The Republic of Bulgaria is located in South Eastern Europe. Bulgaria borders five other countries: Romania to the north, Serbia and the Republic of Macedonia to the west, and Greece and Turkey to the south. The Black Sea defines the extent of the country to the east.
With a territory of 110,994 square kilometers (42,855 sq mi), Bulgaria ranks as the 15th-largest country in Europe. Bulgaria’s capital city and largest settlement is Sofia, with a permanent population of more than 1,378,000 people. The 378-kilometer Black Sea coastline covers the entire eastern bound of the country.
Bulgaria is a parliamentary republic. The unicameral National Assembly consists of 240 deputies who are elected for 4-year terms through a mixed electoral system. Parliament selects and dismisses government ministers, including the prime minister, exercises control over the government, and sanctions deployment of troops abroad. It is responsible for enactment of laws, approval of the budget, scheduling of presidential elections, declaration of war, and ratification of international treaties and agreements.
The economy of Bulgaria is an industrialized, open free market economy with a moderately advanced private sector and a number of strategic state-owned enterprises.
Economically Bulgaria can be qualified as a developed industrial-agrarian country and an attractive place for active tourism and sport-lovers because of its incredible natural recourses. Bulgaria is classified as an upper-middle-income country by the World Bank with a gross national income per capita of US$ 13 400. The country is expected to join the Euro zone in 2013 and has implemented all criteria for joining the Schengen Area according to the European Council.
According to the World Bank, in 2006 Bulgaria attracted the highest levels of foreign direct investment, as a share of GDP, among Eastern European countries. In early 2007, to attract additional foreign investment, the Bulgarian Government lowered corporate tax rates to 10%, reportedly the lowest rate in Europe. A flat-tax rate of 10% for personal income, in place as of January 1, 2008, has helped to bring down domestic labor costs and reduce the share of the “gray” economy. In response to local governments’ demand for financial independence in 2006, parliament passed fiscal decentralization of municipalities, granting them authority over collection and administration of some taxes, thus further enhancing local economic stability.
On 1 January 2007 Bulgaria was admitted as an equal member of the European Union. This led to some immediate international trade liberalization, but there was no shock to the economy. The government is running annual surpluses of above 3%. This fact, together with annual GDP growth of above 5%, has brought the government indebtedness to 22.8% of GDP in 2006 from 67.3% five years earlier. Low interest rates guarantee availability of funds for investment and consumption. For example, a boom in the real estate market started around 2003 and has not subsided yet. At the same time annual inflation in the economy is stable. The Bulgarian currency is Bulgarian Lev.