Wealth Management in Bulgaria and Implications of Risk Profile and Taxation on Wealth Allocation

The purpose of this study is to review and investigate the wealth management opportunities for Bulgarian citizens, risk profile of individuals, and their wealth allocation in view also of the applicable tax system. Wealth management opportunities are examined based on their trading access, requirements, offering entities. In terms of the Bulgarian individual tax system, certain tax exemptions and preferences for specific wealth management products are applied as the study aims also to investigate whether this affects wealth allocation. Data for wealth management products and services and for tax systems is obtained from publicly available sources. Respective literature related to wealth management, financial assets, Bulgarian wealth management products and services, tax system for individuals, and per wealth management products are reviewed. Findings show that in Bulgaria, there are various wealth management product alternatives. General conclusion, based on semi-structured interviews among 50 Bulgarian citizens, selected on a random principle, is that Bulgarian citizens are conservative to medium risk profile, requiring wealth preservation. Interviewed citizens, lack deep knowledge, expertise, and understanding of the wealth management products and services, their pros and cons. Tax preferences and applicable exemptions on some wealth management products are not significantly affecting wealth allocation.