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The Buzz in Bulgaria: Interview with Nikolay Kolev of Kolev, Angelov & Miteva Law Firm

The Buzz in Bulgaria: Interview with Nikolay Kolev of Kolev, Angelov & Miteva Law Firm

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Тhe current political atmosphere in Bulgaria is turbulent and hectic, as the country faces an unprecedented situation of running its third extraordinary Parliament elections in a row within a single year, according to Kolev, Angelov & Miteva Law Firm’s Partner Nikolay Kolev.

"The next parliamentary elections scheduled in mid-November will be held together with the Presidential elections, which adds even more complexity to the situation," Kolev begins. According to him, the political scene faces fragmentation, with political parties racing to reach the 4% barrier for entry into Parliament. "The attempts for political coalitions are opportunistic as parties lack a real common conceptual background," he adds. "Recent surveys indicate that six or even seven political parties will be able to enter the Parliament, which is very challenging, given the size of the Bulgarian population."

Kolev reports that it is difficult to identify any recent major legislative updates, "as the Parliament functioned only for a few months and currently, the country is in the middle of two election campaigns." However, a controversial topic is "Bulgaria’s largest labor union’s new proposal, suggesting an increase of the social insurance burden over the employees and entrepreneurs with the highest incomes," he adds. According to Kolev, if adopted, this measure will have a significant impact on businesses and might lead many companies to exit the Bulgarian market.

"Other notable proposed legislative changes relate to various aspects of corporate income taxation, VAT, excise duties, and trademark disputes, but they are still under discussion," Kolev notes.

As for the country’s economy, Kolev reports, that the real estate sector has a 20% increase in sales compared to the same period of 2019. "SAP’s recent EUR 50 million acquisition of Park Lane Office Center marks the biggest real estate transaction for the last three years in Sofia," he continues. "Simultaneously, many companies are trying to change the office spaces rented by them and to move to а new location. Earlier this year the famous IT company Chaos rented four floors of Sofia Office Center." According to Kolev, other growing fields of the economy are IT and fintech, as well as medical equipment and consumables trade, and some interesting M&A transactions involving companies in these areas might be expected.

On the other hand, Kolev notes that the COVID-19 crisis has led to many negative consequences in Bulgaria. "Many companies are having financial difficulties and are trying to reorganize their business to overcome the current economic situation," he adds. "We expect an increase in the next few months in the number of insolvency cases and voluntary liquidations. Many distressed assets and enterprises will be open for sale or will be seeking financial injection which might be а good opportunity for local and foreign investors who have the free cash for such an investment," Kolev reports. In addition, "many office centers and shopping malls management companies are preparing themselves for potential re-negotiations or disputes with their lessees given the risk of another lockdown in the coming weeks," Kolev says.

Bulgaria Knowledge Partner

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 15 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

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