Automotive Industry

1
Automotive Industry

• ? Proximity to existing and new productions
  facilities of OEM and Tier 1 companies
• ? Traditions and expertise in the industry, two
  major subsectors electronics and metal casting
• ? Attractive operational and start-up costs
• ? Availability of inputs at competitive prices
• ? Low risk

2
Automotiveparts Production Locations
3
Credit Rating of Bulgaria Bulgaria has proven
higher investment credibility
June 2004 StandardPoors gave an
investment-grade foreign-currency rating

• BB?- (stable outlook) by StandardPoors
• BB?- (stable outlook) by Fitch IBCA
• B?1 (stable outlook) by Moodys
• BB?- (positive outlook) by the Japan Credit
  Rating Agency

4
Tax Reform Budget 2005

• ? Corporate tax 15
• ? Income tax rate min - 10 max - 24
• ? Increasing the amortization norm for new plant
  and equipment 50
• ? Expenditure on research and development of the
  companies are not subjects to taxation
• ? Tax Preferences
• ? establishing new enterprise
• ? expanding of an enterprise
• ? increasing the average number of employees

5
Investment Categories
Third category universal measures (Euro 5 - 25
mln.) ? Submission of information, prepared and
processed in advance ? Certificate, specifying
the investment category and the type of
administrative services, provided by the central
and local executive authorities ? Minimum
deadlines.
Second investment category (Euro 25 - 50 mln.)
? Individual administrative services ?
Individual information services ? Institutional
support.
First investment category (above Euro 50 mln.) ?
Universal measures ? Institutional
support ? State aid for developing the
necessary elements of technical infrastructure.
6
Requirements to investors

• ? Establishing a new enterprise, expanding or
  modernizing an existing one
• ? Term of project implementation up to 3 years
• ? Creating new jobs
• ? Economic efficiency

7
Investment incentives in Bulgaria

• ? 15 corporate income tax in 2005
• ? 0 corporate tax in areas with above average
  unemployment
• ? Depreciation rates 2 years for computers and
  related equipment and 3 1/3 years for
  manufacturing equipment
• ? 2-year VAT exemption for imports of equipment,
  consumables and components related to investment
  projects valued over  5 million
• ? 0 capital gains tax
• ? The highest bracket for personal income tax is
  only 29 for monthly income over  300
• ? The Employment Agencys Programmes and measures
  for employment of young people

8
Innovation Strategy measures for stimulating
innovative and research potential

• Stimuls for research, related to industry and
  the co-operation among RD units, universities
  and business
• ? Improvement of the innovations funding,
  evolving mechanisms for attracting private
  equity/capital
• ? encouraging implementation of new technologies
• ? support for the establishment of clusters in
  sectors, traditional for our country
• ? support for newly established companies and
  firms that develop successfully in view of
  enhancing their innovative potential
• ? creating mechanisms for attracting foreign
  investment in the spheres of science and
  technology.