Bulgaria: The History of Eastern European success

Law Office “Popov and partners” was chosen by the prestigious international business magazine – “International Acquisition”, to analyze the economic situation in the country regarding the magazine feature – “Bulgaria: The History of Eastern European success”. Angel Buzalov – Partner and Head of M&A, corporate and labor department, gave his expert opinion in connection with questions asked by the magazine.

Here is the article published in the June issue of “International Acquisition” magazine:


The economy in Bulgaria is registering timid growth following the introduction of numerous governmental instruments for economic stimulation. One of the key factors in reviving the economy after the heavy depression was repayment of the delayed state debts to private companies. New tax regulations applicable for small and medium enterprises were also adopted. Furthermore, the new government kept the flat tax rate for all entities subject of taxation.

More than €150m has been designated for technological modernization of the private sector for 2014. The funds being tapped under EU operational programmes are also an important factor for the development of the region.

Our overall analysis of the market shows that the past year was very successful for the IT, real estate, tourism and pharmacy sectors. IT is one of the most rapidly growing industries in Bulgaria, and for the past year it has produced more than 3% of the GDP, despite employing less than 1% of the total number of the nation’s workforce.

The pharmacy sector is also expected to indicate growth between 3% and 5%, which flies in the face of the apparent crisis in Bulgaria’s healthcare system.

Real estate is, for the first time since 2009, showing an increase, albeit only in the largest cities.

The past year was not so good for the banking and finance sector, or for food chains, due to legal restrictions which are expected to have a negative impact on the sector.

We believe that a strategic challenge for Bulgaria, and for the whole of Southeast Europe, is progress on the European integration process. Another key factor for the region is the resolution of the conflict in Ukraine. One of the most important local factors is reducing the level of corporate indebtedness – currently over €50bn.