How to but real estate in Bulgaria?

How to but real estate in Bulgaria?

Steps of buying property in Bulgaria:
1. Having legal person
2. Conducting preliminary contract
3. Placing the unit in commission
4. Signing the normative act

Now you are full owner of property in Bulgaria!
According to the Bulgaria’s law about overseas investments, foreigner could purchase accommodation but not land. Nevertheless, there is a way out which is recommended to our clients – it is set up a company and register the land on it.
It should be mentioned, that with Bulgaria entrance in EU, laws are changing all the time and improves according to the laws of EU countries and in the near future the process of buying property will be easier.
First what should be done by lower – it should be known if plot belongs to the property or not? For example, to some apartments in Bulgaria belongs “ideal part” (interest) of plot which is under the house. In case if “ideal part” of land belongs to the apartment it is necessary to set up a company.

Registration of the company in Bulgaria could be done in the following procedural and institutional agencies:
• General partnership;
• Limited partnership;
• Limited liability company;
• Joint stock company;
• Branch;
• Trade delegation;
• Cooperative.

Registration of the company in Bulgaria is absolutely accessible for any foreign physical and legal people: there are no limitations for taking part in local enterprises for foreigners.

Registration of the company often made in a form of Limited liability Company. Registration of the company in Bulgaria in a form of LLC could be made by one or several founders, as physical as legal persons who are responsible for undertakings of their company in limits of their deposit in its ownership capital.

The minimal permit while registration of the company in Bulgaria in a form of LLC ownership capital is 5 000 Bulgarian leva (it is a bit more than 2 500 Euro by current course), minimum 70% from which should be pay before the beginning of the process of registration of the company in Bulgaria. The rest of the sum of ownership capital should be paid in a term not later two years from the day of registration the company in Bulgaria.

All founders of LLC should take part in the general meeting of founders, frequency of which according to the Bulgarian legislation is not rare than one time per year, starting from the date of registration of the company in Bulgaria. Power of general meeting of founders spread on adoption of statute and making changes in it, confirmation of annual financial report, distribution of profit after payment the taxes, changing of ownership capital, designation of Managing director.

Control the company is making by Managing director who is nominate by general meeting of founders, firstly as a part of registration procedure the company in Bulgaria. Managing director has a right to represent the interests of the company on the basis of its statute.

Main benefits which can give registration of the company in Bulgaria in a form of LLC:

• Minimal ownership capital stock, only 70% which is necessary to pay before registration the company in Bulgaria;
• Leading an audit is necessary only in a case of presence of special demands, connecting with the business activity of the company (banking, insurance and etc.);
• Absence of necessity of making and supporting reserved funds as at the moment of registration of the company in Bulgaria as further;
• Limited responsibility of founders.

Community buy a right of legal person from the date of its registration in trade register in the corresponded region of the court. In the standard set of the documents of the company includes:

• Registration certificate
• Tax certificate
• Certificate of putting company in register of social security
• Decision of the court about company’s registration
• Consistent report (Statute)
• Print of the company


Forming of purchase and sell:

Sides sign preliminary contract, according to which, buyer is obliged to sell the unit to the buyer by said price and guarantee this in the conventional period (usually in a month after finishing the construction).
There said following conditions, specifically the detailed description of buying unit, term of its placing in commission, price, conditions and terms of payment. In term of specified by preliminary contract, sides conduct the contract in a form of notary act. By the time of signing the notary act all calculations between sides should be made.

Notary act about transferring the property and confirming the rights of property for real estate is forming by the notary in the region where the unit is situated. After signing the document by the buyer and seller and witness their signatures, notary gives notary act in regional court. Judge by framing makes changes of circumstances by the unit in the State Register of the property (similar operation is made in Russian BTI). Note framing is making in the notary act.

Before making a deal, notary get a certificate from the same register about absence of charges on the unit, so, about it “cleanness”. In certificate is writing the absence of unit’s mortgage for using the unit by third persons, prohibition for selling, open court cases and etc. It proves the belonging of the unit to the particular person – seller. Also, the important document is the state assessment the cost of unit, which is given by territory tax service. Sales price of the unit which is written in the notary act could not be less than this price. On the basis of sales price, it is defined the size of state duty on the deal and notary rates. In general they are 4%.

Expenditures while buying though property:

1.Registration and stamp duty for disposal the property

Cost of the property /in leva/Cost of the gatherings/in leva/
From 100 lev to 1000 lev 15 lev + 1.5% if the sum is more than 1000 lev
From 1000,001 to 10 000 lev 28.50 lev + 1%if the sum is more than1000,001 lev
From 10 000,001 to 50 000 lev 118,50 lev + 0,5% if the sum is more than 10000,001 lev
From 50 000,001 to 100 000 lev 318,50 lev + 0,2% if the sum is more than 50000,001 lev
More than 100 000 lev 418,00 lev + 0,1% if the sum is more than 100000 lev but not more than 3000 lev


2.Local gatherings and taxes – 2% from the cost of the property.

Visa information:
Purchasing the property in Bulgaria by physical person does not give a right to the foreigner for the permanent living or working on the territory of the country. Being the owner of the apartments, foreigner could use his property for rest getting tourist visa type C (double with the term for 90 days). During the year it is allowed to form two such visas.

Purchasing apartments and forming ownership for legal person let the person to have a year business visa with the right of being on the territory of Bulgaria till 180 days. If foreigner is interested in long staying in the territory of the country then company should be not nominal but working. It is required to create working places for Bulgarian citizens with paying insurance and social gatherings for tax administration of Bulgaria. In this case there is an opportunity to get Bulgarian permanent residence card.

It is necessary to know that permanent residence card is giving for a year and it needs to be prolonging only in those cases when foreigner has lived in Bulgaria more than 180 days per year. If the term of living does not exceeded the half a year time fence then for Bulgarian visa administration it means that foreigner is in want of long staying in Bulgaria and year business visa (type D) with the term of staying 180 days is enough, it means that permanent residence card will not be prolonging.

Working form is registered on the territory of Bulgaria, is not the only one way of getting Bulgarian permanent residence card. For foreigners of the working age there is an opportunity of opening the agency of foreign firm and designating the representative who is together with his family getting Bulgarian permanent residence card. In this case, commercial activity is not necessary for the agency, and it does not pay taxes.

After regular prolonging the permanent residence card during five years foreigner gets all-year residence and then for two years could submit the documents for getting Bulgarian citizenship. There is a quick procedure of receiving all-year residence in Bulgaria for foreign investors who is ready to invest in economic of the country 500 thousand Euros. These means could be spent on the private needs, for example for buying a house, restaurant, yacht. However, before pay the big purchases on the territory of Bulgaria; money should be legalized of the proper way.

According to the law about foreign citizens, there are few types of visa:
Transit visa is necessary for traveling through Bulgaria to the other country and let stay on its territory not more than 24 hours.
Short-term visa give an opportunity of single or frequent comings in Bulgaria on 90 days during 6 months.
Long-term visa gives an opportunity to come in Bulgaria and in further ask for permission of long or permanent staying.
Long-term visa is valid during 6 months and let to its owner stay in the country till 90 days. All applications for getting the visa should be given to the corresponded diplomatic agencies and consul departments all around the world.
Visa-free coming – citizens of some countries could come to the territory of Bulgaria without visa. For citizens of EU (except Ireland and England) for staying in Bulgaria till 90 days during each 6 months do not need visa. Citizens of Australia, New Zealand, Japan, Ireland, England, the USA, and Switzerland could stay in Bulgaria for 30 days in each half year. Counting of the stay is starting from the first day staying in Bulgaria according to the marks in foreign passport.