site.btaInvestment Promotion Act Amended on First Reading

The National Assembly Thursday passed amendments to the Investment Promotion Act on first reading. Under the revisions, an investment project should lead to a net increase in the number of employees at the corresponding site in comparison with their average number in the previous 12 months after retracting the number of jobs created in that period, calculated in annual work units. Every available job should be occupied for three years after the investment and be preserved in the corresponding region for at least five years from the date on which a person was appointed on that job for the first time.

The investment promotion measures are applied in accordance with Commission Regulation (EU) No. 651/2014 of June 17, 2014 Declaring Certain Categories of Aid Compatible with the Internal Market as a multi-sector scheme for regional investment aid and a training aid scheme.

The revisions also envisage at least 25% of allowed costs for tangible and intangible assets, instead of the current 40%, to be funded with personal resources or external financing in a way excluding public aid.

The rules on the application of the Investment Promotion Act should be adapted to the amendments and the Commission Regulation within three months from the changes' adoption, the MPs decided, noting that the regional investment aid scheme and the training aid scheme were valid until December 31, 2023.

The Minister of Innovation and Growth, who is aid administrator, will provide a summary of every scheme to the European Commission within the deadlines set in the State Aid Act and Commission Regulation (EU) No. 651/2014.

Commenting on the bill to amend the Investment Promotion Act, Desislava Trifonova MP of GERB-UDF said that her group would support the bill but are strongly disappointed in it, because it lacks real promotion measures and reforms. Reducing to 25% the costs covered with personal funding harbours a huge risk of approving and certifying the projects of companies incapable of actual funding.

Veniamin Vodenicharov MP of Vazrazhdane commented that the requirements for investors need to be eased. He said his group would abstain during the vote on the bill due to the lack of favourable preconditions for attracting investment in areas of the country.

Rumen Gechev MP of BSP for Bulgaria commented that the bill presents a strange problem where the investment project results in a net increase in the number of employees at a given site and every job created through the investment has to be preserved for at least five years. Those who wrote the bill have not heard of robotization of the production process, Gechev argued. "We will demand new investment, creation and preservation of jobs, but if the new investment is for the incorporation of new tech and the workers have to be reduced from 100 to 70, what shall we do: ban them from incorporating new tech?" he asked. BSP for Bulgaria are against the draft revisions, Gechev said.