Openness to Foreign Direct Investment (FDI) is one of the most important factors that determine the capability of a nation to attract and retain investment from foreigners. Speaking from this point of view, Bulgaria is one of the nations in Eastern Europe that promotes openness to FDI through its attractive foreign investment regime. This includes low flat income and corporate taxes, and incentives for new investments.
Among the sectors that currently attract a large number of foreign investors include biomass, healthcare, environmental technology, agriculture, and information technology. Moreover, the receptiveness of Bulgaria on Foreign Direct Investment is complemented by the increase of European Union funds, which supports a number of projects that contribute toward the growth of this economy. In addition, as a member of the European Union, good and services produced in this country can now access to numerous markets across Europe.
Apart from its openness to FDI, Bulgaria boasts as one of the few countries in Eastern Europe that have a stable political environment and a steady economic performance. Notably, this nation has its national currency pegged to the Euro, which is a source of its stability and motivation for increased investment and trade activities. Furthermore, while the global financial crisis of 2007/08 affected the growth rate of exports and the inflow of FDI in Bulgaria, recent trends indicates that the country is back on track, with an increase in the number of foreign investors and an upsurge in the demand for its products and services, not only in Europe but also in North America and Asia.
In addition to this, the Bulgarian government has recently focused on a number of policy reforms to promote good governance, enhancing the development of human capital and in general, promote its innovation potential and competitiveness not only within the European Union jurisdiction but also in Asia, North America and South America.
There are a number of regulations that Bulgaria has in place with respect to Foreign Direct Investment. Notably, the Investment Promotion Act of 2004 promotes equal treatment of both domestic and foreign investors. In addition to this, the legal framework of this nation provides incentives to investors who have interests in education, high-technology and manufacturing, and human resource development. These incentives include training of staff, accessibility to state financing for basic infrastructure, assisting investors purchase land, as well as providing tax incentives.
Finally, it is essential to note that Bulgaria has laws and regulations on competition in different sectors. In this regard, the Law on the Protection of Competition of 2008 aims at enacting the European Union laws and regulations on consumer protection and competition. As such, this law prohibits unfair competition, monopoly, misuse of market power and restrictive trade practices. Importantly, the law covers factors that could be used to promote unfair competition such as pricing, market share, discrimination against competing customers, supply sources, and utilizing economic power to create mergers.
In addition, laws and regulations on market competition forbid marring of competitors’ names, reputation and brands. Therefore, companies that need to set up administrative offices in Bulgaria have an opportunity to enjoy protection from unfair competition, both from the local and foreign rivals.