Bulgaria’s acting Cabinet approved on March 1 a series of changes to the regulations on the implementation of the Investment Promotion Act, the Government’s media service said in a statement.
The changes stem from the amendments to the law passed by Parliament last year. The most important change is a lowered threshold that will make it easier for investors to apply for investment certificate that will entitle them to receive government incentives.
The regulations will lower the threshold for receiving a class A investment certificate to 10 million leva in the industrial sector (three million in the services sector) and the threshold for a class B investment certificate to five million leva in the industrial sector (1.5 million leva in the services sector).
Even lower thresholds are envisioned if the investor will create a large number of new jobs that will be maintained for a set period of time – for a example, an investment project will be eligible for a class A investment certificate if it results in the creation of a large company and 150 new jobs that will need to be maintained for a period of at least five years.
Currently, investment in the acquisition of assets to the value of at least 20 million leva means a Class A investment certificate and 10 million leva means a Class B certificate.
Additionally, the Cabinet decided to add new industries to expand the pool of companies that could apply for investment certificates – mainly in the IT and outsourcing industries. “The addition of new economic activities will allow the certification of projects in the services sector, in particular outsourcing, where investment levels are not high, but employment generated by the project is significant,” the statement said.
Investment projects in high-tech manufacturing in areas with high unemployment will be able to apply for class A certificates if the value of the project is above four million leva (two million leva for a class B certificate). High-tech and knowledge-based investment projects in the services sector could apply for a class A certificate if the value of the project is above two million leva (one million leva for a class B certificate).
The main thrust of the amendments to the Investment Promotion Act, passed last year, and the main departure from previous practice was to introduce partial reimbursements of social security payments, for a period of up to two years, for new employees hired by new investors. The exact procedure is also detailed in the amended regulations for the implementation of the law, the Government statement said.
Although some sections of the updated Investment Promotion Act were vetoed in December by President Rossen Plevneliev, the veto was imposed only on changes to the rules for granting permanent residence and citizenship. These provisions will have to be amended by Parliament, likely in the next legislature called after the snap elections to held on May 12, but the investment incentives are set to go into effect now that the Cabinet has approved the amended implementation regulations.
(Photo: Clive Leviev-Sawyer)