Tag Archives: en_UK

Standard&Poor’s affirms Bulgaria’s credit rating, outlook remains positive

The international S&P Global Ratings agency affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on Bulgaria. The outlook was also affirmed and remains positive.

S&P Global Ratings summarises that Bulgaria’s monetary conditions continue to improve, credit conditions support growth, and the country is making steadfast progress on entering the Exchange Rate Mechanism II (ERM II).

The Rating Agency also anticipates robust growth in 2018-2021 on the back of strong private consumption and accelerating investments. The continued absorption of EU funding and the tightening labour market conditions will support productivity over time.

The positive outlook reflects the considerable likelihood that Bulgaria will join the Exchange Rate Mechanism II (ERM II). S&P Global Ratings could raise the ratings on Bulgaria if the Bulgarian lev enters ERM II, which would further support the credibility and effectiveness of monetary policy. For more information about setting up a company in Bulgaria –contact us

The macroeconomic forecast of the European commission expects Bulgaria’s growth momentum to remain strong

The European Commission expects the growth of the Bulgarian economy to reach 3.7% growth in 2019. Investments remain strong, enjoying the support of the low interest rate environment and EU funding absorption. Domestic demand is a major driver of the domestic economic activity. Private consumption growth is supported by positive developments in the labour market, positive consumer sentiment and increased real disposable income.

In 2019, public consumption is set to accelerate due to additional rises in public sector wages, with private consumption remaining high, although somewhat more moderate than in 2018. Investment is set to contribute further to the economy’s growth, as more projects co-financed by the EU get underway or progress. The contribution of the external sector to growth is forecast to be more positive in 2019 and 2020 as exports are expected to rebound, while import growth is set to moderate somewhat.

Over the next two years, inflation is expected to decrease somewhat to 2.0% in 2019 and 1.8% in 2020 as a result of base effects with international prices.

The unemployment rate in Bulgaria came close to its pre-crisis low. The Commission expects the unemployment rate to decline further to 5.7% by 2020.According to the Commission the strong fiscal stance will be preserved, expected to lead to sustained budget surpluses over the forecast period. Strong GDP growth and higher wages in the economy are expected to boost tax revenue and balance the expected current expenditure increases. At the same time, EU funds are set to continue finance a large part of public investment growth.

Bulgaria and Double Taxation Avoidance Treaties /DTT/ – A Friendly Tax Regime!

Bulgaria is one of the jurisdictions with a friendly tax regime and has the objective to provide a better business climate with less bureaucratic procedures for small and medium-sized businesses by harmonization of the national legislation with that of the European Union /EU/. 

Recently, Bulgaria has made considerable progress in successful integration of the EU law in its national legislation.

Currently, the number of foreign investors and business entrepreneurs are growing. These foreign businessmen register Bulgarian companies and/or relocate some of their activities in Bulgaria in order to benefit of the friendly business environment, great tax benefits and low business costs.  It goes without saying that this may lead to problems related to the so-called “double taxation”? Double taxation occurs when one and the same taxable entity in two or more countries is subject to the same tax for the same income received and/or property held in the same tax period. The purpose of the Double Taxation Avoidance Treaties (DTT) is to solve these and other problems.

To overcome the negative impact of double taxation, Bulgaria has concluded DTT with more than 75 countries:

Austria Iran Qatar
Albania Ireland Republic of Korea
Algeria Republic Israel Republic of South Africa
Armenia Italy Romania
Azerbaijan Japan Russian Federation
Belarus Jordan Singapore
Canada Kazakhstan Slovakia
China Kingdom of Bahrain Slovenia
Croatia Kingdom of Belgium Spain
Cyprus Kuwait Sweden
Czech Republic Latvia Switzerland
Democratic Republic of Korea Lebanon Syria
Denmark Lithuania Thailand
Egypt Luxembourg Turkey
Estonia Macedonia UAE
Finland Malta Ukraine
France Moldova United Kingdom
Georgia Mongolia USA
Germany Morocco Uzbekistan
Greece Netherlands Vietnam
Hungary Norway Yugoslavia
India Poland Zimbabwe
Indonesia Portugal  

It should be pointed out that in Bulgaria tax treaties are not applied directly. Foreign persons must certify to the National Revenue Agency (NRA) the existence of certain conditions for the application of the relevant treaty by submitting an application form, in particular that he/she is a resident of another country and receives an income from Bulgaria and he/she has no permanent establishment or a fixed base in Bulgaria.

