Investments

• Financial stability
• Low real estate prices giving chance for good return on investments
• Excellent weather conditions and environment
• Rich culture and historical heritage

Bulgaria has a liberal foreign investment regime. The government focuses on developing promising economic sectors such as energetics, transport, telecommunications and agriculture. Bulgaria provides considerable incentives for job creation. Many municipalities are ready to grant concessions for significant foreign investments. Bulgaria has well-educated workforce and low-labour costs, and its geographical location places it at the crossroads between Europe, Middle East and the states from the former Soviet Union. Bulgaria acceded to EU in 2007.

The ongoing economic progress and political stability has enhanced the ability of Bulgaria to attract respected international investors. The Bulgarian government pursues responsible economic policy. Leading international rating agency raised the rating of Bulgaria to investment grade, reflecting the positive economic outlooks of the country and its prudent fiscal policy.

The most common type of organization for foreign investors is a limited liability company. Other typical forms are joint-stock companies, general partnerships, business associations and sole proprietorships.
The constitutional ban on direct purchase of land by foreign persons is no longer in force. According to the conditions of the Treaty on accession to EU, nationals from EU are allowed to acquire real property, while all other foreigners should act according to the principles of the international agreement ratified by the Bulgarian Parliament, thereby favouring the EU investors over those from the USA.
The activity in the construction sector is shifting to Eastern Europe. In the last year the activity in construction has increased by 16,4 per cent in Bulgaria.

The Bulgarian banking system has undergone significant transformation since its virtual collapse in 1996, and it is still developing. There are 30 commercial banks with total assets of 65.7 billion leva (about 47.3 billion USD). Approximately 60 percent of the bank assets are concentrated in six banks: Unicredit Bulbank, State Saving Bank (DSK Bank), Raiffeisen Bank, United Bulgarian Bank (UBB), Eurobank and FG (Post Bank and DZI bank) and First Investment Bank (FIB).
Bulgaria has completed the privatization of the state-owned banks, attracting some strong foreign banks as strategic investors. Foreign investors drawn to the Bulgarian banking industry, include UniCredito ItalianoSpA, EFG Eurobank Ergasias S.A. the French national Bank (PARIBAS), the National Bank of Greece, Societe Generale, the Austrian bank Creditanstalt, the American Life-insurance Company, Consolidated Eurofinance holdings, Regent Pasific Company and CITIBank.

In 2007 the total bank assets have increased significantly (25%) and the banking sector has accumulated profits which are 40 percent higher than the previous year. Against the background of the global financial instability there are minor fluctuations in borrowed funds, which is indicative of retained confidence in the banking system, says the release of BNB on the state of the banking sector.

The workforce in Bulgaria officially consists of 3,397, 000 highly-educated and qualified men (56 percent) and women (44 percent). The literacy rate in Bulgaria is 93 percent. A high percentage of the workforce has completed some form of secondary education, they have technical or vocational education. Many Bulgarians have strong background in the fields of engineering, medicine, economics and science. The aptitude of the workers and the relative low cost of labour are great incentives for foreign companies to invest in Bulgaria. The statutory charges for the employer and different benefits (clothing allowances, bonuses etc.) can add about 50 percent to the nominal wage.

In the last few years the real estate market in Bulgaria is very dynamic, it is developing successfully, and it is expected that this trend will be retained. The demand on housings and apartments has increased in the bigger cities.
The accession of Bulgaria to EU, the good economic perspective, the favourable geographical location and the migration processes in the country are among the prime factors influencing the real estate market.

The real estate market – in terms of demand, supply and also prices.
The average price of residential properties in Bulgaria in the first three months of 2008 has increased by 6,8% according to data of the National Statistical Institute (NSI).

The interest of the foreign investors is still the main driving force for the real estate market, and lately more and more for the economy of Bulgaria. In the period 1998 – 2006, 16 % of the foreign investments were directed to the real estates and construction, thus ranking the sector third after production (25%) and financial intermediation with its 21%. However, in 2007 more than half of the foreign capital investments were in the real estate and construction sectors, according to the data of the Bulgarian National Bank.
Foreign investments in real estates have increased by app. 24 per cent, and the growth in construction has reached 43%. Totally, for 2007 the direct foreign investments were above 6 billion EUR, as 2.15 billion EUR of the foreign investments were directed to transactions with real properties, and 0.7 billion EUR – to construction. In 2008 the results mark no growth but show stability and retaining of the levels.
After 6-7 years of upsurge, the interest on the part of foreign and local investors has dropped in the first quarter of 2009, and the direct investments in the sector, for certain, will not reach the levels of the previous year. The real estate sector in Bulgaria is in a period of adjustment of prices and profits. The market of holiday properties along the Black Sea coast and in the mountain resorts is stagnated, incl. due to the considerable over-construction there. At the same time, the volume of the commercial areas in the malls will continue to increase, but at slower pace compared to the period 2006-2008.

Bulgaria is still an attractive destination for investments. Invest but cautiously!
The drop of the real estates prices in Bulgaria in the first four months of 2009 is considerable. It varies from 7% to 48% in different cities and regions, on the basis of actually concluded deals. In April the change of prices is almost insignificant, and therefore the expectations are more optimistic. There are positive signals for renewal of activity in the sector.
It is still difficult to make long-term forecasts due to the expected direct impact of the global crisis development on the economic life.

The prices of housings collapsed at an unprecedented rate in the beginning of the year but it seems that the drop has made them sufficiently attractive for buyers with enough money in cash. After people with savings started to return to the market for views, and even to conclude deals, the first signs of revival are observed.
The reduction of prices in the last months made finding finished new houses in good areas at very favorable prices possible.

Irrespective of the way in which the real estate market will develop in the next years, the people should not give up the purchase of a home. Home is different from property and the buyers make this distinction.

It is useless to postpone in order to see how the market will develop. In long-term prospective, if they had made the right choice, it cannot be a mistake.

Furthermore, with the growing supply and attractive prices at the moment, they have better chance to make a good deal. The people must be very precise about whether they have financial resource for purchase of а property.