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Greek companies in Bulgaria double following capital controls

12 January 2016 / 18:01:37  GRReporter
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Anastasia Balezdrova

Over the past year, the already aggravated Greek economy suffered several blows, the worst of them being capital controls. The problems for the representatives of Greek business began in the first days after they were imposed at the end of June 2015 due to the difficulties in payments to foreign suppliers.

As a result, many Greek companies have moved to neighbouring European Union countries where the economic environment is favourable to business due to low taxes and minimal bureaucracy. The most preferred among them are Bulgaria and Cyprus.

The interest in moving a business to Bulgaria has not abated, as demonstrated by the participation of dozens of Greek citizens in the meeting organized by the Greek - Bulgarian Chamber of Commerce and Industry in Athens on 9 January. It discussed the possibilities of economic cooperation between Greece and Bulgaria and most of the questions from the audience were related to the establishment of companies in Bulgaria.

After the meeting, GRReporter talked with Panayotis Koutsikos, President of the Greek - Bulgarian Chamber of Commerce and Industry. He presented data on the Greek business presence in Bulgaria and commented on the exaggerated information on the number of Greek companies and the jobs opened by them there, which has appeared in the media in both countries.

Mr. Koutsikos, in recent months, articles in the Bulgarian and Greek press informed that 60,000 Greek companies had been established in Bulgaria. Is this information correct?

No, it is wrong. It is not about 60,000 Greek companies but about 60,000 bank accounts that Greek companies have opened to avoid the capital controls introduced in Greece. They are entitled to it, as any other European company.

This massive opening of accounts in Bulgarian banks began immediately after the introduction of capital controls and the Greek businessmen resorted to it to keep their customers and not to have problems with their payments.

When did the Greek businessmen start to show an increased interest in moving their companies to Bulgaria?

This interest began in the 1990s. Within 4-5 years, many Greek companies moved to Bulgaria because of the good business climate there. As a result, over a period of 2-3 years, the first 500 companies of Greek businessmen were established in Bulgaria. Over the past five years, their number reached 1,100.

After the year 2000 and depending on the situation in Greece, there was a large increase in the number of Greek companies in Bulgaria. Between 3,000 and 4,000 companies were established a little later with the sole purpose of owning a car with Bulgarian registration plates.

Did the number of firms intensively increase over the past year?

Following the introduction of capital controls in Greece in July 2015, the number of Greek companies in Bulgaria increased from 5,500 to 11,500.

In which sectors of the economy are these companies operating?

The companies are operating in all sectors of the economy, in services, industry and trade. The total amount of the capital invested by Greek companies in Bulgaria exceeds 3 billion euro.

How many jobs have they created in Bulgaria?

They have created between 92,000 and 93,000 jobs, which are occupied by Bulgarian citizens. The number of Greeks who are working in the companies is not higher than 2,000.

Are there regions in Bulgaria with a concentrated presence of Greek companies?

No, most of them are in Sofia. Plovdiv ranks second. The companies that are operating in the agricultural sector are scattered in different regions.

What difficulties are the Greek businessmen facing while attempting to establish companies in Bulgaria?

They are facing no difficulties. Unlike the difficulties we are facing in Greece, the procedures in Bulgaria are much easier, cheaper and faster. In Bulgaria, a company can be established within a week. Therefore, the Greek businessmen who go there are satisfied.

Do you think that some of these companies will return to Greece when the state of the national economy improves?

No, not at all. The Greek companies in Bulgaria are large and focused on global markets. They are established to cover and increase their sales there. Since Bulgaria is a member of the European Union, the process is identical with the expansion of a company to Thessaloniki, for example. Companies are moving to Bulgaria in the same way. We, as the Greek-Bulgarian Chamber of Commerce and Industry, we want Bulgarian companies to expand to Greece and seek to encourage this process.

Is there interest on the part of Bulgarian companies?

We are leading many conversations on this topic. But Bulgarian companies will take such a step when the business climate in Greece improves.

Tags: EconomyCompaniesGreek companies in BulgariaCapital controlsJobsGreek-Bulgarian Chamber of Commerce and Industry
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