Gabrovo, located in the north-central part of the country, is Bulgaria's best city for doing business, showed a ranking compiled by the Sofia-based Institute for Market Economics (IME).
Ruse on the Danube and Sliven in the south are the other two cities that make it into the top three. The three least business-friendly cities are Vidin and Silistra, two other Danube cities, and southernmost Kardzhali.
The "Local Business Conditions 2011" survey is published for a second year and aims to examine the differences in the business climate on a local level.
The criteria are subdivided into the following three major categories- "Taxes and fees", "Administration" and "Economic Activity".
The study includes all 28 administrative districts in Bulgaria, each of them represented by one city, which in most cases is the district capital, ranked by 10 indicators.
The top ten list also contains Vratsa, Botevgrad, Dobrich, Stara Zagora, Montana, Burgas and Varna .Plovdiv and Sofia rank 11th and 12th, respectively.
Kardzhali, which has a large percentage of ethnic Turkish population, is considered to have the worst business climate. The city has very low scores in nine out of ten indicators, corruption in the local administration is estimated as "rampant" and the employment rate is particularly low. The low education levels and the low wages are other problems plaguing the city.
Although it is first in no category, Gabrovo proves to be the best city for doing business because of its low tax rates and efficient administrative service. The only problematic indicator is the corruption in the local administration, which sends Gabrovo as far back as place 24 on that criteria.
According to the IME study, 1/4th of the companies doing business there have given bribes to skew local regulations and ordinances in favor of certain interests.
Gabrovo recently became internationally famous as the place of origin of the family of Brazil's newly-elected President Dilma Rousseff; in the late 19th and early 20th century the city was known as the "Bulgarian Manchester" for its many textile plants and entrepreneurial spirit, and also has the reputation of the world's laughter capital because of the jokes and sense of humor of the local population.
As regards the "local taxes" parameter, small cities perform much better than big ones. The leaders in this category are Vidin and Montana. Targovishte is first by "local fees", with Burgas at the bottom in the category.
The "ownership register" category places Plovdiv at the top, with Ruse scoring worst.
Regarding the corruption scale, Montana, Ruse and Sliven seen as the least corrupt cities, while the city of Sofia, Stara Zagora and Kardzhali are considered the most corrupt.
The employment rate in Sofia is highest, at above 50%, with the lowest score registered in Vidin, at 30%. The only increase in the employment rate is witnessed in Targovishte and Ruse, compared to a decrease of over 10% in Smolyan.
The highest wages are in Sofia-city, followed by Vratsa and Stara Zagora. Vidin is the city with the lowest paid workers.
According to the study, Bulgarians receive and average annual salary of BGN 6 112, or slightly over EUR 3 000.,
Sofia is first in terms of education levels and foreign direct investment, with 46% of its residents being university graduates. In comparison, as little as 14% of the Blagoevrgad citizens have university diplomas.
Nearly 60% of all foreign investment in Bulgaria is concentrated in Sofia.