Austrian businesses are looking for Bulgarian companies to invest in

Austrian companies are still looking for partners – companies with which they can work together or even invest at a later stage, said Philip Kupfer, commercial counselor at the Embassy of Austria in the Republic of Bulgaria.

From our daily experience at Advantage Austria (ed. note - the name of the Austrian sales office), I can say that interest in Bulgaria remains stable," said Kupfer.

His comment was made during an event presenting the annual survey among Austrian businesses on their attitudes towards the Bulgarian investment climate.

According to the results, there is a slight improvement in attitudes regarding the business environment here over the next 12 months, but most respondents (54%) do not expect a change.

According to them, the business climate will remain unchanged, there is less skepticism and a little more optimism," said Kupfer.

Specifically, there are more positive attitudes regarding expectations for investment volumes, number of employees, and capacity utilization.

Among the biggest advantages of the Bulgarian business landscape are access to funds, and the quality and availability of local suppliers – however, the undisputed leader is the low taxes.

75% of respondents say that taxes are favorable. The 10% flat tax is very attractive and has always been among the leading advantages for Austrian businesses in recent years," said Kupfer.

But he warned that an investment decision is based on multiple factors, and low taxes can only support these.

At the same time, a diminishing positive is the local labor costs.

Wages in Bulgaria are still competitive. However, in the last 2.5 years we have seen a sharp increase at double-digit rates and over 50% of respondents say that low wages are no longer an advantage for them," said the trade advisor.

Political instability is disadvantage number one

The biggest drawback according to Austrian businesses in Bulgaria is the lack of political stability. 96 of the surveyed companies gave a negative assessment of this indicator.

However, Kupfer pointed out that the survey was conducted at the end of December, and the new regular government had not yet been formed.

Investments are closely linked to trust, and trust is one of the most important currencies in the business world. And since international companies follow multi-year plans that are closely monitored, they are very sensitive to instability and sudden changes in legislation," the diplomat warned.

Corruption, mentioned by 92 respondents, is second among the main concerns, followed by excessive bureaucracy.

Businesses need quick and clear solutions," Kupfer said regarding bureaucracy.

Reducing bureaucracy will lead to a boost to the economy and investment, Kupfer believes.

Who will take the jobs?

Despite the listed advantages, the main issue for Austrian businesses remains the lack of workforce, with 83 of those surveyed citing it as a problem.

The availability of qualified labor may be a defining challenge for the future of the Bulgarian economy," Kupfer predicts.

The introduction of the euro could contribute to the Bulgarian economy, with two-thirds of companies believing that this would have a positive effect.

According to Kupfer, there are approximately 350 Austrian companies in Bulgaria, which have invested 5.5 billion euros over the years.

Translated by Tzvetozar Vincent Iolov