Alexander Schinzing: More German Firms Move Base to Low-Tax Bulgaria

Alexander Schinzing, assessor iuris, is ETCs Corporate Counsel focused on UK and German business. He studied law and specialized in European law. ETC: Excellent Tax&Corporation Management a network of international attorneys and tax counsels, is an English tax and law office within the network of international tax consultants and lawyers (LowTax Network International, http://www.lowtaxnet.org/english/index.html), focusing, in particular, on international tax planning for natural and legal persons.

What prompts German businessmen to set up companies in Bulgaria or relocate here? Are low taxes, a 2-lev initial capital, low costs and low social security contributions a sufficient condition for setting up a business here?

As an international network of tax and legal advisors we recognize that a growing number of European companies are shifting their place of business to Bulgaria. Ever increasing taxes and social contributions make low tax jurisdictions like Bulgaria a more and more attractive country. The latest increases in health insurance contributions by 0.6% to 15.5% in Germany or Value-Added-Tax by 2.5% to 20% in the United Kingdom from 2011 on are just two examples why our clients choose Bulgaria as their new place of business.

A taxation level of 10% on corporate income and income is one of the lowest in the EU. Adding 62 double-taxation-agreements with other countries and further tax exemptions as well as investment incentives make Bulgaria a business place to be.

Has this trend seen a boost in the last couple of years? Is there an increased interest by German companies? Why?

Since the accession of Bulgaria to the European Union we notice that German and UK businesses have a growing interest in the markets of the southern and eastern boundaries of the EU from Estonia in the North to Bulgaria in the South. Next to the previous advantages, a high level of professional education and improving infrastructure are in the focus of our clients.

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