Property Buying Process and Regulations for Homeownership in Bulgaria

 

The Property Buying Process

Foreigners may buy buildings, the right to build and related rights such as the use of passage.

Foreigners are not permitted to buy land in Bulgaria.

Buying property in Bulgaria (excluding land) has been made easier due to the new Foreign Investment Act (1997) this act lifted requirements of foreigners to seek approval of the Ministry of Finance for such purchases.

When purchasing property with land, it is permitted that foreign Judicial and foreign physical persons may make their purchase via a Bulgarian registered company.  The intention is to provide opportunity to foreign buyers intending to engage in commercial activity in Bulgaria.

This restriction is now being publicly discussed and it is anticipated this will change in the future.  We will keep you updated as any changes  take place.

Bulgaria Diary Recommends that

Whilst the process of buying property in Bulgaria can be simpler  and far quicker than buying property in the UK, the process is different and so we would always recommend you employ the services of a English Speaking Lawyer to carry out all necessary legal checks and to also ensure title to the property.  Your lawyer should also check that there are no debts against the property you are buying and should you be purchasing off plan that the property developer has all the correct building permissions.

Cost involved on Purchasing Property in Bulgaria

We have dealt with this on our section property buying costs but just to run through again, it is advisable that you are aware of costs and fees you will incur when purchasing your Bulgarian property.

1.       Lawyers Fees

2.       Notary and Land Registry Fees (based on sliding scale in accordance of purchase price)

3.       Estate Agents Commission

4.       State Tax

5.       Title Deed Preparation

Registering a Company in Bulgaria

This is a service that your Lawyer will normally offer you.  The Company will be registered in your name and will allow you to buy via your company land in Bulgaria.  The purchase will be registered against the company and you as the sole owner will hold the shares in respective of the land.

Overview of Company Registration process and requirementsWho is eligible to Form a Limited Company in Bulgaria

Foreign or Bulgarian person judicial or physical.  This person or persons are liable for their companies obligation to the value of his or her shares in the companies registered capital.

Stages of Company Formation Brief Outline

1.       The shareholders (future) will conduct preliminary discussions as to the commercial activities that they are intending to engage in.  Based upon this the agreement, Articles of Incorporation will be prepared and signed by all shareholders.

·         The trade name, the seat and address of management of the company

·         The purposes and time period that the company is to be set up

·         Names of respective shareholders and trade names

·         Registered capital.  Should full amount not been paid at incorporation, articles shall set time and terms of payment.  This final instalment of whole capital must not be longer than two years from date of registration of company.

·         The number of shares taken by each of the shareholders

·         The manner and management of representation

·         The privileges of shareholders

·         Any other rights or obligations of the shareholders

Company Capital

A bank account will be opened to collect all share capital and the minimum capital is 5,000 Leva.  Shareholders at the time of their company registration must pay at least 1/3 or respective shares.  The requirement is that at least 70% (3,500 Leva) has been raised at the time of registration.

Registration of your Company

Your company will exist from the time it has been added to the commercial Register of the District Court, where your company will be based.  This entry is made upon issue of District Court decision for its Incorporation.

Documents which must be made available at submission of Registration and application to District Court

1.                   Articles of incorporation

2.                   Memorandum for appointment of Company Director or Directors

3.                   Proof that each shareholder has paid at least one third of its interest (not less than 10 Leva)

4.                   Proof that at least 70 per cent of the registered capital has been paid

Registration entry  in the State Gazette

The Bulgarian State Gazette, the official paper of Bulgarian state.  All of Bulgarian legislation is published there in order for the law to take effect.  Entry of your company in the Commercial Register does not complete the company formation.  It announces to the general public the formation of the company.

Share Capital required during the Registration and Formation of a Bulgarian Company

Share Capital 3,500 Leva equals 70%