Organizer: Internet Securities Inc.
Welcome Remarks: H.E. James Warlick, US Ambassador to Bulgaria
Speaker: Mr. Kenneth Lefkowitz, Managing Partner at New Europe Corporate Advisory
In presenting his report to management in June 2003, Jørgen Vig Knudstorp, then head of strategic development had pulled no punches, “We are on a burning platform, losing money with negative cash flow and a real risk of debt default which could lead to a break up of the company. In 2013, LEGO reported profits of $1.5 bn on sales of $4.5 bn. Quite a turnaround! Here's how.
-Conducted an audit of an existing company’s digital marketing
strategy.
-Developed criteria for the audit that is appropriate to the sector and
industry and applied those criteria to assess the digital marketing capabilities of the
company.
-Followed the company throughout the semester; signed up
for e-newsletters, etc. Observations lead to recommendations.
In presenting his report to management in June 2003, Jørgen Vig Knudstorp, then head of strategic development had pulled no punches, “We are on a burning platform, losing money with negative cash flow and a real risk of debt default which could lead to a break up of the company. In 2013, LEGO reported profits of $1.5 bn on sales of $4.5 bn. Quite a turnaround! Here's how.
-Conducted an audit of an existing company’s digital marketing
strategy.
-Developed criteria for the audit that is appropriate to the sector and
industry and applied those criteria to assess the digital marketing capabilities of the
company.
-Followed the company throughout the semester; signed up
for e-newsletters, etc. Observations lead to recommendations.
Investment opportunities in Kosovo - FDI perceptions UBT University
Foreign Direct Investment (FDI) is an important source of capital and economic growth for developing countries. It provides a package of new technologies, management techniques, finance and market access for the production of goods and services. However, attracting FDI is a major challenge for host countries as it opens the challenge of identifying the major factors that motivate and affect the decision for FDI location.
In this context, this study aims at learning the perception of foreign companies and business associations regarding the business environment and the investment climate in Kosovo. Additionally it tries to understand what do they latter consider to be the strongest potentials that Kosovo provides, and the areas that need to be improved.
Finally, the results from the questionnaire taken with existing foreign investors, interviews with business associations and analyses of the World Bank report “Doing Business2011” will be the main focus of this project. The results of this study aims to give a clear picture of motivations, concerns and suggestions for improving the investment and business environment in Kosovo.
This is the presentation I gave for the event that took place on Tuesday 17 January at the War Museum, and was moderated by Ioannis Stournaras , Professor at the University of Athens and General Director of IOBE.
It was organised by ELIAMEP, IOBE, Kantor and Citizens’ Movement and was entitled:
“Investments, Development, Unemployment”
Speakers were:
Andreas Andreadis, President of the Association of Greek Tourism Enterprises
Efthymios Vidalis, President of the Board for Sustainable Development of the Hellenic Federation of Enterprises
Nikos Zonzilos Scientific Advisor of IOBE
Dimitris Papalexopoulos Managing Director of S.A. Titan
Abraham Tsoukalidis President of Positive Energy
China’s Belt and Road Initiative and Bilateral InvestmentAEPF
Professor Lee Jones in this PPT shows the bilateral investments along the Chinese Belt and Road Initiative. The PPT shows through data and graphs the levels and impacts of these investments.
This lecture reviews options for international entry strategy. Common entry modes such as exporting, licensing, franchising, etc. are reviewed. We discuss in depth the pitfalls of exporting, and highlight important tools such as a letter of credit and bank intermediaries in foreign trade. We conclude the lecture with a review of foreign direct investment (FDI) and the pros and cons of such an approach.
The Pan-European IT Outsourcing Intelligence Report 2011 presents the summary of the All-European IT Outsourcing and In-House Software Development research conducted between February and December 2011. In the course of the research the following European countries were surveyed (in alphabetical order): Austria, Cyprus, Denmark, Finland, Malta, Norway, Sweden, Switzerland, Netherlands and United Kingdom.
