Bulgaria is rich in historical and cultural attractions for the tourist, but in comparison with many other European destinations, it is still relatively new and unspoiled. It is a country with low cost of living, extremely low rate of taxation, liberal foreign investment laws, stable growing economy, limited currency risk (BGN pegged to EURO under stable currency board) and significant foreign direct investment.

Location

The republic of Bulgaria is situated in the south-east part of Europe and more precisely in the eastern part of the Balkan peninsula. On the north it has a common boundary with Romania. On the west with Serbia and Montenegro and the Former Yugoslav Republic of Macedonia. On the south with Turkey and Greece. On the east the country is bounded by the Black Sea.

Territory: 111,000 square kilometers. Population: 7,262,675 residents, according to 2008 est. Capital city: Sofia, with 1,188,000 inhabitants. Larger cities: Varna (450,000 inhabitants), Plovdiv (350,000 inhabitants), Bourgas (250,000 inhabitants), Stara Zagora (130,000 inhabitants), Rousse and Pleven (120,000 inhabitants each). Airports: Sofia, Plovdiv, Varna, Bourgas. Monetary unit: LEV (BGL)  (1 BGL = 0.5 EUR). Relief: The lowlands occupy 31%, the plains and the hilly terrains 41%, and the mountains 28% of the country’s territory. Water resources: On the east Bulgaria borders on the Black Sea. The common length of the sea-frontage from the north (Romania) to the south (Turkey) is 378 km. The rivers in Bulgaria flow into the Black and the Aegean Seas.

Country profile

The Republic of Bulgaria is home to 7,262,675 residents, according to July 2008 estimates from the CIA World Factbook. At that time the population was estimated to be decreasing at a rate 0.813% per year. The majority of the country’s residents are Bulgarian (83.9 percent). The vast majority of the population is Orthodox (82.6%) and country’s official language is Bulgarian.

The government of Bulgaria is a parliamentary democracy. The president of the republic serves as the chief of state, and is elected by popular vote for a five-year term (eligible for a second term). The prime minister is the acting head of government, and is nominated by the president and elected by the National Assembly, according to the CIA World Factbook. Georgi Parvanov is Bulgaria’s president and Sergei Stanishev is the current prime minister. The country is divided into 28 administrative provinces, and the national capital is Sofia with approximately 1,200,000 inhabitants.

Tourism, as an industry, has been an important source of economic growth. According to Sofia News Agency, while in 2006 the country hosted an estimated 6 million foreign tourists, in 2007, that number was increased to 7-8 million. The country has historical cities and towns, summer beaches, and mountain ski resorts. New types of tourism, including cultural, architectural and historic tours, eco-tourism, and adventure tours, expand the range of services available to visitors.

Bulgaria’s GDP is $86.32 billion and growing at a rate of 6.2 percent, according to 2007 estimates. Services account for the largest percentage of GDP (57.9 percent), with industry accounting for 33.6 percent and agriculture – 8.5 percent. The national unemployment rate stands at 7.7 percent. The inflation rate is 8.8 percent. The official currency is the Bulgarian lev (BGN), one of which is worth approximately $1.4366.

Bulgaria, a former communist country that entered the EU on 1 January 2007 and also is a NATO member, has experienced strong growth since a major economic downturn in 1996. Successive governments have demonstrated commitment to economic reforms and responsible fiscal planning (even had received the reward for best fiscal policy by World Bank in 2008), but have failed so far to rein in rising inflation and large current account deficits. According to the CIA World Factbook, Bulgaria has averaged more than 6% growth since 2004, attracting significant amounts of foreign direct investment, but corruption in the public administration, a weak judiciary, and the presence of organized crime remain significant challenges.

Alexander Nevsky Cathedral in Sofia - symbol of Bulgaria

Real estate market

The cheap Bulgarian property market attracted many investors from all over the world. People have been buying properties in Bulgaria for both personal use and investment purposes.

Bulgaria has improved consistently for the last 15 years, but still it could be defined as developing country. As the global property agency and consultancy Knight Frank reported, in the last quarter of 2007 Bulgaria has continued to see the strongest growth in house prices of the countries included in the Knight Frank Global House Price Index. Even though the prices for flats over the year increased by nearly 34%, they remain relatively low compared with much of Central and Eastern Europe. The average price per sq. m. of property in Bulgaria is 914 EUR, in the capital Sofia – about 1100 EUR.

According to Bulgarian national radio, the real estate market in Bulgaria reached its peak as the buyers refuse to buy at prices that exceed their expectations. Over the summer 2008, the supply has increased by 50% over demand.

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Potential problems

Poorly developed infrastructure in some regions. Property oversupply in some regions. Low liquidity of the investment. Limited buying power of Bulgarian consumer. High dependence on the ability of tenants to pay. High inflation rate.

Purchasing real estate in Bulgaria

There are no restrictions for foreigners buying an apartment, but purchasing property with land in Bulgaria is only available after registering their own Company formed in Bulgaria. The company will buy the land, and on the other side the same company will be 100% owned by the respective foreign person. This restriction will be abolished in 2014.

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