Amendments in the Investment Promotion Act, thanks to
Desctription
Prioritization of State Aid
Before: State aid was not explicitly emphasized among the incentives granted by the State./State aid was not prominent among the incentives provided by the state.
Now: In Article 2, we bring forward the provision of state aid in the form of financial investment assistance to a more prominent position.
Increased Budget for the Provision of State Aid
Before: Up until three years ago, the budget amounted to merely 10 million BGN per year.
Now: In recent years, the budget has reached 100 million BGN.
Clear Criteria for Investor Certification
Before: The certification of investors was a tedious process with no predictable criteria.
Now: Through the amendments to the law, a clear methodology has been introduced under which investors will be certified once they accumulate the required points.
Obligation to Provide State Aid
Before: The provision of state aid was uncertain and dependent on discussions with institutions and the availability of budgetary funds.
Now: We have established an obligation for the State to provide state aid upon fulfillment of the relevant criteria.
Prioritization of Medium and High Value-Added Industries
Before: No significant distinction was made between industries, and only the size of the investment was considered.
Now: Priority will be given to investments in medium and high value-added industries.
Opportunity to Utilize the Full Amount of State Aid that the European Union allows us
Before: We regularly offered state aid of less than 10% of the investment.
Now: In underdeveloped regions, we can provide up to the maximum permitted 60% in state aid.
What are we aiming for?
The goal is to promote export-oriented investments that do not distort domestic markets.
What is the purpose of the proposed amendments in the IPA:
The amendments concern only manufacturing investments, with the aim of supporting regional development and increasing the wages of workers with low and medium skill levels.
To stimulate export-oriented manufacturing investments.
To ensure that Bulgaria remains competitive in granting state aid compared to other countries in the region, without necessarily reaching the maximum thresholds.
To introduce a simplified categorization of investor types. The current law has overly complex investor thresholds with numerous exceptions.
To introduce a new investor category: Strategic Investor – for investments exceeding €100 million, enabling negotiations for state aid up to the maximum thresholds for significant projects.
To provide state aid for smaller manufacturing investments in medium and high value-added industries. Such investments are vital for smaller towns in Bulgaria, aiming to accelerate the improvement of the workforce structure, increase wages, and reduce regional disparities.
What the proposed amendments to the IPA Do NOT aim to achieve:
Not to incentivize investments in low value-added sectors (e.g., the textile industry), while retaining the possibility to support such investments if they exceed a certain size threshold.
Not to incentivize warehouse and logistics facilities.
Not to incentivize manufacturing investments targeting the domestic market that could negatively affect competition within specific market segments.
Not to incentivize investments in services, and particularly in the IT sector, due to the fundamentally different structure of the workforce in the IT industry.
