Bulgaria Trade


  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

According to the available data of the National Statistical Office of Bulgaria, the volume of trade with the EU in 2020 was, of which exports represented BGN 3 billion (EUR 18.3 billion), which was 4.2% less than in 2019, and imports BGN 3 billion (EUR 18.7 billion, down 9.2%). The deficit fell to BGN 73 million (EUR 377 million, down 75%) in 2020.

  • Allcountrylist: Overview of major industries in Bulgaria, including mining, construction, transportation, tourism, and foreign trade.

The share of exchange with the EU in the total volume of foreign trade was 63% in 2020.

Trade relations with the Czech Republic

Economy and trade are an important area of ​​mutual relations. Since 2015, the business turnover exceeds EUR 1 billion and has a gradually increasing tendency. The balance of the trade balance has been positive for a long time, its decline has stopped in recent years. The development of mutual trade in 2021 exceeded the record volume of 2019 so far, indicating the resumption of a positive trend after the COVID-19 pandemic. Exports from the Czech Republic amounted to EUR 1,03 million in 2021 (which represents an increase of 17.5% year-on-year), imports from Bulgaria EUR 67 million (+3.1%), turnover EUR 1,707.3 million. EUR (+ 11.4%) and the balance in favor of the Czech Republic increased to EUR 35million (+ 59.9%).

Czech exports continue to be dominated by engineering products such as means of transport and their parts, energy, electrical and electronic devices, pharmaceuticals, and textile raw materials. Electrical and electronic devices and components, pharmaceuticals, and parts for the automotive industry are mostly imported into the Czech Republic. Last year, of the main items in Czech exports, food and animals (+2.4%) and chemicals (+10%) showed the highest growth, while mineral fuels (-39.4%), beverages and tobacco (-27.4%) and machinery and means of transport (-9.3%). On the Bulgarian side, food and live animals (+10.7%), beverages and tobacco (+14.7%) and chemicals (+6.6%) reported the highest increase, machinery and means of transport fell the most (-8%).

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 17.3 18.9 19.9 18.8 23.2
Imports to the Czech Republic (billion CZK) 12.4 16.1 16.2 14.6 14.6
Balance with the Czech Republic (billion CZK) 4.9 2.8 3.7 4.2 8.6

Source: CZSO

Foreign direct investment

Foreign direct investment (FDI) status in the country

According to the BNB, foreign direct investment in Bulgaria reached a net inflow of EUR 1,26million (1.9% of GDP) in 2021, which means a decrease of EUR 1.73 billion (58%) compared to 2020 (3 billion EUR, 4.9% of GDP).

The largest net investments in this period came to Bulgaria from Luxembourg (EUR 552 million), Germany (EUR 27million), Austria (EUR 24million) and Belgium (EUR 18million), the largest outflow reported by Russia (-349 million EUR) and Switzerland (-137.1 million EUR) and the Czech Republic (-89.8 million EUR).

At the end of 2020, the biggest share in the sectoral structure of FDI outside the financial sector was the trade and repair of cars and motorcycles, as well as real estate, energy, advertising, production of rubber, plastics, etc.

Status of Bulgarian foreign direct investment (FDI) abroad

The net flow of investments from Bulgaria abroad reached EUR 12 million in 2021, compared to EUR 21million in 2020. The total value of Bulgarian FDI at the end of 2021 was EUR 2,89million, the largest volume reported by Romania ( EUR 35million), followed by the Marshall Islands (EUR 25million), Serbia (EUR 21million), Greece (EUR 21million), Italy (EUR 18million), USA (EUR 178.8 million), the Netherlands (EUR 169.2 million), Moldova (EUR 16million) and Germany (EUR 14million).

Investment environment and barriers

Many investors continue to see Bulgaria as an attractive low-cost investment destination with government incentives for new investment. The country offers one of the cheapest labor forces in the European Union (EU) as well as low and flat income and business taxes. However, Bulgaria has the lowest labor productivity rate in the EU and in the medium term, productivity is further threatened by a rapidly shrinking population.

There are no legal restrictions on foreign ownership or control of firms. With some exceptions, foreign entities receive the same treatment as domestic firms and their investments are not screened or otherwise restricted.

However, foreign investors remain concerned about the rule of law in Bulgaria. In addition to endemic corruption, investors cite other problems that prevent investment, including difficulty in obtaining the necessary permits, unpredictability due to frequent changes in laws and legislation, attempts to invalidate long-standing government contracts, and an ineffective judicial system.

