At the service of Hungarian firms in Bulgaria

It is a peculiarity of the now 5-year-old Hungarian-Bulgarian Chamber of Commerce that “we do not just support Bulgarian companies present in Hungary as most foreign chambers do in this country but the other way round. Our approach has always been to help foster bilateral economic relations,” the President of the Chamber, Rossen Tkatchenko explains to Diplomacy & Trade.

"We are glad to assist Bulgarian companies who try their luck in the Hungarian market,” he says, however, Hungary is not as attractive an investment destination as Austria or Germany. There are many more Hungarian firms that would like to set up a venture in Bulgaria, where the different phases of development (like privatization and EU membership) occurred later than in Hungary. Following a deep crisis in the 1990s, Bulgaria conducted a strong economic policy that ensured a stable currency (the Bulgarian lev was tied to the German mark – as it is now to the euro – with a fixed rate guaranteed by central bank reserves), the inflation rate was very low and when the world economic crisis hit, Bulgaria actually had a budget surplus. Today, tax on corporate profits and personal income tax are both at 10%. Dividend withholding tax is 5%. Profit tax for REITs (Real Estate Investment Trusts) and Capital gains from stocks/bonds/mutual funds is 0%. Companies that invest in less developed areas, especially those in need of more employment, may not pay any tax if certain conditions are met,” Rossen Tkatchenko says.

It was back in late 2007, at a reception at the Bulgarian Embassy in Budapest, where a couple of people raised the issue of establishing a Bulgarian chamber. A few days later, four businessmen gathered to discuss the matter and prepared a list of possible member companies. At a subsequent meeting, organized with the help of the Embassy at the residence of the Bulgarian Ambassador, the participants established the Hungarian-Bulgarian Chamber of Commerce in June 2008. “It is a non-profit organization with a six-member board and with a single paid employee, our secretary,” Rossen Tkatchenko says.

The descendants of the original Bulgarian gardeners have been in Hungary for generations. Some of them went back to Bulgaria. “Their heart is Bulgarian but they bring a Hungarian attitude and thought process to Bulgarian ventures. One of the best examples is the general manager of Fornetti Bulgaria. Fornetti is a founding member of our Chamber as is the Hungarian pharmaceutical company ‘Richter Gedeon’ which operates an important unit in Bulgaria where it is a prominent investor. Other members also conduct activities in Bulgaria,” the President points out. One of the most important services the Chamber provides its members is the assistance at fairs and exhibitions in Bulgaria. It helps in organizing participation, arranging accommodations, registering the premises (often with other Hungarians and thus, at a discount), providing interpreters, and even in finding business partners and suppliers.

The Chamber President, Rossen Tkatchenko is “a new generation Bulgarian” in Hungary who came to this country in 1987 to study at the University of Economics in Budapest. (He learned only later that one of his grandfathers had actually been a Bulgarian gardener in Hungary.) After graduation, he began to work for a foreign trade company. Then, following a short spell in the controlling department of a major insurance firm, he became an advisor at an American-British consortium with his first assignment being the development of Ford’s dealer network in Russia. Similar jobs followed in the successor states of the Soviet Union and other countries of the region as well as some of the Mediterranean – over 20 countries. Now, he holds his own simulation trainings to teach such network development.  As a hobby, he imports selected Bulgarian wines for connoisseurs made of rare grape varieties with great style and potential. "This is zero-risk business", he laughs, "these exceptional wines are so good, that if we do not sell them, we will gladly drink them ourselves".