Dozens of foreign firms are setting up automotive component factories in Bulgaria.
The country, which is the EU’s poorest member state, is keen to attract new types of foreign direct investment after its real estate bubble burst in 2009.
The cost of labour is a major attraction. The average hourly wage for workers in Bulgarian industry is just 3.4 euros per hour, the lowest rate in the EU. The average across the bloc is 24.60 euros per hour.
Kostadin Djatev, Deputy Executive Director of Bulgaria’s Foreign Investment Agency, explained that there are several other strong plus points for investors.
“The overall tax burden for companies in Bulgaria is one of the lowest in the European Union. On top of that, we have the investment promotion act, so companies that get certified with us, they can get even further benefits, like, for example, the social security reimbursement,” Djatev said.
Although the automotive component sector is growing fast, Bulgaria is yet to persuade a major automaker to build their cars there.
Despite the cheap labour and the tax incentives, the country’s high level of red tape and poor infrastructure continue to deter many businesses.