Key indicators and position of Bulgaria in international rankings:

  • Transparency International Corruption Perceptions Index – 78th out of 180 in 2021 (score 42/100, down two places)
  • Doing Business World Bank – 61st out of 190 countries in 2020
  • Global Innovation Index – 35th out of 129 countries in 2021 (up two places)

Direct foreign investments of the Czech Republic in Bulgaria

In 2021, according to BNB data, there was an outflow of Czech FDI from the country in the amount of EUR 89.8 million, and the total volume reached the level of EUR 63million.

The Czech Republic is an important foreign investor in Bulgaria, especially in the field of energy and, more recently, telecommunications and media. In recent years, there have been two major investments (2018 and 2020), when in both cases the PPF Group purchased the assets of the Norwegian mobile operator Telenor for approx.

In 2004, CEZ Group privatized regional distribution companies in the west of the country (including Sofia). After their restructuring, ČEZ owned 67% of the distribution group ČEZ Razpredelenie Bulgaria and ČEZ Elektro Bulgaria, which ensures the sale of electricity to customers. In 2006, the ČEZ group privatized the thermal power plant in Varna. It was sold to a Bulgarian buyer at the end of 2017 (approx. EUR 50 million). A few years after privatization, ČEZ began to face problems caused mainly by the non-market environment in the country and the attempt to solve social problems by artificially keeping electricity prices low. This led to a general worsening of the situation in the field of energy, and problems were often solved at the expense of foreign investors. In 2013, proceedings were initiated to revoke CEZ’s license, but it was terminated without a decision. The company is currently conducting arbitration proceedings with the Bulgarian state. In June 2019, ČEZ agreed on the sale of its assets with the Bulgarian financial holding Eurohold. The price of the transaction was EUR 335 million (approx. CZK 8.6 billion). The sale was completed in July 2021, ČEZ withdrew from the local market and Eurohold has now also changed the company’s name and logo.

Energo-Pro Svitavy, which entered the Bulgarian market in 2000, is also active in the energy sector. The company gradually purchased 14 hydroelectric power plants with an installed capacity of 166 MW. In 2012, the company bought about 1/3 of the electricity from the German E.ON for EUR 133 million. distribution of land in the north-eastern part of Bulgaria. This company is not yet considering its exit from Bulgaria, although it is facing similar problems as CEZ. This company also started arbitration proceedings against the state (before ČEZ), as did the Austrian EVN, which holds the remaining third of the distribution in the country.

In 2018, the PPF Group bought Bulgarian assets from the Norwegian mobile operator Telenor (the contract also included Telenor’s assets in Hungary, Serbia and Montenegro, in Bulgaria it is now operating under the Yettel brand). It is estimated that the Bulgarian part represented approx. EUR 700-800 million. PPF was also interested in entering the Bulgarian media market. In February 2018, it agreed to buy the TV station Nova Broadcasting from the Swedish Modern Times Group (MTG). However, in July 2018, the Bulgarian regulator KZK blocked this sale, as in the case of ČEZ. However, PPF took control of TV station bTV after gaining control of parent company CME in October 2020.

Other significant investors in the country include BTL Industries (production plant in Plovdiv and research in Sofia, medical equipment), Korado (radiator production), Hronovský (automotive industry), AŽD (railway security), etc.

According to BNB data, Bulgarian investments in the Czech Republic fell by EUR million in 2021 and amounted to EUR 17 million.

FTAs and treaties

Treaties with the EU

Bulgaria is a member of the EU and therefore does not directly negotiate free trade agreements, they are negotiated on behalf of the entire EU by the European Commission.

Contracts with the Czech Republic

The contractual basis with Bulgaria does not lack basic contractual documents to ensure bilateral economic activities. Mutual trade between CZ and BG has been subject to the rules and conditions of the EU single market since BG joined the EU. Bilateral contractual relations (without the regime of mutual trade) in the area of ​​economic cooperation are based on the Treaty on Friendly Relations and Cooperation between the Czechoslovak Republic and the Czech Republic, which was signed on April 6, 1992. Other important documents for the development of economic relations include the Agreement between the Government of the Czech Republic and the government of the Czech Republic on mutual support and protection of investments and the Agreement between the Czech Republic and the Czech Republic on the avoidance of double taxation. In 2004, the Ministry of Industry and Trade of the Czech Republic and the Bulgarian Ministry of Economy, Energy and Tourism signed a Cooperation Agreement, on the basis of which the Mixed Working Group was established, which meets for (more or less) regular consultations; it last met in April 2022 in Prague.

