Bulgaria to Turn EU's Poorest Region into 'Tax Paradise'Business | April 21, 2011, Thursday // 14:56| views
Bulgaria's Northwest is supposed to become a tax paradise. Map by Wikipedia
Bulgaria's Cabinet intends to take measures to encourage foreign direct investment in the northwestern part of the country, the Severozapaden region, which is the poorest EU region.
Finance Minister Simoen Djankov will propose that the state lower the criteria for receiving a "Class A" investor status for companies in investing in Northwestern Bulgaria, MP from ruling party GERB Nikolay Kotsev announced on TV7.
Class A investor status is awarded by the Bulgarian state to large-scale foreign investors and provides them with a number of benefits such as speedy administrative services and tax breaks.
In 2010, the government already lowered the threshold for granting a Class A investor status to companies from a required investment of BGN 30 M to BGN 20 M.
However, the Finance Minister will suggest that Class A investor status in Northwestern Bulgaria should be received for investments exceeding BGN 7 M. Class B investor status will be received for investing BGR 4 M, otherwise granted for investments of over BGN 10 M.
What is more, investors will be exempt from taxes altogether if they reinvest their profit in the same region. The proposals will be tabled to the Cabinet and the Parliament by the end of Arpil.
Bulgaria presently has the lowest taxes in Europe with flat corporate and income tax rates of 10%.
The proposed benefits for investors in Northwestern Bulgaria are similar to those for investors in high-tech and knowledge based industries all over the country, where the thresholds for Class A and Class B investors are also BGN 7 M and BGN 4 M.
Severozapaden, the poorest EU NUTS 2 region, encompasses the districts of Vidin, Montana, Vratsa, Pleven, and Lovech; four of the five border on the Danube River.
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