The key goal of the Report is to identify the differences and similarities in the ways how companies from the above listed countries behave in terms of:
Overall adoption of IT / software development outsourcing services
Choosing their IT outsourcing destinations
Choosing their IT outsourcing service providers
Responding to the most critical outsourcing challenges
Managing their vendor relationships
Cost saving
Planning their future adoption of IT / software development outsourcing services
Latest development on foreign trusts taxation in Italy according to the Finance act tax bill 2020. Input statement delivered in Singapore, October 18th 2019
FInancial Industry infomercial for CEE & Poland 4/2012Outbox
FICO (NYSE:FICO), the leading provider of analytics and decision management technology, and Outbox, one of the leading consulting companies specializing in the implementation of CRM solutions, today announced that they have signed an agreement to bring next generation analytics and decision management technology to Polish banks and financial institutions. The partnership, announced today at the 8th Annual CEE Credit Risk Management conference in Warsaw, will focus on helping Polish businesses use FICO’s industry-leading solutions and tools to improve and optimize the entire credit lifecycle: marketing, origination, customer management, fraud and collections/recovery.
First came FATCA, now comes the Automatic Exchange of Information: is it just...sgarazi
Management of Regulatory Projects:
First came FATCA, now comes the OECD's Automatic Exchange of Information: is it just "copy & paste"? Which challenges exist?
Investment opportunities in Kosovo - FDI perceptions UBT University
Foreign Direct Investment (FDI) is an important source of capital and economic growth for developing countries. It provides a package of new technologies, management techniques, finance and market access for the production of goods and services. However, attracting FDI is a major challenge for host countries as it opens the challenge of identifying the major factors that motivate and affect the decision for FDI location.
In this context, this study aims at learning the perception of foreign companies and business associations regarding the business environment and the investment climate in Kosovo. Additionally it tries to understand what do they latter consider to be the strongest potentials that Kosovo provides, and the areas that need to be improved.
Finally, the results from the questionnaire taken with existing foreign investors, interviews with business associations and analyses of the World Bank report “Doing Business2011” will be the main focus of this project. The results of this study aims to give a clear picture of motivations, concerns and suggestions for improving the investment and business environment in Kosovo.
This is the presentation I gave for the event that took place on Tuesday 17 January at the War Museum, and was moderated by Ioannis Stournaras , Professor at the University of Athens and General Director of IOBE.
It was organised by ELIAMEP, IOBE, Kantor and Citizens’ Movement and was entitled:
“Investments, Development, Unemployment”
Speakers were:
Andreas Andreadis, President of the Association of Greek Tourism Enterprises
Efthymios Vidalis, President of the Board for Sustainable Development of the Hellenic Federation of Enterprises
Nikos Zonzilos Scientific Advisor of IOBE
Dimitris Papalexopoulos Managing Director of S.A. Titan
Abraham Tsoukalidis President of Positive Energy
China’s Belt and Road Initiative and Bilateral InvestmentAEPF
Professor Lee Jones in this PPT shows the bilateral investments along the Chinese Belt and Road Initiative. The PPT shows through data and graphs the levels and impacts of these investments.
This lecture reviews options for international entry strategy. Common entry modes such as exporting, licensing, franchising, etc. are reviewed. We discuss in depth the pitfalls of exporting, and highlight important tools such as a letter of credit and bank intermediaries in foreign trade. We conclude the lecture with a review of foreign direct investment (FDI) and the pros and cons of such an approach.
The Pan-European IT Outsourcing Intelligence Report 2011 presents the summary of the All-European IT Outsourcing and In-House Software Development research conducted between February and December 2011. In the course of the research the following European countries were surveyed (in alphabetical order): Austria, Cyprus, Denmark, Finland, Malta, Norway, Sweden, Switzerland, Netherlands and United Kingdom.