Developmental cooperation

Bulgaria is not a recipient of development aid.

Development aid provided

Bulgaria has been providing development assistance and cooperation since its accession to the EU in 2007 with two main objectives:

  • fulfill international obligations in the form of assistance to less developed countries and promote sustainable development on a global scale
  • to fulfill obligations at the regional level, thereby contributing to the development of neighboring economies in the transition period, including the sharing of experience.

Bulgaria’s development aid increased slightly in the last decade, although there were continuous fluctuations. Most of the development aid is concentrated in the Western Balkans and the Black Sea region, while humanitarian aid goes mainly to regions that suffer from the consequences of long-term crises and conflicts, such as Afghanistan, Iraq, Syria or Yemen.

In 2020, according to the OECD, it was 0.126% of GDP, i.e. 81.57 million USD. A year later, Bulgaria’s contribution decreased to 0.121% of GDP, although it nominally increased to 86.19 million USD.

The government has set itself the task of increasing ODA to the level of 0.33% of GDP by 2022 and to 0.7% by 2030.

According to available data from OECD sources, Bulgaria provided approximately 14% of funds on a bilateral basis and 86% on a multilateral basis (mainly through EU institutions). In the bilateral area, the largest recipient of ODA was Turkey ($million), followed by Serbia ($0.6 million), the Republic of S. Macedonia ($0.5 million), Moldova ($0.5 million), Bosnia and Herzegovina and other countries.

Possibility of involvement of Czech companies

Given that the Czech Republic and Bulgaria largely share the territorial focus of bilateral development aid (especially the Western Balkans), there is a certain potential for mutual cooperation and synergy, however, in view of the still underdeveloped ODA delivery system and limited budget, this is not a significant resource opportunities.

Prospective fields of study (MOP)

Defense industry

The Bulgarian army faces a long-term problem of insufficient funding and inefficient use of resources. The equipment is outdated, often still from the Warsaw Pact and Soviet provenance. The deteriorating security situation in the region and on a global scale calls for investments in the modernization of the air force, air defense, ground forces, navy and special forces more and more urgently.

Healthcare and pharmaceutical industry

The Bulgarian healthcare system has a well-dimensioned capacity of beds and hospital facilities, which had a positive effect during the COVID-19 pandemic. However, the weakness is the lack of qualified personnel, outdated equipment, lack of modern devices. In addition to the urgent need for investments in equipment, the digitization of the healthcare sector, where Czech solutions can be applied, also requires attention. Healthcare is also one of the priority areas within the National Recovery and Resilience Plan, where financial resources for the implementation of the proposed measures will be secured after EC approval.

Rail and rail transport

Railway transport in Bulgaria also suffers from underfunding and is in urgent need of modernisation. Under the previous government, it was possible to solve the acute problems with the indebtedness of the state railways. This made it possible to launch delayed and necessary investment projects. BDŽ purchased new Siemens locomotives, modernization of railway wagons and existing locomotives is underway. A significant amount of resources, including EU funds, goes into the construction and modernization of tracks and their security.

Water management and waste industry

The situation in the Bulgarian water sector is very problematic. The country is dealing with disproportionately high losses in the supply of drinking water, there are also outages in supplies for the population and industry (the most striking case took place at the turn of 2019 and 2020 in the city of Pernik), and in some areas there is even a threat of drought. Problems with the pollution of water sources persist, the construction of an adequate number of wastewater treatment plants and drinking water treatment plants has not yet been completed. Experts also warn against the deteriorating technical condition of water reservoirs, lakes and dams.

Energy industry

Bulgaria’s energy mix is ​​largely similar to the Czech one, and the country is also dealing with similar problems. These are mainly challenges related to energy security (ensuring energy supplies, dependence on gas supplies from Russia), fulfillment of the Green Deal plan (transition from coal mining and burning), low efficiency of electricity production, etc. The government is also addressing a key issue related to nuclear energy industry – completion of another block(s) at the Kozloduj NPP and possibly whether to build a new nuclear power plant in Belene. In Bulgaria, there is also an interesting potential for the development of renewable energy sources – starting with photovoltaics, wind power plants and geothermal sources.

The current edition of the Strategic Opportunity Map with information on the Bulgarian market can be found here.

Bulgaria Trade