With the interim government firmly in charge until the upcoming elections take place, Bulgaria is experiencing strong economic wind in its sails, according to Wolf Theiss Partner Richard Clegg.
“Politically, Bulgaria is going through a change right now,” Clegg begins. “An interim government is in place and a third set of elections are expected before the end of the year.” But, even with that said, the country has been experiencing positive movement. “Bulgaria, maybe due to its positioning, has seen investments coming from all over the globe over the last 18 months, particularly from the US – more so than before – and it has been really positive,” Clegg continues. The US is currently a major source of capital investments. “Institutional capital from the US into technology and manufacturing companies brings with it know-how, expertise, and access to international markets. Also, it brings a certain stability to the business climate in the country and connects Bulgaria to the rest of the world, on a macro level,” he says.
Clegg says that, over the last several years, Bulgaria has established itself as prime real estate for startups and that it is now reaping the rewards. “We see that there are now a sufficient number of startups reaching Series B or Series C investment stage, which has generated more interest from other venture capital funds and, of course, a lot of legal work as well,” he says.
Additionally, Clegg reports an uptick in the number of corporate transactions. “We see investments coming in a variety of different sectors – building up production facilities and entire teams. The capital that’s being committed to the country in this cycle seems to be longer-term capital, which is benefiting the economy across all sectors, including the legal market, as there is additional higher-value ongoing work in areas such as employment and IP.”
Finally, Clegg says that all of this is showing through significant projects. “The concession project for the Sofia airport recently saw a strong consortium of commercial and IFIs, including the EBRD and the EIF – a sign that interest in financing strategic infrastructure is generally strong,” he says. “Also, financial services are booming – not just in traditional funding, but also in terms of fintech – market players are preparing for the future and the number of transactions is rising.”
Clegg underlines, in conclusion, that the Bulgarian economy seems to be on the up and up. “In many areas the economy is advancing from being only a low-cost option, and is building things from the ground up,” he says. “R&D, engineering… people are building value in many sectors, far more and beyond basic outsourcing work – which is a very positive sign.”