The key goal of the Report is to identify the differences and similarities in the ways how companies from the above listed countries behave in terms of:
Overall adoption of IT / software development outsourcing services
Choosing their IT outsourcing destinations
Choosing their IT outsourcing service providers
Responding to the most critical outsourcing challenges
Managing their vendor relationships
Cost saving
Planning their future adoption of IT / software development outsourcing services
Latest development on foreign trusts taxation in Italy according to the Finance act tax bill 2020. Input statement delivered in Singapore, October 18th 2019
FInancial Industry infomercial for CEE & Poland 4/2012Outbox
FICO (NYSE:FICO), the leading provider of analytics and decision management technology, and Outbox, one of the leading consulting companies specializing in the implementation of CRM solutions, today announced that they have signed an agreement to bring next generation analytics and decision management technology to Polish banks and financial institutions. The partnership, announced today at the 8th Annual CEE Credit Risk Management conference in Warsaw, will focus on helping Polish businesses use FICO’s industry-leading solutions and tools to improve and optimize the entire credit lifecycle: marketing, origination, customer management, fraud and collections/recovery.
First came FATCA, now comes the Automatic Exchange of Information: is it just...sgarazi
Management of Regulatory Projects:
First came FATCA, now comes the OECD's Automatic Exchange of Information: is it just "copy & paste"? Which challenges exist?
Similar to Doing Business in Bulgaria: Challenges and Opportunities from a Foreign Investors\' Perspective (20)
Doing Business in Bulgaria: Challenges and Opportunities from a Foreign Investors\' Perspective
1. 27 January 2011
DOING BUSINESS IN BULGARIA
Challenges and Opportunities
from a Foreign Investors’ Perspective
Presentation by Kenneth Lefkowitz
Managing Partner
New Europe Corporate Advisory
1
4. Overview of FDI in Bulgaria over the years
What has been attracting investors so far?
• EU membership and harmonizing legislation
• Currency board and fixed exchange rate
• Growth of domestic consumption
• Before the crisis: real estate, retail, tourism
• Currently: energy sector
€10,000 €5,000
EUR Foreign direct investments GDP per capita
billions
€8,000 €4,000
€3,000
€6,000
€2,000
€4,000
€1,000
€2,000
€-
€-
Source: BNB, Unicredit
4
5. What are the challenges and opportunities ahead
Challenges
1. Regulatory instability
2. Corruption
3. Poor institutional infrastructure
4. Small market
Opportunities
1. European Union and geographic location
2. Low taxes
3. Labor force
5
7. Challenges to foreign investors
#1 Regulatory instability
• Lack of a vision and long-term strategic objectives to shape
regulation. Laws are dictated mostly by EU, which results in
patchwork legislation imposed over outdated texts.
• Policy making is often either too general, or incomplete, or not
entirely economically justified.
• Treatment of foreign investors varies significantly between
the different governments, along with the list of “preferred”
countries.
• Transparency of decision-making is sometimes questioned. It
is often unclear how drafts are prepared and why certain
revisions have been made.
• Communication with interested stakeholders, although
improving, has further potential for development.
7
8. Challenges to foreign investors
#2 Corruption
• Corruption ultimately destroys value for everyone involved.
• Fair-play becomes a competitive disadvantage for certain
investors who refuse to bribe. The Foreign Corrupt Practices
Act (US) and the Bribery Act (UK) could be devastating to
multinationals’ reputations - but they police fair practices where
local authorities fail to do so.
• No visible improvement in fight against corruption over the
last decade. Bribing is perceived as “business as usual”. The
longer this mindset remains, the harder it will be to eradicate it.
7.0
6.5
6.0
Estonia
Poland
5.5
5.0
Czech Republic Corruption Perceptions Index,
as measured by Transparency International.
4.5 Scores range from 0 (most corrupt) to
10 (least corrupt)
4.0 Bulgaria
3.5
3.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Transparency International
8
9. Challenges to foreign investors
#3 Poor institutional infrastructure
• Education is unsatisfactory. Local universities provide
education that does not satisfy the requirements of the market.
Innovation is now mainly imported, not fostered locally.
• The legal system is unreliable and too cumbersome to be able
to protect well the rights of citizens and businesses.
• Physical infrastructure is poorly maintained (although
improving) and does not correspond to the needs of the
population.
