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The Republic of Bulgaria is a parliamentary democracy. The capital city and seat of the government is in the city of Sofia. There, a 240-member National Assembly meets that is elected on basis of proportional representation. The head of state is a directly elected non-executive president; he has the power to delay legislation, but not to block it.
The following timeline lists the governments in power, beginning with the post-war communist regime through today.
| 1947: |
Bulgaria became the communist People's Republic. |
| 1989: |
Democracy came to Bulgaria with a parliamentary government replacing the single state rule of the communists. Unfortunately, the same communists were able to regroup under the Socialist Party (BSP) and win the first election; nevertheless, it was the country's first freely elected government. |
| 1991: |
A new, non-communist party was able to gain control after a new election. The Union of Democratic Forces (UDF) formed the next government. |
| 1992: |
A technocratic government backed by the BSP regained control of the government. |
| 1994: |
BSP itself now took power; even though the communist were still involved, the democratic structure never faltered. |
| 1997: |
A severe economic crisis in 1996-97 forced an early election was won by an UDF-led center-right coalition. |
| 2001: |
The newly founded Simeon II National Movement (SNM) won the election; led by the returning royalty figure of Simeon II. |
| 2005: |
BSP won the election but fell far short of winning an absolute parliamentary majority. After lengthy negotiations, the BSP, the SNM and another party, the MRF, formed a governing coalition that currently is running the country. |
Currency
The currency of Bulgaria is the Lev (BGL). Beginning in 1997, an IMF-backed currency board was introduced; in 1999 the Lev was pegged to the Euro. The currency board is intended to continue until Bulgaria adopts the euro (likely in 2010-11).
For U.S. investors, changes in the exchange rate between the value of the Dollar and the Euro will affect the value of their investments in Bulgaria.
Taxes
Value Added Tax (VAT): Value-added tax (VAT) is levied on most all transactions in Bulgaria at a single rate of 20%. Property purchased from an individual owner must include VAT; this amount is normally factored into the pricing of the unit. When property is purchased from a company there are no VAT costs (technically, the tax is paid, but then refunded by the government shortly thereafter.)
Local Taxes: Personal income-tax rates are progressive, ranging from 20% to 24%. The rate of tax on company profits is 15%. The owner of a building is obliged to pay a real property tax equal to 0.15% of the book value of the property (the book value has no relation to the transaction price; it is usually very low, therefore this tax in generally negligible.) In addition to the real property tax, owners also pay waste-collection fees (also minimal.) Arable land is exempt from local taxes.
Transfer Taxes: Transactions of property involve notary and municipal fees. These are usually based on the book value of the property, which is generally very low compared with the actual transaction price; therefore, these costs currently are very low (usually between 0.4 and 1.2%.)
Capital Gain Taxes: The taxes that investors dealing in Bulgarian property will encounter vary depending on factors such as tax domicile and the length of the investment holding period. Most property purchased by foreign individuals is bought through a wholly owned local company created for that purpose. Tax rates of 15% apply to all net profits for U.S. based investors, these payments can usually be subtracted from whatever taxes are due for that transaction at home.
Ownership Laws
Only Bulgarian residents and corporate entities can acquire title to land, non-residents may own buildings (though this is likely to change once Bulgaria joins the EU.) A foreign-based investor can invest in buildings if the land is not included or through the ownership of a local company (this is the most common method.)
Geography & Maps
Total Area: Area: 110,910 sq. km. / 42,822 square miles (slightly larger than Tennessee)
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Population Demographics
| Population: |
7,517,973 |
| Language: |
Bulgarian |
| Religion: |
Bulgarian Orthodox 82.6%, Muslim 12.2%, Roman Catholic 1.7%, other 3.5% |
| Life Expectancy: |
71.75 years |
Economics Statistics - General
| Economy: |
59% services, 29% industry and 12% agriculture |
| Industries: |
Electricity, gas and water; food, beverages and tobacco; machinery and equipment, base metals, chemical products, coal, refined petroleum. |
| Exports: |
Clothing, footwear, iron and steel, machinery and equipment. |
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