How To Invest In Bulgaria


This guide is for intrepid investors who are wondering how to invest in Bulgaria and its capital markets. Curious about investing in other frontier markets? Check out a list of our guides here.

Bulgaria is a country we covered last year just before the IPO of Sirma Group, one of the country’s biggest IPOs in the past decade. We were fortunate enough to get an insider’s look at Bulgaria with ELANA Trading’s CEO, Radoslava Maslarska, lending a hand (the article can be found here).

With a GDP per capita (PPP) of over $18,000, Bulgaria is much more developed than the usual frontier markets we look at. However, with a population of under 7.5 million and its location on the outskirts of Europe, it is a market that many investors usually overlook. This is unfortunate because with a total market capitalization of just under $5 billion USD and over 170 financial instruments trading on its platform, the BSE-Sofia offers some interesting opportunities for frontier market investors. Bulgaria also has the added benefit of being one of the easiest countries (out of the frontier markets we’ve looked at so far) to begin investing in.

Bulgarian Stock Exchange – Sofia (BSE-Sofia) Snapshot:

In operation since: 1997

Location: Sofia, capital of Bulgaria

Market hours: 10:00 – 17:00 from opening to closing auction, Monday to Friday

Currency: Lev (BGN), currently USD/BGN is at 1.80

Market Capitalization (as of 31 Dec 2015): BGN 8.59 billion combined ($4.9 billion USD): BGN 7.3 billion ($4.06 billion USD) in the BSE Main Market, BGN 1.26 billion ($700 million USD) in the BaSE Alternative Market

Listed companies (as of 31 Dec 2015): 171 total instruments, comprised mainly of 55 bonds, 14 Special Purpose Vehicles, and 95 equities

Taxes: No capital gains tax, 5% withholding tax on dividends, and 10% income and corporate tax

Main Index: SOFIX, composed of the top 15 stocks traded on the BSE

Secondary Indices: The BSE features 3 secondary indices: BGBX40 (40 shares of the highest turnover and median value), BG TR30 (30 equally weighted shares), and the BG REIT (7 REITs)

Can foreigners invest in Bulgaria?

Yes! There are few restrictions to foreigners investing in Bulgaria, either in the BSE or in more direct investment into the country. Both foreign institutional and individual investors are active in the market.

How to Invest in Bulgaria Through the Bulgarian Stock Exchange – Sofia

Step 1: Find a local brokerage firm accustomed to dealing with foreigners

Finding a local brokerage firm to help you through all the following steps can be invaluable as they can offer local insights and help smooth out the whole process. The BSE was home to over 50 companies that traded in the market in 2015, and thankfully they even published transaction and market share data for each brokerage firm.

In 2015, these were the top 5 companies by turnover value:

  • Euro – Finance
  • First Financial Brokerage House
  • Elana Trading
  • Real Finance
  • Capman

And these were the top 5 companies by number of trades:

  • Karoll
  • Elana Trading
  • Benchmark Finance
  • First Financial Brokerager House
  • Capman

The full list of brokerage firms can be found on the BSE website here, along with contact information.

Step 2: Open a Brokerage Account

From our research, trading in Bulgaria requires opening a brokerage account and little else. Most of the websites we visited had English versions, and document requirements were paltry compared with some of the other frontier markets we’ve looked at. The currency is also freely convertible so easy to transfer in and out of the country.

Required Documents:

  • Application form
  • Client classification forms (for individuals, to state they are non-professional investors)
  • Passport photocopies, notarized
  • Power of Attorney form

That seems to be it!

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