
educated labor and easy access to the local market, to relocate 
their business.  Currently, there are a total of 35 industrial parks 
at various stages of development, with the most advanced being the 
industrial parks near Sofia, Rakovski, Panagyurishte, Stara Zagora, 
Silistra, Pazardzhik, Kardzhali, Dobrich, Varna, and Ruse. 
¶P. FOREIGN DIRECT INVESTMENT STATISTICS 
Between 1992 and 2007, total cumulative FDI into Bulgaria amounted 
to $31,637.8 billion (88 percent of GDP in 2007).  FDI in 2007 
totaled $8.9 billion (22.6 percent of GDP).  Bulgaria's direct 
investment stock abroad was a total of $571.5 million in 2007. 
 
FDI by Year (millions of U.S. dollars) 
1992  34.4 
1993  102.4 
1994  210.9 
1995  162.6 
1996  256.4 
1997  636.2 
1998  620.0 
1999  818.8 
2000  1,005 
2001  812.9 
2002  969.7 
2003  2,099 
2004  34434 
2005  3,927 
2006  7,568 
2007  8,982 
Total 31,68 
(Source: Invest Bulgaria Agency) 
 
FDI by Country of Origin 1996-2007 (millions of USD) 
 
Austria  4,876 
Netherlands 3,312 
Greece  2,897 
U.K.   2,745 
Belgium and 1,68.5 
Luxemburg 
Germany  1,67.8 
Cyprus  1,314.0 
USA *  1,208.0 
Hungary  1,198.2 
Switzerland 1,018.7 
Ireland  992.2 
Spain  971.4 
Italy  970.9 
Czech Republic 928.1 
Russia  687.2 
France  452.3 
Turkey  343.6 
Denmark  256.1 
Israel  190.2 
Slovenia  179.2 
Latvia  163.8 
Malta  153.4 
Sweden  127.7 
Japan  125.6 
Liechtenstein 121.0 
Estonia  106.8 
Norway  86.8 
(Source: Invest Bulgaria Agency) 
 
* Owing to methodological quirks, not all data accurately reflect 
investment rankings.  Official GOB investment statistics currently 
rank the United States 8th in terms of overall investment in 
Bulgaria for the period 1992-2007.  While the Central Bank credits 
the United States with investments at the rate of $40-$50 million 
per year in the last eight years, this data is incomplete as many 
U.S. investors establish European subsidiaries to manage their 
investments in Bulgaria. 
 
FDI by industry 2000-2007 (millions of USD) 
Real estate and business activities 6,731.6 
Financial activities    5,528.4 
Manufacturing      4,689.2 
Trade and repairs     4,660.2 
Construction      2,075.2 
Electricity, gas and water   2,035.4 
Telecommunications and transport  1,643.6 
Hotels and restaurants    481.1 
Mining       151.3 
Agriculture, forestry and fishing  125.3 
Education       13.2 
(Source: Bulgarian National Bank) 
 
MCELDOWNEY