Municipality of Varna has a powerful economic potential. Here, the main sectors that are developed are the industry and the services. The good investment climate in the municipality and the possibilities for tourism are a prerequisite for the development of these sectors.
The services sector is very well-developed. A large variety of the services offered in the city is observed.
In 2007 there is a huge interest in Varna for the commercial areas of the malls that are currently being constructed – there are two projects in the construction phase and two ones that are under preparation.
The construction of the Pfohe Mall and Mall of Varna has been completed in the city. Mall of Varna is a commercial and entertainment centre with 70 thousand square meters spread-out built-up area, designed by the British architecture office “Chapman Taylor”. There are be shops, a supermarket, movie theatres, an entertainment floor with a bowling hall, a large children’s spot, a skating-rink, a fitness and wellness centre in the mall.
The implementation of a project for construction of a commercial centre in the heart of the city will start very soon.

Transport

Varna International Airport is directly related to the economic situation of the city and the region. It is the second largest airport after Sofia airport. It provides first-class access to the city and the resort complexes and makes a connection with 35 countries and 101 cities around the world, but with a high seasonal dependence of the traffic. In 2006 an expansion of the passenger terminals of Varna International Airport was completed and this large project that has been launched will continue during the next years. There is an expressed interest for investment in Varna International Airport from Wiggins Group, Great Britain; Brussels Airport; a consortium of 6 multinational companies, among which are Credit Swiss First Boston, Montgomery Asset Management, Copenhagen Airport and the Belgian company BIAC.
In the near future a new SAT II system for flying and landing of airplanes will be introduced during bad weather conditions, which, together with the construction of the new platforms and runways for airplanes from the type Boing 767, will contribute to increasing the airport’s reputation at the international aviation market. The vision of the Bulgarian government on Varna International Airport is to give it for concession.
Port Varna is the sea gate of the city. The expansion of Port Varna and its moving will predetermine the image and the vision of the city for many years ahead. Moving the current port Varna-East to the urban part of the territory will provide an opportunity for the construction of new hotels, business centres and amusement parks. It will turn into the natural extension of the Sea garden. A new yacht and passenger terminal will be constructed there. With the realization of this project Varna has all the chances to be transformed into the pearl of the Black sea. The project for Port Varna also plans the following changes:

• Construction of a passenger terminal with a Business centre of Port Varna-East;
• Construction of a container terminal, grain terminal, a terminal for liquid cargo and a terminal for hazardous liquid cargo at the shore of Varna Lake.

Besides the port, the international airport and the good railway and land transport connections, Varna has one of the best telecommunication networks. There are 472 telephone lines for every 1000 people, which contributes to our country’s place among the leading ones in Central and Eastern Europe. Currently, there are three digital telephone exchanges of highest technological class of the companies Siemens and Ericsson. The level of digitalization of the telecommunication network is 21.7% as compared to 7.8% for the remaining part of the country. In Varna two international optic rings have been built.
The type and quality of the services offered will increase, as well as the development of the broad-band lines, which will further contribute to the effectiveness of the business through high-speed internet connection and opportunity for transfer of a larger volume of data.

A lot of well-known companies have representations and offices in Varna.
All these companies have chosen to establish representations in the city of Varna due to the particularly favourable investment climate, the low labour costs and the highly qualified staff provided by the universities in Varna. Varna is a cosmopolitan city with a large population with high consumer needs and relatively larger financial possibilities for consumption as compared to the other parts of the country.

Sports /golf, water sports/ and investments

The opportunities for sports and vacation in the city of Varna are numerous and their quality is increasing:
Cycling, volleyball, basketball, East martial arts; football; bungee jumping; flying with balloon; parachute jumps; paraplanning; paintball; climbing; sports gymnastics; traditional martial arts; off-road; fitness; yacht rows in Varna bay; Sailing Team; windsurfing; yachting; kite-surfing; sea fishing; kites.
Underwater trips – diving to ships, cave and deep diving, diving courses, swimming.
The first year-long skating rink will be in Varna. Its size will be 20 to 30 meters. By Christmas in 2007 the people in Varna and the visitors of the city will have the opportunity to skate freely during the week, during weekends, all day long. The terrain of the skating rink is located at a height of 28 meters and will be glazed, which will reveal a panorama of the entire city. It is located on one floor, together with the bowling and the other entertainments. Around the ice surface there will be pubs and places for relaxation. The project plans hiring teachers in hockey and figure skating. Schools will be established, and later on – tournaments will be organized. This will be the first private skating rink in Bulgaria, managed by an international experienced operator.

