Country Profile
Bulgaria’s identity as a desirable tourist destination is becoming increasingly well-known beyond its traditional markets of mainly neighbouring countries and is attracting a growing number of tourists from Asian and western countries. Over 9.3 million international tourists visited Bulgaria in 2018, up 4.4 per cent year on year. They came to experience Bulgaria’s beguiling blend of nature, history and culture with mountains that rival golden Black Sea beaches, the Danube River and cities that hum with nightlife and the arts. The Country has a population of 6.99 million people and covers an area of 111,000 square kilometres, sharing borders with Romania, Serbia, North Macedonia, Greece and Turkey.
Bulgaria is a Parliamentary Republic, a unified state with local self-government of Municipalities that became a member of the European Union in 2007. Its capital Sofia with a population 1.28 million, is the economic hub of Bulgaria and home to most major Bulgarian and international companies operating in the Country as well as the Bulgarian National Bank and the Bulgarian Stock Exchange. Bulgaria joined the World Trade Organisation in 1996 and it renewed its engagement with the World Bank following endorsement of a new Country Partnership Framework in 2016.
In recent years, strong domestic demand combined with low international energy prices and sizeable exports have contributed to Bulgaria’s continuing economic growth of over 3 per cent and has also helped to ease inflation to 2.4 per cent for 2018 with a fall to 2.0 per cent (EU forecast) expected in 2019. Tourism contributed to 11.7 per cent of GDP in 2018. The economy is expected to grow at a healthy pace in 2019 subject to the influence of global economic conditions. Rising wages should support solid growth in private consumption, while increased absorption of EU structural funds should aid robust capital spending.
Bulgaria’s prudent public financial management contributed to budget surpluses in both 2017 and 2018. Its preparations for ERM II and the banking union are also strengthening financial sector supervision and are generally conducive to ongoing broad-based structural reforms. Foreign direct Investment (FDI) rose by 10.3 per cent in 2018 to EUR 1.53 billion (Bulgarian National Bank), representing approximately 2.8 per cent of GDP. The largest net FDI inflows came from the Netherland, followed by Germany and then Belgium with EUR 1.1 billion, 153.7 million and 94.3 million respectively.
Economic Indicators – 2018
[supsystic-tables id=13]Foreign Direct Investment (FDI) in Bulgaria
The InvestBulgaria Agency (IBA), the government’s coordinating body, provides information, administrative services and incentive assessments to prospective foreign investors. Conditions and incentives applying to FDI include the following:
- There are no sectors that are off limit to investors, nor are there any restrictions on the amount of foreign-owned enterprises. In the majority of cases, foreign entities are given the same treatment as national firms and their investments are not screened or otherwise restricted;
- The Investment Promotion Act (2004) stipulates equal treatment of foreign and domestic investors. It creates investment incentives by helping investors purchase land, providing state financing for basic infrastructure and training new staff, and facilitating tax incentives and opportunities for public-private partnerships with the central and local government;
- Tax incentives may apply in certain circumstances such as additional tax deductions for hiring of individuals who are long-term unemployed, handicapped, or elderly and reimbursing up to 100 per cent of the corporate income tax due for investment in regions with high unemployment;
- Bulgaria offers one of the most-attractive tax environments for business in Europe, with benefits such as the corporate income tax rate of 10 per cent, a flat personal income tax rate of 10 per cent and a two-year VAT exemption for imports of equipment for investment projects above EUR 5.0 million that create at least 50 jobs;
- The most common type of organisation for foreign investors is a limited liability company. The required minimum for registering a limited liability company is one euro. Other typical corporate entities include joint stock companies, joint ventures, business associations, general and limited partnerships, and sole proprietorships; and
- The taxability of subsidiaries or branches of foreign commercial operations active in the country would depend on the existence of a bilateral treaty for the avoidance of double taxation between Bulgaria and the entity’s host nation. To this end, Bulgaria has concluded 68 agreements on the avoidance of double taxation, including the United Kingdom, the United States, Russia, Germany and Japan. This is a sizeable number, and greatly reduces risks to investors and businesses seeking to operate in Bulgaria.
