While the Bulgarian political landscape is not exactly what Peterka Partners Partner Plamen Peev would describe as stable, there seems to be notable movement in terms of legislative updates as well as reasons for cautious optimism related to the Bulgarian economy.
"In terms of the political situation, things are not too stable in Bulgaria,” Peev begins. “The political landscape is dominated by two major events – the upcoming parliamentary elections and US sanctions."
Bulgarian parliamentary elections, scheduled for July 11, are extraordinary since the regular April 4 parliamentary elections failed to produce a government."The parliament dissolved after a month or so – it was a rather unprecedented event," Peev says.
And the sanctions imposed by the United States, under the Magnitsky Act, only add to the flame. "The sanctions were imposed on several Bulgarian officials and 64 entities owned or controlled by two of the sanctioned individuals, on account of severe corruption," Peev explains. "It’s quite a massive intervention that was hardly expected by most political players in Bulgaria, let alone society as a whole." While Peev thinks that this might have negative short-term blowback in terms of investments, he also feels that this might lead to corruption being deterred more easily in the long run.
As for the legislative updates, Peev mentions several of note: "A new law on industrial parks/zones has passed aiming at a much clearer legal framework on this topic. Some additional requirements were instituted when it comes to the sale of goods to consumers and the legal treatment of digital content and services. Amendments to the rules on work and residence permits for foreigners have passed as well." He also says that the procedures related to work and residence of foreigners have long been a sore topic for the Bulgarian IT sector, seeing as how "IT companies have long been asking for a more adequate legal framework that would allow for more non-EU talents to enter the market, thus ensuring its growth."
Finally, Peev says that there is room for moderate optimism as to how things are developing in terms of the Bulgarian economy, overall. "Despite the political context described, I’m happy that investors are still considering Bulgaria for their projects. We are currently in touch with businesses planning setting up local subsidiaries in various sectors, such as e-mobility, logistics, consumer goods, industrial repairs," he says. "If you look at the numbers, the Bulgarian economy overall hasn’t been devastated by the crisis and current predictions are being revised to include a more optimistic outlook!," Peev concludes.