Romania, Bulgaria, Moldova, Serbia. Competitive advantages.

When an investor decides to start a business in our region, he usually can choose between a few countries: if they want to choose a country from the European Union, then they will most likely choose between Romania and Bulgaria, the last countries who joined the EU and also the countries with the lowest labour cost among the EU countries. In case they want to choose a country that is not an EU member, then Serbia and the Republic of Moldova seam to be the 2 best options.

However it is pretty difficult to make a choice in the end, given that each of these countries have advantages and disadvantages. So I proposed to make an overview of the main elements that take into account when an investor decides to start a business in one of these countries.

First, I tried to group in a comparative table the main types of fees and taxes, and the costs that an investor must bear in each of the 4 analyzed countries. Please see them below:

When an investor decides to start a business in our region, he usually can choose between a few countries: if they want to choose a country from the European Union, then they will most likely choose between Romania and Bulgaria, the last countries who joined the EU and also the countries with the lowest labour cost among the EU countries. In case they want to choose a country that is not an EU member, then Serbia and the Republic of Moldova seam to be the 2 best options.

However it is pretty difficult to make a choice in the end, given that each of these countries have advantages and disadvantages. So I proposed to make an overview of the main elements that take into account when an investor decides to start a business in one of these countries.

First, I tried to group in a comparative table the main types of fees and taxes, and the costs that an investor must bear in each of the 4 analyzed countries. Please see them below:

If we look at the above table, we will see that Bulgaria and Serbia are the best in terms of profit taxation, while Bulgaria is by far the most advantageous in terms of taxation of dividends and labor tax.

In terms of VAT all 4 countries are almost on the same position with a slight advantage for Serbia, and in terms of minimum wage and average wage, Moldova has the best values, followed by Bulgaria, while Romania and Serbia are the highest, staying on almost equal positions.

Regarding the start-up of a new business, the best offers come from Romania, both due to low capital required for registration of a company, which facilitates the access to markets including small business, but also in terms of time registration and bureaucracy and procedures for registration that are more simple than in the other 2 countries. Ranked 2 in this chapter after Romania is Moldova.

In terms of tax incentives offered to investors, ranked 1 is the Republic of Moldova, with the possibility of full exemption from tax on profits up to 3 years for small and medium enterprises or 5 years for IT companies and other types of facilities for major investments. Romania also was offering some interesting feature model for micro enterprises but unfortunately one that the flat rate was introduced a lot of the facilities lost its attractiveness.

Another important issue for investors is the cost of utilities and production facilities. From this point of view the best conditions are offered by Moldova and Bulgaria.

For those who are interested in starting a new business in the region, but not to create productive capacity but to develop a network of outlets, clearly the biggest advantage it is offered by Romania, whose outlet size exceeds the cumulative of the other 3 countries.

Here are just some comparative elements which can constitute the basis for future investment in the region. We made already the first step, Ascent Group having its own local offices in each of the 4 countries analyzed above. So, if you decided to start a business in any country to which we referred here, we will be happy to assist you from the first steps ….