Updated last 26.03.2021
This section provides the following information:
- What are the general requirements investments have to meet in order to be promoted?
- What are the minimum requirements to class “A” and “B” investments?
- What are the requirements to investments of municipal importance – class “C”?
- What are the conditions a project must meet in order to become Priority Investment Project?
The Republic of Bulgaria implements an investment promotion policy, related to granting certain privileges and facilities to the investors that contribute to the competitiveness of the Bulgarian economy.
The specific requirements to the investors, investments, as well as the promotion measures, are stipulated in the Investment Promotion Act (IPA) and the Rules for the Implementation of the Investment Promotion Act (RIIPA).
What are the general requirements investments have to meet in order to be promoted?
In order to take advantage of the promotion measures investments have to meet the following general requirements:
- They have to be related to the establishment of a new enterprise, the expansion of an existing enterprise, diversification of the production of the company introducing new products or material change in the overall production process of an existing enterprise;
- The investment should be in economic activities eligible for the respective investment class in accordance with the Classification of Economic Activities (CEA 2008);
- At least 80% of the revenues of the implemented investment project should stem from an activity as per the Classification of Economic Activities;
- The period of implementation of the investment should be up to three years as of inception of the work on the project until its completion;
- The investments should cover the minimum amounts required for the respective investment class (see below);
- At least 40 percent of the expenses on tangible and intangible assets should be financed with own resources or through external financing in a form that excludes public aid;
- They have to create and maintain employment that is directly related to the implementation of the investment project:
– The investment project should lead to net increase in the number of employees in the respective enterprise/organisation as compared to the average personnel number during the preceding 12 months;
– The employment created should be maintained for a minimum five years for a large company and – minimum three years for a small and medium-sized enterprise;
- The investment in the economic activity should be maintained in the respective location for a period of at least five years, and in the case of small and medium-sized enterprise – three years as of the date of its completion;
- The non-current tangible and intangible assets should be new and acquired at market conditions from third parties independent of the investor.
What are the minimum requirements to class “A” and class “B” investments?
 | The investment should be in one of the economic activities listed below in accordance with the CEA 2008 [1]: |
- In the industrial sector investments in the processing industry are promoted (code C 10-33.2), with the exception of the economic activities under chapter I, article 1, paragraph 3, letters “a” to “d” and chapter III, article 13, letters “a” to “c” of Regulation (EC) No. 651/2014, described in article 2, paragraph 5 and under the conditions of art. 2, para. 6 of RIIPA ;
- In the services sector investments related to those listed below are promoted:
₋ Activities related to the release of software (code J 58.2);
₋ Activities in the area of information technologies (code J 62);
₋ Information services (code J 63);
₋ Accounting and auditing; tax consultations (code М 69.2);
₋ Professional activities in head offices (code 70.1);
₋ Architectural and engineering activities;
₋ Technical testing and analyses (code М 71);
₋ Scientific research and development (code М 72);
₋ Education (code P 85);
₋ Human healthcare and medical – social care with accommodation (codes Q 86 and 87);
₋ Warehousing and storage of cargo (code Н 52.1);
₋ Administrative and auxiliary office activities, activities of call service centres and auxiliary services to economic activities not classified elsewhere (codes N 82.1, 82.2 and 82.99)
 | The IPA sets minimum thresholds of the investments which vary depending on the economic activities invested in (art. 3 of the RIIPA) |
When the investments are in economic activities related to the processing industry, the minimum investments in one site amount to:
- For class “A” – BGN 10 million;
- For class “B” – BGN 5 million.
When the investments are in economic activities related to the storage and preservation of cargo, administrative and auxiliary office activities, activities of call service centres and auxiliary services to economic activities not classified elsewhere, the minimum investments in one site amount to:
- For class “A” – BGN 3 million;
- For class “B” – BGN 3.5 million.
When the initial investment is implemented entirely within the administrative boundaries of municipalities, which during the year preceding the current year have unemployment levels equal or higher than the country average, the minimum investments in one site amount to:
- For class “A” – BGN 4 million;
- For class “B” – BGN 2 million.