Tourism in Bulgaria
Bulgaria offers excellent conditions for tourism. The Black Sea Coast has become world known for its wonderful geographical and climatic conditions – warm seas with almost imperceptible tides, well wooded shores and vast beaches of golden sand. Modern resorts such as Zlatni Pyassatis, Drouzba, Slunchev Bryan, Rousalka, Alberta, D’uni, St Constantine and Elenite offer a diversity of accommodation including 4 and 5 star global brand hotels and provide the best conditions for rest and recreation. Cruise ships and luxury yachts dock at Bulgaria’s Black Sea ports for their passenger to enjoy coastal environment and cities.
Each of the Bulgarian mountains has an identity of its own – their snow-capped peaks shimmering in the sun, covered by thick pine or deciduous forests interspersed with fragrant alpine meadows. An extensive network of tourist trails is marked out providing many different routes to explore. There are numerous cosy chalets and pleasant holiday houses nestled into the mountain folds. The mountain and ski resorts of Bovovets, Bankso, Pamporovo, Malyovista, Velingrad, Yundola and many more collectively have over 200 kilometres of world class ski slopes and are equally attractive in summer and winter.
Bulgaria is also famous for its mineral springs (more than 500) with many of them used for Balneotherapy. Health resorts and spas have been built in Kyustendil, Vurshets, Sandanski, Pavel Banya, Hisar, Bankya and many more locations. The demand is high for health and wellness tourism combined with recreational/ecological tourism presenting new opportunities for development of contemporary medical and health integrated resorts in picturesque rural locations.
The rustic authenticity of the Bulgarian cuisine and superb wines define the Country’s gastronomy tourism. Chefs at high-end restaurants and small family run eateries across Bulgaria universally celebrate the Country’s vast selection of local, natural and organic produce. By focusing attention on the native ingredients and innovative ways of presenting traditional dishes, chefs, winemakers and farmers are succeeding in promoting the value of Bulgarian gastronomy.
There are 2000 explored and unexplored caves in Bulgaria. In one of them, the Magoura Cave, the unique rock drawings dating back to per-historical times can be seen. The Belogradchik rocks, the natural pyramids at Melnik, Pobiti Kamuni (stone forests) near Varna, the Er Kyupria (Devil’s Bridges) in the Rhodopes are some of the most intriguing sights of Bulgaria. In contrast, cruising on the Danube River allows tourists a continuum of sights, cities and varied landscapes along the 480 kilometres of river.
Besides the spectacular natural features of Bulgaria, there are countless historical and cultural monuments, nine of which are included in the UNESCO Global Cultural and Natural Heritage lists. The Thracian tumlus (burial mounds) near Kazanluk and the Proto-Bulgarian Madera Horseman near Shoumen are two of them. Entire towns and villages in Bulgaria are nominated as museum towns – Turnovo, Koprivshtitsa, Old Plovdiv, Melnik, Zheravna, Kotel, Tryavna, Nessebur and many other places where the past still lingers.
Bulgaria’s diverse topography creates a broad canvass for adventure and sports tourism to suit everyone preferences and capabilities. Its mountain regions play host to trail hiking and biking, mountaineering, snow skiing, bungee jumping, hunting and fishing. The swift flowing streams cater for white-water rafting and kayaking. Taking to the air, there’s hang-gliding, paragliding, hot-air ballooning, and parachuting. The seaside offers a different dimension with boating, fishing, surf skiing, kite-surfing and scuba diving. Bulgaria has an international reputation in equestrian sports and is pursuing one in the world of golf with courses designed by international names in the sport.
Bulgaria’s strategic location and Sofia in particular, at the crossroads of three continents, combined with its excellent air and land transport connections to major European cites, makes it ideal for conferences, conventions, trade fairs and the MICE events. International business travellers make up over 14 per cent of international arrivals. In addition to the National Palace of culture and the INTER EXPO Centre, most larger hotels including Ramada, IHG-Intercontinental and Hilton have in-house function rooms and conference halls.
Tourist Arrivals and Overnight Stays over past 5 Years
[supsystic-tables id=14] Note: ‘Tourist Arrivals’ only includes tourists who stayed overnight in registered accommodation. SOURCE: NATIONAL STAISTICAL INSTITUTE[supsystic-tables id=15]
Profile of Accommodation by Tourist Destinations – 2017 and 2018
[supsystic-tables id=17] Notes:SOURCE: NATIONAL STATISTICAL INSTITUTE- Northeast Region statistics exclude Varna
- Southwest Region statistics exclude the capital city, Sofia
- Southeast Region statistics exclude Burgas