Korean companies seeking for entry into the large European Union (EU) market and seeking cheap labor should invest in Bulgaria where the cost of doing business is low, the head of Sofia's state-run investment agency said.
"For many industries, the reason to invest in Bulgaria is the membership in the EU and the low cost of doing business here," Borislav Stefanov, who heads the Invest Bulgaria Agency, told reporters in a press meeting last week.
"It's true that the debt crisis is scaring companies away. But at the same time it's still true the EU is still one of the biggest trading partners for Korea, Japan and China," he said, noting the country boasts one of the lowest government debt and budget deficit, along with Denmark and Luxembourg.
In 2011, Korea's exports to the EU totaled $55.7 billion, while imports from the regional bloc came to $47.4 billion, according to data from the Korea Customs Service. A free trade agreement between South Korea and the world's largest economic bloc also went into effect last year.
The agency chief said Bulgaria, which joined the EU in 2007, has one of the lowest business costs among member states of the regional bloc.
The corporate income tax rate is 10 percent, making it equal lowest in the EU with Cyprus, while industries in high-unemployment areas are exempted from such tariffs. Personal income tax is also fixed at a 10 percent flat rate.
Monthly wages in the southeastern European country averaged 350 euros ($451) as of December, almost half Hungary's average of 758 euros and one-third of Croatia's 1,048 euros, according to Stefanov.
Bulgaria also provides a relatively favorable corporate climate in contrary to its negative images, such as its high crime rate and heavy corruption.
Stefanov said such factors are quite subjective, adding that the country is "a victim of perceptions that are difficult to change" despite an improving investment environment. (Yonhap)