Smaller companies heading to Bulgaria in droves
Thousands of small and medium-sized businesses (SMEs) are looking for the road to financial recovery in Bulgaria. Even though the trend of Greek businesses relocating to the neighboring country had already begun before the crisis, in the past few months there has been a fresh spurt of interest, taking the total number that have moved there to 6,000.
?The first wave of Greek companies moving their headquarters to Bulgaria came in 2006, when it became a member of the European Union, and they were mostly large construction and textile firms,? Alexandros Adamidis, a lawyer who heads a company that specializes in such transfers, told Kathimerini.
In contrast to the widespread belief that those first businesses moved in order to reduce operating costs, Adamidis said their motives were more about increasing profits, with Greek construction firms today leading the market for big infrastructure projects in Bulgaria.
In 2008, the list of businesses relocating to Bulgaria grew with the addition of services, e-commerce and manufacturing. In January of that same year, when the global financial crisis exploded, plastics factories, photovoltaic panel producers, telecoms, medical equipment manufacturers, printers, security systems operators, food manufacturers and even film production companies began joining the club of emigres.
Adamidis, who has offices both in Thessaloniki and Sofia, has been receiving at least 10 phone calls a day from people interested in relocating their firms in the past six months.
?These are not companies that have gone bankrupt,? he explained. ?But the red tape and especially the unclear tax system have put businesses in flight mode.?
One example is Sokratis, the owner of a robust family business in the northern Greek city of Kozani, which has an annual turnover of 600,000 euros.
?We attended an expo for our sector in Italy, which cost 10,000 euros to participate in,? the businessman, who declined to give his surname, said. ?We came back empty-handed and deeply offended,? Sokratis said, adding that potential buyers from Spain, Italy and the Czech Republic had in no uncertain terms said that they did not trust Greek firms to fulfill their promises and that the Greeks overprice their products.
This was not the first time that Sokratis had faced the fallout from successive blows to Greece?s credibility on an international scale.
?An order from Cyprus was canceled in March because a Cypriot bank refused to transfer the money for the purchase into a Greek bank because it said that Greece was bankrupt,? Sokratis said.
Today, the businessman is thinking about maintaining his production unit in Kozani but selling his products through Sofia under a new Bulgarian label.
?Initiating business in Bulgaria does not sap the Greek economy as the Greek company continues to be able to operate,? explained Adamidis regarding this specific case. ?The workers remain in Greece and the profits return to Greece, which is where the headquarters are.?