Like each market that is under development, the Bulgarian one offers higher profitability and dynamics as compared to a number of markets, such as the West European and the American real estate market. The real estate market in the region of the city of Varna is an inseparable part of the general state of affairs in the country.
According to official data from the statistical institute, the average price of the properties in the capital toward the end of the last year was 1285 leva per square meter, while in Varna the price was 1201 leva. The average year growth (2004-2005) of the prices of apartments is above 20% for Varna.
The prices are in euro per square meter.
Vladislavovo, panel apartments – 363 euro/m2
City centre, new construction, brick - 1505 euro/m2
The market for offices has not ceased to develop, although at first sight it seems that the year 2006 has passed under the sign of the commercial areas.

Income from rent

The demand for residential and commercial areas in the city of Varna is traditionally high, which determines the high prices. The perspective for leasing properties in the urban part of Varna is among the biggest in Bulgaria. The demand is high during the entire year, due to the functioning universities in the city, the developed business environment and the numerous sports and resort places. During summer Varna becomes the city with highest rental prices in the country. The rents of residential areas start at 1.5 euro/m2 in the suburbs and reach 30 euro/m2 in the central parts of the city.
There are mainly investments in sites, located at the central part of the city and most often these are investments in old buildings with architecture value. Recently, the reconstruction of a site – a house with an area of 700 square meters – was completed, which is a cultural monument, located in the city centre and which will be offered for rent for a price of about 4-5 thousand euro per month. The rents in Varna mall also register a high interest on the part of leaseholders.
The main driving force of this market at the moment is the demand. The rents of the stores have increased by 14 percent by the end of 2006 as compared to the prices at the beginning of the year. After the opening of the malls, a large part of the traders on the central street will move to the mall and the prices of rents for commercial areas in the city centre will decrease by more than 10%. This is the forecast of “Forton International”, which is an exclusive representative in leasing Varna mall. This is what has already happened at the main commercial streets in Sofia. Besides the three new trade centres, one more is planned to be built – “Central Universal Store – Varna”, located on the main commercial street.

Economic indicators for business development, such as the policy of the local authorities for attracting foreign investors

Bulgaria is attractive for the investors due to some factors, such as the rapid growth (4.5% growth in GDP per year), the low inflation rate (2.3% for 2003), the low interest rate, the stable prices and labour costs, the low taxes and the low budget deficit. The labour costs in Bulgaria account for less than 10% of the average ones for the European Union.
Investments have a low risk level and a high return. The international accounting standards have been endorsed in Bulgaria. There is no tax on capital income or tax on income from interest.
Bulgaria is party to 52 international treaties for protection and stimulation of investment on the basis of the reciprocity and to 55 treaties for avoiding the double taxation.
The creation of a favourable business environment for attraction of investment and providing employment to the population is among the strategic goals of the municipality.
Among the main priorities is also the development of the public-private partnership between the local government and the companies by means of:
• financial leasing;
• obligation financing;
• directing the vacant terrains, the industrial, storage and commercial premises for the development of alternative business under preferential conditions;
In accordance with art.27, para.1 of the Investment Promotion Act, officials are hired in the municipal administration, who support the Bulgarian Investment Agency and provide cooperation to the investors, who received a certificate for a firs-class or second-class investment. This support is expressed in individual administrative service during the submission and receiving of all necessary documents for carrying out a certain investment.
Municipality of Varna has a strategic location with a transcontinental significance. The Black sea as a key natural geographical factor is a prerequisite for the development of the marine industry. Municipality of Varna has a well-developed tourism industry and a potential for development of new forms of tourism, such as Spa and Wellness, cultural, and ecological tourism. All types of transports are present and are well-developed and synchronized. The transport infrastructure is of local, national and international significance. There is a scientific and technical potential. All levels of education are developed, up to university education in the area of economics, management, technique and technologies, medicine and tourism. Municipality of Varna attracts labour force from the neighbouring regions and the entire country. The labour force is highly-qualified. Modern communication connections and a rich information environment have been developed. A well-developed network of financial and credit institutions for supporting the small and medium-sized business. Active international cooperation and opportunities to participate in EU projects. Large-scale production base in the industry with a broad sectoral scope. High level of privatization and restructuring of the state and municipal property. Cultural institutions of national and international significance are located in the city. There is a rich cultural and historical heritage, a lot of non-governmental organizations, civil movements, associations and chambers.

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