Friendship Between Slavs Cemented by Real Estate in Bulgaria

22.07.2009 — Analysis

Why do figures for private investment from people from the Urals in Bulgaria exceed several times the trade turnover between the Russian region and the Balkan country, when will Bulgarian businessmen visit Ugra and the Urals? Plamen Petkov, the Consul of the Republic of Bulgaria in Ekaterinburg, answers these and other questions in the interview given to RusBusinessNews.

- Dear Mr Petkov, you have been here in the Urals for more than two months, what are your first impressions?

- I am delighted with the people. They are very pleasant, kind, and well-intentioned. I feel just like at my own home.

The development of economic activities is happening very fast in the Urals. This is most likely due to the fact that your region was off limits for foreigners for so long and so now it is catching up with opportunities missed. Cars in Ekaterinburg are even better than in Sofia.

The economic conditions for the development of business here are good here. So far 90% of our work involves processing the permit documentation for people visiting Bulgaria. The busy visa issuing season will finish by the end of August. Then we will be able to focus out resources on other goals.

- People going to Bulgaria are tourists mainly, are they not?

- Yes, that is so, but recently there has been a very big growth in number of private visits by those Russians who purchased real estate in Bulgaria, and their families’ members. The proportion of these people in the structure of those going from the Urals to Bulgaria is 20% already and is continuing to grow fast.

We are stimulating this process and offer the opportunity to have a holiday in a property not only to the proprietor’s close family, but to distant relatives and friends as well. There are no problems here, all you need for a private visit is to get an agreement from the proprietor. This is because if a person invested in real estate in Bulgaria, we have to create all conditions for that person to enjoy the property to the full. There are about ten large companies specialising in sales of real estate in Bulgaria working in the Urals region.

In 2008 our Consulate issued almost 11 thousand visas. This year we are expecting a drop in tourist visits by about 20% which will be compensated by the number of permits for private visits for real estate proprietors, their family members, and friends. So the number of visas issued will remain on the same level.

At the same time we do stimulate the development of organised tourism.

- How?

- We have a visa centre in Ekaterinburg which up until recently processed applicants’ data and checked the documentation. Since 1 July 2009 the responsibility for the accuracy of the data which is input electronically lies on tour operators (our Consulate has 34 accredited tour operators selling tours to Bulgaria in the Urals region).

The remaining work of the visa centre (the documentation control) will be paid for by the Bulgarian budgetary funds. This is why the cost of visa processing is one thousand roubles lower now. This only applies to organised tourists purchasing tours from tour operators.

- Bulgaria does have a lot of competition for tourists from the Urals. Similar holidays are offered by your neighbouring countries: Turkey, Greece, Croatia, Montenegro. What are your competitive advantages? What is so special about Bulgaria?

- This is a very important question, the competition really is very serious. However, each country offers a slightly different product. Bulgaria is interesting for Russians, first of all, because we have similar Slavic languages. In any situation the essence of the text can always be grasped. So there is no language barrier. Moreover, everybody in Bulgaria understands Russian. This makes Russian tourists’ stay more comfortable.

Secondly, the majority of our resorts, unlike Turkish resorts, are not insular. Our resort is not a fenced-off area with nothing of interest beyond the fence. In Bulgaria a tourist, having caught a bus or a taxi, can go and check out the environs and get an immense pleasure not only from the hotel and the beach, but from the surrounding landscape and sites of interest.

Another advantage is a very well developed service. It has changed a lot since the socialist times and is now in conformance with European requirements. This includes serving tourists in hotels, restaurants, and transport.

Bulgarian cuisine is known, familiar to Russian people. To all this you can add Bulgarian wines whose quality is no worse than other wines and which any tourist can afford.

Another thing which is unique to Bulgaria is that one can combine a holiday by the sea with a holiday in the mountains since our mountains are right next to the sea. We have mountain skiing centres in Borovets, Pamporovo, and Bansko.

- Does this mean that Bulgarian tourism is an all-the-year-around tourism?

- It has never been purely summer-time tourism; although in Russia, unfortunately, not that many people know about mountain skiing in Bulgaria. All this begun since the socialist times. The country then had been promoted as a country next to the sunny seaside.

- At the moment the direct service running from the Urals to Bulgaria is scheduled only during the summer, the Ural Airlines fly from Ekaterinburg to Burgas. If people in the Urals showed interest in winter breaks in Bulgaria, would there be an option of scheduling an all-year-round direct service?

- Yes. The possibility to start running direct service Ekaterinburg – Plovdiv (which is closer to the resorts than Sofia) has been under consideration for a long time. It all depends on whether the business sees the route as profitable.

- What is the value of the real estate being purchased by people from the Urals in Bulgaria?

- The sum total of these private investments exceeds several times the official trade turnover between Bulgaria and the Sverdlovsk Oblast, which is very modest so far and amounted to slightly more than 10 million US dollars in 2008. This is a very small figure, essentially this is no more than a turnover of a single company.

There are good conditions created for business in Bulgaria, however. For instance there is simplified taxation in place, flat 10% tax rate. This makes the inflow of investments much easier. EU countries invest into Bulgarian economy very actively.

- What spheres receive investments from the Urals, predominantly?

- Mostly this would be the construction business. Your companies are building a lot of housing with the view of selling flats, to people from the Urals as well. Their work is focused in coastal areas – Varna, Burgas, and small quiet towns. Practically all of our coastline is one large holiday resort. Investments into manufacturing industry are also planned.

- In your opinion, what is the potential for the collaboration between companies from the Urals and from Bulgaria in the industrial sphere?

- During the socialist times the supplies of Bulgarian lifting machinery to the Soviet Union were very active. After the privatisation in Bulgaria, Balkan Car (a maker of loaders) had practically disintegrated, and 10 separate companies in different cities appeared in its place.

Only a half of companies which used to make industrial cranes still make them now. But those which do are alive and selling their products. It was nice for me to see Bulgarian lifting equipment presented by a Urals dealer at the Russian Expo Arms 2009 exhibition in Nizhniy Tagil.

Our companies have several dealers in the Urals, but the sales are rather low. The distances are too great and the import duties are too high.

- Are the options of joint ventures for the production of lifting machinery in the Urals being considered?

- There are such opportunities, but there has to be an economic substantiation. These options are mainly considered by Bulgarian companies making outsize machines which are either impossible or extremely difficult to transport. This is why they look for manufacturers in the Urals, the projects and production equipment would be Bulgarian, but the product would be made not far from the consumer. I do think this direction of the development has a good future.

- How do you plan to promote Bulgarian industrial products in the Urals?

- It is expected that the visit of a very representative Bulgarian business delegation to Khanty-Mansiysk which was cancelled this May will occur in October 2009.

A similar mission should arrive at Ekaterinburg by the end of autumn. The companies producing traditional Bulgarian products will be represented: tourism, construction, wine, cosmetics, industrial machines and equipment. It is planned to continue and to make the delegation and business visit exchanges more active, not only within the framework of the Year of Bulgaria in Russia but in the future as well.

The economic crisis is affecting our economic collaboration but it also stimulates certain invigoration in the business climate and we should make use of that. We have to carry out as many events as possible within the framework of the Year of Bulgaria in Russia.

The interview has been prepared by Pavel Kober