Fri, May
62 New Articles

The Buzz in Bulgaria: Interview with Vladimir Penkov of Penkov, Markov & Partners

The Buzz in Bulgaria: Interview with Vladimir Penkov of Penkov, Markov & Partners

  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Amid political turmoil, Bulgaria is trying to catch up with a backlog of parliamentary work, according to Penkov, Markov & Partners Chairman and Senior Partner Vladimir Penkov.

“First of all, last year we had three parliamentary elections and, ultimately, they were able to form a new government only in December 2021,” Penkov begins. “It led to great pressure on society, with important legal questions accumulating and many issues left unaddressed. The government normally explains the delays in the legislative process by a need to investigate and analyze best practices before adopting laws, but the process is rather slow and the majority of legislative amendments are still in their initial stages.” 

Penkov adds that “political tensions increased with the arrest of the former prime minister, with many arguing that it was not in conformity with the law. In addition, in late March, a dispute arose among Bulgaria’s governing coalition members, leading the former coalition member of the governing party to withdraw its ministers from the government. Consequently, there is also a risk that members of parliament will also not support the coalition and, in that case, no political party would have a majority in parliament.” This, according to him, creates a risky situation, “considering the energy prices growing, refugees arriving, and general instability in the region.” This is “not a great period to have another extraordinary election,” Penkov adds. 

Penkov says that, despite the backlog in parliamentary work, “the adoption of around 20 new laws is expected in the coming months, on topics such as corruption, judicial reform, and public procurement. Without addressing these gaps, the EU might not grant Bulgaria the EUR 12 billion funding as a part of the national recovery and resilience plan, focusing mostly on the green energy transition.” On the bright side, he notes, “a law was adopted on renewable energy that facilitates households being granted permits for energy production rather easily.” In addition, Penkov highlights the tax-related amendments. “The VAT threshold for due legislation has been increased, however, the new law also introduces the abolition of VAT for products imported from the EU.”

“Bulgaria will soon adopt new whistleblowing and anti-corruption legislation by transposing the EU directives into national law,” Penkov notes. “Additionally, the abolition of the so-called 'in-house' orders in terms of public infrastructure to private entities without tenders aims to ensure equal treatment for all competitors on the market.” 

“Clearly, the list of expected regulations is quite comprehensive,” Penkov points out. “They aim to better protect the interests of businesses and individuals, tackle corruption, and ensure efficiency and transparency. These laws will likely be in force this summer if the parliament is still functioning by then,” he says.

Penkov highlights that some significant deals were concluded in the last few months in Bulgaria. “One of the most important among those,” he says, “was seeing a Bulgarian startup becoming a unicorn. Recently, Payhawk become the first-ever Bulgarian unicorn after raising USD 100 million in a Lightspeed-led Series B extension. We were quite excited to see them succeed when we analyzed the deal a month ago.”