Foreign Investments in Bulgaria Shrink by 60% at End-2016

According to preliminary BNB data, foreign investments in the Bulgarian economy amounted to EUR 682.8 M at the end of 2016. This is a drop of 59.7%, compared to a year earlier.

There is a drop in all categories but the biggest decrease was reported for long-term investments of international companies in share holdings in subsidiaries in the country i.e. in share capital.

For the entire 2016, these investments amounted to EUR 222.3 M, compared to EUR 1.1 B in 2015. These are important because they are of the greatest significance for long-term growth.

The main flows of foreign investment to Bulgaria continue to come from offshore zones like Luxembourg and countries with tax reliefs like Holland where the subsidiaries of several ventures from third countries have been registered. The ventures use the subsidiaries to develop thei business in Bulgaria.

In 2016, a total of 19.9% of the foreign investments in Bulgaria or EUR 135.6 M came from Luxembourg. Most of these funds are probably invested by Bulgarian citizens hiding their property via offshore companies.

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