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The Buzz in Bulgaria: Interview with Kostadin Sirleshtov of CMS

The Buzz in Bulgaria: Interview with Kostadin Sirleshtov of CMS

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“The third year a Government is in power is when it usually feels the most confident to work on reforms,” says Kostadin Sirleshtov, Managing Partner at CMS in Sofia.” At the moment the Bulgarian Government is stable and active in various sectors, considering the very small possibility of a new election this year.”

Sirleshtov feels like this is the most fruitful period for Bulgaria in several years, as “the EUR 2 billion Turkish stream extension project is underway, as are the final stages of Sofia and Plovdiv airports.” The biggest focus, he says, is on the country’s infrastructure and automotive sectors. “Bulgaria was on the final shortlist for the new Volkswagen factory, the New Green Deal of the EU is driving new opportunities on the market, and even unfortunate events such as the water-supply crisis in Plovdiv have pushed new investment,” he explains.

Turning to the subject of legislative developments, Sirleshtov reports that “there is a big focus on the Rule of Law, prevention of corruption, and anti-money laundering,” and he adds that “new legislation is being adopted as we speak. Changes have also been introduced in the banking sector, mostly considering the consolidation of banks.” He reports that newly-appointed General Prosecutor, Ivan Geshev, has “promised to work on reforms and the implementation of rule of law.”

Sirleshtov is satisfied with the Bulgarian economy, explaining that “the most positive thing is that the Bulgarian Lev has been pegged to the Euro for several years now, which means that every investment is hedged to the Euro, making investors happy.” He adds that the effects of this are already visible, as the country’s real estate and M&A sectors are booming. “The banking sector has seen some large deals, including, most notably, Societe General bank’s acquisition by OTP. Local banks are overly liquid and hence invest a lot.”

According to Sirleshtov, some sectors that were previously less active are expanding as well, including the military and the rail industry, which he says has “attracted some important international players.” While investment is rising, he reports some problems with exits. According to him, “the protection of competition has led some market players to have trouble selling their businesses. This, I think, is a much bigger concern than investment, which is currently on the rise.”

“In our jurisdiction, stability disappears rapidly,” concedes Sirleshtov. “What Bulgaria needs is a stable Government ready to work on reforms. If we wish to join the Eurozone in the next couple of years, we need all actors to understand their jobs and work hard to reach this goal.” Although most remain positive in light of positive trends in various fields and the expectation of even more financing on the market in the future, he cautions that things could come crashing down by “a catastrophic event, such as the shocking 2014 crash of CorpBank.” As a result, he says, “in conclusion, we just hope to continue with the current stability in order for things to work out in Bulgaria.”

CMS at a Glance

Founded in 1999, CMS is a full-service top 10 international law firm, based on the number of lawyers (Am Law 2018 Global 100). With 70+ offices in 40+ countries across the world, employing over 4,800 lawyers, CMS has longstanding expertise both at advising in its local jurisdictions and across borders. CMS acts for a large number of Fortune 500 companies and the FT European 500 and for the majority of the DAX 30. Revenues totalled EUR 1.36bn in 2018.

In Russia, CMS has been supporting its clients since 1992. The Moscow office offers a full range of legal and tax services across 21 practice and sector groups. Over 50 lawyers qualified in Russian, English, French and German law advise international clients on all matters relating to doing business in Russia and CEE, and support Russian companies doing business in Europe and other countries.

Firm's website.