site.btaUPDATED Commercial Counsellor Philippe Kupfer: Austrian Companies Seek Partners, Consider Acquisition Opportunities in Bulgaria

Philippe Kupfer, Commercial Counsellor at the Austrian Embassy, Tuesday said Austrian businesses are seeking partners and are considering acquisition opportunities in Bulgaria. Metalworking, textiles and agriculture are of particular interest, he said at a presentation of the latest Advantage Austria survey of the attitudes of Austrian business in Bulgaria.

This is taking place against the backdrop of nearshoring and friendshoring trends.

Between January and October 2023, Austrian direct investments in Bulgaria totaled EUR 1.312 billion, of which EUR 1.132 billion were reinvestments, Kupfer said.

The event was attended by Bulgarian Chamber of Commerce and Industry President Tsvetan Simeonov, Bulstrad Life Vienna Insurance Group CEO Svetla Nestorova, EVN Bulgaria Board Chairman Alexander Sipek and Kronospan Bulgaria Managing Director Nikolay Bankov, who hosted the event.

The survey found that compared with a year earlier, optimism among Austrian businesses in Bulgaria increased by 10 percentage points to 19%, while 37% of respondents were pessimistic.

Being export-oriented, Austrian business views geopolitics, particularly Russia's war against Ukraine, as the biggest potential risk for business in the next 12 months. The rivalry between the world powers and the danger of an East-West disconnect was ranked as the second most important factor. The third biggest threat stems from changes in existing trade flows and transport routes.

As to taxation in Bulgaria, it is viewed favourably by 81% of Austrian business representatives covered by the survey. "Investment decisions, however, are a much more complex process and taxes are only one of the factors taken into account," said Kupfer. The quality of local suppliers was assessed favourably by 66% of Austrian investors, while just over 25% of respondents disapproved. Timely payment of invoices is also among the strengths of the business environment in Bulgaria for 62% of investors, with 31% take the opposite view.

Asked about labour costs in Bulgaria, 58% of companies assessed them favourably, while 34% did not consider them a competitive advantage.

Austrian businesses, however, are more critical of regulations and the market when asked about red tape, the fight against corruption and crime, the availability of labour, political stability and economic predictability. The predominant opinion on these topics is strongly negative. Yet, Kupfer reported a positive change from the 2022 survey in the attitudes to political stability, which was assessed favourably by 24% of respondents. A positive assessments of the fight against corruption and crime also increased and was shared by 15% of Austrian investors.

Commenting on the availability of labour, Kupfer noted that in nearly 10 years, 1,200 Bulgarian students had benefited from a programme for training of young Bulgarians financed by the private sector and the Austrian government.

Asked about the future introduction of the euro in Bulgaria, 40% of respondents said it would have a positive impact on business and 25% opted for "rather positive". Another quarter of respondents do not expect it to have any impact on their business.