When the investment is related to high-technology activities in the industrial sector, the minimum investments in one site amount to:
- For class “A” – BGN 4 million;
- For class “B” – BGN 2 million.
When the investment is related to high-technology and knowledge intensive activities in the services sector, the minimum investments in one site amount to:
- For class “A” – BGN 2 million;
- For class “B” – BGN 1 million.
When the investment design involves creation and maintenance of employment at full working hours under the conditions and subject to the provisions of the Labor Code, the amount of the investments shall be reduced depending on the number of the jobs planned to be created and maintained (article 3a, paragraph 1 of the Regulations for application of the Investment Encouragement Act).
 | For some investments there is a requirement for securing a minimum number of new jobs (art. 3а, para 2 of the RIIPA) |
When the initial investment is entirely within the administrative boundaries of municipalities which during the year preceding the current year have unemployment levels equal or higher than the country average, the created and maintained employment should not be lower than:
- 25 new jobs – for class “A“;
- 10 new jobs – for class “B“.
When the investment project is in the high-technology activities in the industrial sector (processing industry) of the economy:
- 25 new jobs – for class “A“;
- 10 new jobs – for class “B“.
When the investment project is in the high-technology activities in the service sector, the employment created and maintained should not be lower than:
- 50 new jobs – for class “A“;
- 25 new jobs – for class “B“.
What are the requirements to investments of municipal importance – class “C”?
Class “C” investments may be in any economic sector, except the restrictions set out in art. 13а of the IPA. Investments implemented within one municipality and amounting to not more than the minimum investments for class “ are promoted as class “C” investments. The specific requirements, procedure and conditions for the promotion are set by the municipalities in a special ordinance.
What are the conditions a project should meet in order to be considered a Priority Investment Project?
Priority investment projects are those that have material importance for the economic development of the country or regions in the country. Priority investment project may be implemented in the economic activities eligible for class “A” and class “B” investments.
According to art. 22е of the IPA in order for an investment project to be a priority investment project it should meet at least one of the requirements listed below:
- The investment should exceed at least three times the minimum amount for class “A” investment;
- To create employment through investments in disadvantaged regions or in high-technology activities, where the minimum number of people employed is set in the rules on the implementation of the Act. The employment should be directly related to the implementation of the investment project. The investment project should result in increase in the number of employees in the respective enterprise / organisation as compared to the average personnel number during the preceding 12 months. The employment created should be maintained for a minimum period of five years in the case of a large company and for a minimum period of three years in the case of small and medium-sized enterprises;
- To envisage the construction of industrial zones with the required technical infrastructure for attracting investments under conditions and subject to provisions, defined with the regulations for application of the Act or industrial parks, entered in the industrial parks register;
- To envisage the construction of technological parks having the required technical infrastructure to attract investments in scientific research and / or education, and/or information technology, including innovation activities for technological renewal of production and technologies under the terms, conditions and procedure set out in the rules on the implementation of the Act.
The specific parameters of the investments required and the employment that should be created, are provided for in art. 63 and art. 64 of the RIIPA:
- Generally – BGN 100 million investment and created employment for at least 150 people;
- Investment in municipalities having high unemployment rates – BGN 50 million and 100 jobs;
- Investments in the processing industry (code С 10-33.2) – BGN 50 million and 150 jobs;
- Investments in high-technology activities in the processing industry: BGN 30 million and 100 jobs;
- Investments in high-technology and knowledge intensive services (such as education, healthcare, information technologies) – BGN 20 million and 50 jobs;
- For the construction of an industrial zone and its development into an industrial park through the attraction of investments – BGN 15 million and 15 jobs;
- For the construction of technological park – BGN 15 million and 50 jobs.
In the cases when the investment design provides for higher employment than the stated one above, for each 100 employed people the required minimum amount of the investment is reduced by 10 %.
| Additional informatio | |
 | Additional information is available on the website of IBA:
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[1] http://www.nsi.bg/sites/default/files/files/publications/KID-2008.pdf