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 More and more Romanian companies come to Bulgaria

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PostSubject: More and more Romanian companies come to Bulgaria   Mon Oct 04, 2010 4:48 pm

[size=55:2z4yhiwv]InvesterBG 04 October 2010

More and more Romanian companies come to Bulgaria because of lower taxes

Stringent measures to reduce the deficit in Romania led thousands of Romanian companies to move to Bulgaria, wrote in an analysis by Reuters.

Agency indicates that corporate tax and income tax in Bulgaria is only 10% compared to 16 per cent in Romania and now VAT is lower. Romania increases the rate of VAT as part of its efforts to fulfill the conditions of the loan agreement with IMF and EU.

In addition, Reuters states, Bulgaria and reduce the initial capital requirement to $ 2 by 5000 in Romania is the requirement for 200 lei (63.55 dollars). Taking advantage of our country also recognizes the fact that establishing a company in Bulgaria is needed less than a week in Romania - nearly double the time.

All this may not seem as important as the advantages, but according to Romanian businessmen speed of changes in their country and uncertainty about possible future restrictions forced them to relocate.

"
The Romanian legislation and taxation are changing day to day, so how can I have security guarantees and if I find a company here?"
Said 23-year-old Bogdan Popescu, who wants to create a business with online TV and plans to base the company in Bulgaria.

Reuters states that the Bulgarian authorities do not provide accurate data, but our media quoted according to which about 2500 Romanian companies already established in Bulgaria, and two daily continue to register only in Rousse.

According to lawyers, companies already established in Bulgaria, do not want to speak with the media because they fear that this will attract the attention of tax authorities in Romania.

"
There is increased interest of Romanian companies on the costs of establishing a business in Bulgaria,"
said Desiree Grozeva, marketing expert at the Bulgarian-Romanian Chamber of Commerce in Rousse. According to her, a fact that the increase in VAT in Romania to 24% effect on the decision to register the business in Bulgaria.

Romanian politician Varujan Pambuchiyan has commented that Romania should pay attention to the situation by making it easier to do business by reducing red tape and provide rates that are much higher than those in neighboring countries.

Analysts said the intensifying trend of leaving the business can create serious problems for long-term budget.

"
This is more image-making problem because we do not attract foreign companies and Romania needs to invest now,"
said Nicolae Alexandru-Chidesku, chief economist of ING Bank in Bucharest.

Ruse lawyers point out that most of their new customers in Romania who want to register in Bulgaria work in wholesale and retail trade, building materials, transport and agriculture.

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PostSubject: Re: More and more Romanian companies come to Bulgaria   Tue Dec 14, 2010 8:47 am

[size=55:2ku6uoab]novinite 14 December 2010

Romania Business Lured by Tax Heaven Bulgaria

Romanian companies are moving in droves to Bulgaria attracted by lower taxes, which the government has maintained at pre-recession levels, Sofia finance minister has said.

"
We've maintained the same tax system, unlike Romania or Greece. Over here, the value-added-tax rate remained at 20%. The profit tax amounts to 10%, while in Romania it is 16% and the tax on dividends amounts to 5% in Bulgaria and about 12% in Romania,"
Simeon Djankov pointed out in an interview for Romanian Adevarul newspaper.

The article cites data, according to which nearly 300 a month, are moving base to the Bulgarian town of Russe on the Danube River. Already no fewer than 1,500 Romanian companies have opened offices in Russe, while others are setting up their business in the Bulgarian capital, Sofia.

Djankov' s statement comes on the heels of numerous Bulgarian media reports that nearly 2 500 Romanian companies flocked to the southern neighbour over the spending cuts and austerity measures imposed in Romania, lower taxes and better business conditions across the Danube.

According to the articles the recent increase of the value-added-tax from 19% to 24% in Romania just came to further deteriorate the business climate, already strained by unskilled labour force, high social securities, bureaucracy and heavy indirect taxes.

The Romanian cabinet however was quick to refute the reports.

In an official statement, issued by Bucharest at the end of October, the number of businesses , registered and operating in Bulgaria by July, 2010, have been set at 284.

Bulgaria has the lowest personal and corporate income tax in the EU at 10%, which was introduced at the beginning of 2008, replacing the previous system, which combined several different tax rates - between 20 and 24%, depending on income.

Bulgaria also has the lowest social security rates, which coupled with a 10% flat rate, makes it very attractive for physical entities, employers and potential investors.

Bulgaria's Prime Minister Boyko Borisov has denied reports that a hike in tax rates may be looming after the government scrapped its plans for a VAT increase this year, which was hoped to plug a budget gap that has thwarted the new EU member's Euro efforts.

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