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Legal frame

The legal frame captures the majority of steps that every investor might follow developing its investments from scratch to a completed project.
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Application of the Investment Promotion Act

GENERAL PROVISIONS:

Investment promotion under this Act shall be performed mainly through:

  1. provision of administrative services with shortened waiting time and provision of individualized administrative services;
  2. sale or onerous creation of a limited right in rem to immovables constituting private State or private municipal property without an auction or a competitive bidding procedure, at market or lower prices;
  3. sale or onerous creation of a limited right in rem over to grounds without an auction or a competitive bidding procedure, at market or lower prices, with constructed delivery physical infrastructure constituting public property;
  4. financial assistance for the construction of physical infrastructure elements;
  5. financial support for training for attainment of professional qualification;
  6. financial support for partial reimbursement of the compulsory social and health insurance contributions made by the investor for the account thereof, in the capacity thereof as employer, for public social insurance, for supplementary compulsory retirement insurance and for compulsory health insurance in respect of the newly appointed factory and office workers for the implementation of the investment project;
  7. opportunities for other forms of State aid, institutional support, public-private partnership of establishing of joint ventures for priority investment projects;
  8. various types of transactions concluded between the investor and a commercial corporation established for the purpose of construction and development of industrial zones;
  9. tax reliefs under the Corporate Income Taxation Act;

INVESTMENT PROMOTION

Investment Promotion Conditions and Measures:

Investments must fulfil the following conditions:

  1.  they must be related to the setting-up of a new enterprise, to the extension of an existing enterprise/activity, to diversification of the output of an enterprise/activity into new products or to a fundamental change in the overall production process of an existing enterprise/activity;
  2. they must be implemented in the economic activities specified in the Regulations for Application of this Act with the corresponding codes, identified according to the effective Statistical Classification of Economic Activities in the European Community (NACE) and, respectively, the direct application thereof in the Republic of Bulgaria through the corresponding classification;
  3. the income from the investment project which is being executed must be at least 80 percent of the total income of the enterprise of the investor for the period of time specified in Item 8;
  4. the period for execution of the investment must not exceed three years from the date of starting work on the project until the date of completion of the said project, including for a large investment project within the meaning given by Article 2, paragraph 52 and Article 14, paragraph 13 of Regulation (EU) No 651/2014;
  5. within any single establishment, they must not be below the threshold amount fixed by the Regulations for Application of this Act, and the said amount may be reduced:(a) up to three times for investment projects which are to be entirely implemented within the administrative boundaries of economically disadvantaged regions designated by the Regulations for Application of this Act;(b) up to three times for investments in high-technology activities of the industrial sector of the economy, specified by the Regulations for Application of this Act;(c) up to five times for investments in high-technology activities of the services sector, specified by the Regulations for Application of this Act;(d) more than five times, where employment, within the meaning given by Item 7, is created and maintained in high-technology activities or in economically disadvantaged regions and up to three times in the rest of the economic activities, the requirements to the employment being specified by the Regulations for Application of this Act;
  6. at least 40 percent of the eligible costs of the tangible and intangible assets shall be financed by the investor’s own resources or by external financing in a form excluding public support;
  7. they must create and maintain employment which fulfils simultaneously the conditions set out in Article 14, paragraph 9 of Regulation (EU) No 651/2014
  8. the investment in the economic activity referred to in Item 2 must be maintained in the respective area where it is located for at least five years, and in the case of small and medium-sized enterprises, three years, reckoned from the date of its completion within the meaning of Article 14, paragraph 5 of Regulation (EU) No 651/2014;
  9. the tangible and intangible fixed assets acquired must be new and must be bought on market conditions from third parties independent of the investor, within the meaning given by Article 14, paragraph 6 of Regulation (EU) No 651/2014;
  10. the other conditions set out in Chapter I and the special provisions of Chapter III of Regulation (EU) No 651/2014 must be fulfilled with regard to the investment aid referred to in Article 2a herein.

For detailed information about Investment Promotion Act and Commission Regulation /EU/ No 651/2014, please see:

Investment_Promotion_Act

Regulation EC 651 2014