There is also a simplified procedure to prove certain conditions for applying the DTT in force. The conditions for its application are as follows: first, the foreign person must receive an income of up to 500,000 BGN on annual base, then he does not submit a request to the NRA but proves the reasons for applying the relevant tax treaty only to the payer of the income and second, the payer of the income is obliged under article 142 (5) of TSSPC to submit a declaration by the 31st of March of the following year submitting the paid income and provided tax reliefs.

The main advantage of the simplified procedure is that there is no time-limit for issuing an opinion on the application of the DTT (usually it may take up to 60 days) and that the time needed to collect documentary evidences is shorter.            

For more information on application of double tax treaties in Bulgaria, you can contact us here.

BREXIT – happy end or impasse?

After months of negotiation, the UK and EUhave agreed a BREXIT deal.

Exactly at 11 o’clock on Friday, 29 March2019 – UK leave the EU.  It can beextended if all 28 EU members agree, but at the moment all sides are focusingon that date as being the key one.

So BREXIT is definitely happening.

Many questions still have no answer like – Whatare the consequences and what are the advantages? Is BREXIT a “happy divorce”between the UK and EU? What happens after BREXIT?

We will focus the attention to the business development and the agreed free movement of people and goods.

However, let`s say that if no trade deal isin prospect by July 2020, the two sides could agree to extend the transitionperiod instead. Thus, the UK will keep good trade relations with the EU flowingas it does now.

So, we may say that Great Britain will notlose so much from its EU leaving, at least not in. the nearest future. 

In any case, from another point of view –what happens with the UK business if it is strongly connected to other EUcompanies, more popularly speaking – B2B?

For example, let us take the UK freelancerswho have so far successfully done their business with other EU clients? Isthere a solution for them and if yes, what is the best?

Generally speaking, the best is to startdealing by using company incorporated within the EU.

And here is the question – where?

In long, we can say that Bulgaria still keeps the first place on the lowest corporatetax in a European Union – 10% flat rate. But that’s not all that a freelancer is interested in, not at all! Here are few more important benefits:

  • VAT within the EU 0%
  • Dividend Tax within the EU 0-5%
  • Dividend Tax Third countries (Flat) 5%
  • Double taxation avoidance treaties with 80countries, including UK
  • No WTH within the EU
  • Secure bank system.

Acting as a key corridor between Asia and Europe and providing perfect tax environment, Bulgaria may provide many advantages, especially for growing up businesses. 

For more information on how to open a company in Bulgaria you may contact us here

BREXIT – THE TEMPLE OF DOOM

It took British Prime Minister, Theresa May a year and a half to reach a Brexit deal with the European Union.

Britain has the imperfect deal that it was always going to get.

It took less than a month to be clear that the parliament will not approve the proposed Brexit agreement and it is to be lost by a wide margin.

ME Digitization Supports Bulgarian Exports

Bulgarian government supports the digitization of SMEs and increasing the share of digital trade as a strong instrument to increase Bulgarian export.

The Economy Ministry strives to be an active partner of businesses and global leaders in the sphere of ICT. Incentives like joint courses organized with Google which have taught digital skills to 26,000 people are just an example.
Over the past 10 years, more than 1 billion euro was invested in support of SMEs under Operational Programme Competitiveness and Operational Programme Innovation and Competitiveness. A large portion of these funds were intended for the introduction of innovative and technological solutions.

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Running a Business in Bulgaria

When John Hazlewood told one of his advisors he was planning to hire a team of Bulgarians to build and operate his online travel company, the advisor thought he’d lost it, according to Hazlewood. Today, with TheStoreMaker.com up and running, Hazlewood is proving that basing his high-tech business in Bulgaria makes sense. The small country, located near Romania with access to the Black Sea, has a tradition of high-tech skills dating back to when it was a communist nation.

“During communist times, Bulgaria was producing computers,” said Jonathan Kimball, desk officer for Southeast Europe at the Department of Commerce in Washington, DC. “Now, with access to Western technology, their engineers can be highly valuable to American companies. There are opportunities, especially in the high-tech field, because of their highly educated work force. This, combined with the low labor costs and close proximity to Europe, creates many opportunities for U.S. companies in Bulgaria.”

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