• Bureaucratic government apparatus is a challenge for most
businesses. Generally, issuing permits, paying taxes, and
trading across EU borders are the most problematic areas.
Electronic applications and submissions are not used to their
full potential.
9
10. Challenges to foreign investors
#4 Small market
• Limited physical market – Bulgaria has just 7.5 million
inhabitants (and decreasing).
• Low purchasing power of the population. Bulgaria is the
lowest-wage EU country, with the lowest GDP per capita. This
means that introducing new products and services has limited
potential. From the perspective of a large foreign investor, the
fixed cost of expanding is not always justified for such a small
market.
• Demographic problems which started from emigration and
which a negative birth rate exacerbates further. The population
is quickly aging, which additionally shrinks most markets.
10
12. Opportunities for foreign investors
#1 EU and geographic location
• European Union candidature and membership have proven
invaluable for:
• Improving local legislation and administration.
• Securing funding for private and public projects that would
have otherwise been unavailable.
• Reducing customs formalities, which will be completely
eliminated with entry in the Schengen area.
• Diminishing political and regulatory risks.
• Minimal exchange rate risk, due to currency board and
promised eurozone membership, is a major advantage over
other countries with similar economic profiles.
• Geographic location between Turkey and Europe is important
both as a transit route and as a potential for future growth.
Bulgaria is likely to benefit in the mid to long term from Turkey’s
growth. Bulgaria is also important for the development of the
Balkan countries.
12
13. Opportunities for foreign investors
#2 Labour force
• Well-educated generation Y workforce. Much of the
population born after 1980 has gone to study abroad for higher
education. The combination of visa requirements and economic
crisis has urged many of them to come back. This workforce is
usually flexible, multilingual, and is available for a fraction of the
cost of their counterparties in EU15.
• Language skills are usually strong among all age groups of
the urban population.
• Strong legacy in mathematical fields. Bulgarians deservedly
have an excellent reputation in subjects such as mathematics,
engineering, and information technology. This has resulted in
many firms setting up outsourcing centers in Bulgaria.
• Low costs of employment. Bulgaria has the lowest nominal
wages among EU 27. Laws also mandate low health security
contribution and a modest employer contribution to social
security.
13
14. Opportunities for foreign investors
#3 Low tax rates
• Corporate income tax of just 10%, or 0% in areas with high
unemployment.
• Personal income tax of 10%
• VAT exemption of 2 years for imports of equipment for
investment projects over € 5 million, creating at least 50 jobs
• Depreciation of 2 years for computers and new manufacturing
equipment
• Opportunity to write-off R&D expenditures
• 5% withholding tax on dividends and liquidation quotas (0%
for EU tax residents )
• No restrictions on after-tax repatriation of profits
• Few taxes were raised during the crisis, unlike in neighboring
Romania and Greece.
Source: Invest Bulgaria Agency
14
16. Doing Business in Bulgaria: Challenges and opportunities from Foreign Investors’ Perspective
Conclusion
Unfortunately, challenges remain because:
• Regulatory framework remains largely fluid and unpredictable.
• Corruption is rampant in all areas of life and perceived as
something normal.
• Institutions are in most cases weak and fail to protect or
educate its citizens
• Bulgaria is a tiny country with aging population, which results in
a very small market for most products
But on the bright side, opportunities come from:
• European Union membership, which promises constant
improvement of legislation, a common currency, facilitated
border control, and free movement of capitals.
• One of the most favorable tax regimes in Europe
• Labor force, which is often well skilled, multilingual, foreign-
educated, and comes cheap.
16
17. Thank you for your attention
Questions?
KENNETH LEFKOWITZ
Managing Partner
New Europe Corporate Advisory Ltd.
9 Narodno Sabranie Square, Sofia 1000, Bulgaria
tel.: +359 (2) 988-7390
mob.: + 359 888 637-053
fax: +359 (2) 981-6206
web: www.necadvisory.com
e-mail: kenneth.lefkowitz@necadvisory.com
17