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Yordanka Fandakova, Sofia’s first female mayor, tells Sebastian Shehadi about the city’s rapidly improved business environment.

Q: What makes Sofia an attractive destination for foreign direct investment?

In the past 10 years Sofia was the European city with the highest growth of GDP per capita and currently accounts for 40% of Bulgaria’s total GDP. A part of this decade was a hard period for the global economy. That’s why it was crucial for us to attract as much public investment as possible in the sector of infrastructure development, a decision that supported the business and contributed to Sofia’s development. Some 30km of new metro lines built over a span of 10 years is a very good result.

The investors appreciate the city’s new infrastructure, its good connectivity and key regional location, as well as the fact that Sofia is one of the educational centres in the region. The young, well-educated people are Sofia’s capital and one of the city’s strongest competitive advantages. Another important advantage is the focus on education in engineering and computer-related technology that is being taught in a number of specialised high schools.

Sofia ranks third in Europe in number of IT start-ups. For the past five years, the software sector experienced 120% growth, and 90% of the technological companies in the country operate in Sofia. It can be said with confidence that Sofia is creating a unique environment for the development of technologies and innovations. Our objective is to support this development so that Sofia can become a key European and international hub. The fact that the Financial Times chose Sofia for its new FT Core technological team is also significant. Furthermore, in the beginning of this year the Coca-Cola Company opened its second largest R&D centre globally with 130 IT specialists in Sofia.

The well-developed digital infrastructure (Sofia is among the cities with the fastest high-quality free internet), the attractive tax policies with a flat corporate tax rate of 10%, the high-quality labour force, the simplified procedures for starting a business, the minimum currency risk: all these factors play a key positive role in attracting FDI in Bulgaria.

Q: Which are the sectors where you would like to see moreFDI?

Sofia attracts more than half of the total foreign investments in Bulgaria. In recent years a big part of the investments was attracted by high-value-added industries and activities as well as hi-tech manufacturing, e.g. production of components for the aviation and automotive industries, IT R&D centres, cybersecurity and so on. The qualitative difference in recent years is that Sofia produces a growing number of products that are finding their way into the global market.

We no longer only produce solutions and products, we also create them. Professionals and innovative young people with skills to solve big challenges in a more innovative and faster manner are Sofia’s strength. That is why we strive to encourage investment in the fields of R&D, biotech, high-value-added manufacturing, creative industries and the smart city. Business services and tourism are also among the key industries.

Q: What prevents the inflow of more investment to Sofia?

Investments require three key things: knowledge, security and opportunities. This autumn almost every week a new company opens a new office in Sofia or expands its current operations. More and more companies from all around the world do research on Sofia. According to the latest fDi Intelligence survey, in the next two years Sofia will be among the most attractive international investment locations. I am sure that the fact that Sofia is being listed in a growing number of world rankings will contribute to the increasing interest towards the city.

It’s a fact that Sofia still has much to do in order to catch up compared with other European capitals. That is why my team and I have been working at a pace, which could allow us to compensate for this delay.

Q: How are you making Sofia better for business?

Our goal is to develop Sofia as an innovative and green city. For me personally the big goal is to increase the quality of life for the citizens, which, apart from better urban environment, requires the provision of more opportunities for career development and good income levels. Therefore, creating a good environment for business and entrepreneurship is key.

For this purpose, we created Sofia Investment Agency, which supports Bulgarian and foreign businesses that want to develop in Sofia. Since 2016 the agency has worked on 115 concrete investors’ cases, providing free information, analyses, contacts and support. We furthered our co-operation with other European capitals by establishing contacts with the business, and we already have city-to-city agreements signed with London and Vienna.

This article is sourced from fDi Magazine
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