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By the end of 2015, Bulgaria's absorption of European funds for the 2007–2013 programming period will reach 93% of EU allocations.
Drawing on experience from the previous economic programming period, a high absorption rate of around 90–95% of Bulgaria's European allocations was forecast for the 2014–2020 European Funds, some already operational, confirming the economic system's potential and efficiency.
Bulgaria has a highly diversified economy. Its traditional sectors include services, accounting for over 60%, followed by industry, representing around 20% of GDP, and agriculture.
The tertiary sector is undoubtedly the economic sector that has experienced the greatest growth in Bulgaria in recent years.
Tourism-related sectors are equally attractive, thanks to the range Bulgaria offers: winter tourism in its various ski resorts, summer tourism at Black Sea coastal resorts, and spa and food-and-wine tourism, both popular with visitors. Numerous hunting reserves are available for enthusiasts.
The real estate sector is also growing steadily. Since the end of the property bubble in 2009, sales have been increasing consistently and property prices have begun to rise again. Many European and non-EU investors have made and planned significant investments in real estate. It is also worth recalling that the foreign investment law gives foreign investors enhanced protection against expropriation of land for public purposes. The first additional protection mechanism for foreign investors rests on expropriation being permitted only exceptionally, to meet essential state needs that cannot otherwise be satisfied. Real estate owned by foreign persons cannot be expropriated for municipal needs.
For these reasons and other economic and financial considerations, the country has shown a strong ability to attract foreign investment.
Italy is a strong trading partner for Bulgaria thanks to substantial economic exchanges that place Italy fourth in foreign investment in Bulgaria.
Italian businesses operate both indirectly through purchases and sales and, increasingly, by forming companies under Bulgarian law.
The supply of products, equipment, technology and services, and the execution of works financed by European funds, including infrastructure such as railways and motorways, are among the most common economic transactions.
Bulgaria is a signatory to the system of bilateral treaties for the promotion and reciprocal protection of foreign investment. In addition to national treatment, this system provides most-favoured-nation treatment for investments made by entities and individuals of one contracting country in the territory of the other. In particular, the principle of the priority of international treaties applies: where international treaties signed by Bulgaria provide more favourable terms and conditions for foreign investment, those rules take priority over local rules. This guiding principle is expressed in foreign investment protection treaties and, in particular, in agreements for the avoidance of double taxation. International treaties on reciprocal protection of foreign investment always rely on a broader concept of foreign direct investment (FDI), and application of that concept must take priority over Bulgarian legislation.
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