The Investment Promotion Act (latest amendments effective 2 June 2009) introduced a system of investment promotion measures, in compliance with Commission Regulation (EC) No. 1628/2006 on the application of Articles 87 and 88 of the Treaty to national regional investment aid.

1. Eligibility criteria under IPA

The eligibility criteria are as follows:

The investment must be related to setting-up of a new company, extension of an existing company or activity, diversification of the output of a company or activity with new additional products or to a fundamental change in the overall production process of an existing company or activity;

The following business sectors are eligible: (1. Industry: manufacturing and production of electricity from renewable energy sources; 2. Services: activities in the field of computer technologies, scientific research and development, as well as education and human healthcare);

At least 80 per cent of the future total revenue of the company benefiting from the investment incentive should come from the eligible investment project;
The period for investment implementation shall not exceed three years from the date of commencement of work under the project until the date of project completion;

The total investment in one project should not be lower than the minimum thresholds specified in the Act, with the exception of: 1.) Up to three times lower for the economically disadvantaged regions, provided that the investment is implemented entirely within the administrative boundaries of such a region; 2.) Up to three times lower for investments in certain high technology activities of the industrial sector of the economy, as specified in the Regulations for Application of the Investment Incentives Act; 3.) Up to five times lower for certain investments in high technology activities of the services sector, as specified in the Regulations for Application of the Investment Incentives Act;

At least 40 per cent of the eligible costs of the investment must be financed by the investor's own or borrowed resources, excluding any form of public support;
The investor must create and maintain employment which fulfills cumulatively the following conditions: 1.) the employment shall be directly related to the implementation of the investment project; 2.) the investment project shall lead to a net increase in the number of employees in the establishment/organisation concerned, compared with the average number of employees over the previous 12 months; 3.) the employment created shall be maintained during a minimum period of five years in the case of large enterprise and a minimum period of three years in the case of SMEs;

The investment shall be maintained for a period of at least five years, and in the case of SMEs – three years, effective from the date of its completion;
The tangible and intangible fixed assets acquired shall be new and purchased on an arm’s length basis from parties not related to the investor; and
The investment must meet all other criteria as set out in Chapter One and the special provisions of Chapter Two of Regulation (EC) No 800/2008.
2. Threshold amounts under IPA

Depending on the amount, investments are divided into two classes, with different threshold amounts. The threshold amounts are as follows:

Base case:

Class A: BGN 32 million (?16.3 million);

Class B: BGN 16 million (?8.2 million).

Investment made entirely within the administrative boundaries of municipalities where the rate of unemployment for the year preceding the current year is equal or higher than the national average:

Class A: BGN 16 million (?8.18 million);

Class B: BGN 8 million (?4.09 million).

Investment in high technology activities in the industrial sector:

Class A: BGN 16 million (?8.18 million);

Class B: BGN 8 million (?4.09 million)

Investment in high technology activities in the services sector:
Class A: BGN 11 million (?5.62 million);

Class B: BGN 5.5 million (?2.81 million).

3. Investment promotion measures under IPA

The type of certificate determines the investment class and the rights of the investor under the law. According to the procedure established by the Investment Promotion Act, the key promotion measures are as follows:

Faster administrative services: Class A and Class B;

Personalized administrative services for implementation of the investment project: Class A;

Sale or establishing against consideration of limited real rights on private state or municipal property, without a tender or an auction on market or lower than market prices: Class A and Class B;

Sale or establishing against consideration of limited real rights on plots with constructed physical infrastructure, state property, up to the borders of the site, without a tender or an auction on market or lower than market prices;
Financial aid for construction of physical infrastructure elements: Class A;
Financial aid for training for attainment of professional qualification by the hired staff: Class A and Class B;

Opportunities for other forms of state aid, institutional support, public-private partnerships or joint-ventures – for investment projects of high priority;
Different types of transactions between the investor and a legal entity established for the purposes of construction and development of industrial zones.
4. Priority investment projects

Priority investment projects have been introduced with the latest amendments to the Investment Promotion Act. Priority investment projects are investment projects which are related to all sectors of the economy in accordance with the requirements of Regulation (EC) No. 800/2008 and are particularly important for the economic development of the Republic of Bulgaria or for the regions in Bulgaria.

One or more of the following criteria should be met by the priority investment projects:

The investment amount must exceed at least three times the threshold amount for Class A investment;

The investment must create employment through investments in disadvantaged regions or high technology activities;

The investment must envisage the development of industrial zones with the technical infrastructure necessary for attracting investments under the conditions and according to a procedure specified in the Regulation for Application of IPA;
The investment shall envisage development of high technology parks with the technical infrastructure necessary for attracting of investments in scientific research and/or education and/or information technologies, including innovative activities for technological renovation of production products and technologies under conditions and according to a procedure specified in the Regulations for Application of IPA.

The promotion of priority investment projects shall be made under the conditions and according to a procedure specified under the Regulation for Application of IPA, in accordance with Regulation (EC) No. 800/2008 as a state aid scheme and/or in accordance with the requirements of the State Aid Act.