Procedure to Purchase Bulgarian Real Estates

The Bulgarian Act on Foreign Investment allows foreigners to buy Bulgarian Real Estates - buildings but not land. This restriction is simply avoided by setting up a Bulgarian company which then owns the land. It is one of the main reasons that Bulgarian Real Estates prices are so attractive compared with Western Europe but it will not last.

Information On Forming A Company in Bulgaria if you buy a Bulgarian Real Estates - bulgarian villa with land or land

Private Limited Company (a limited liability company) - "OOD" - it is a commercial company with share capital owned by its members whose liability is limited to the amount of the capital subscribed. A private limited liability company may be founded by one or more persons, including foreign natural or legal persons. The minimum foundation capital is Leva 5,000 (about £ 1 800) divided into shares with nominal value of Leva 10 each and at least 70% of the capital must be paid up on foundation. Contributions to the foundation capital may be paid in cash or in kind. The statutory bodies of the private limited companies are the general meeting of shareholders, which must be held at least once a year, and the managing director or board of directors.
After the forming & registration of the company the foundation capital (£ 1 800) can be withdrawn and attributed to the final completion payment.

Company Formation

A company is considered incorporated as from the date of its registration into the commercial register of the relevant district court. The application for registration furnished with certain documents required by the law shall be filed with the court by the elected managing body.

Private Limited Company - in order to be registered in a commercial register, a private limited company must:

•  produce its articles of association (Memorandum of Association - in the case of a single-person private limited company); the Law on Commerce stipulates the obligatory
provisions of the articles;
•  have appointed a managing director (or board of directors);

This information together with details of the management, etc., is recorded in the commercial register and promulgated in the State Gazette.

All foreign buyers purchasing Bulgarian Real Estates property must be aware that in Bulgaria there are such terms as "tax estimation price" of the Bulgarian Real Estates and "purchase price" of the Bulgarian Real Estates. The Tax estimation price (similar to retable value in the UK ) is for the purchases of real estate taxation and is much lower than the actual selling (purchase) price of the Bulgarian Real Estates.
This is for obvious tax reasons on their behalf.
This practice is commonplace in Bulgaria and should not be regarded as unusual and will not effect your ownership of the Bulgarian Real Estates, but will actually lower the costs involved to purchase.

• Lawyer's fee for the company formation including all the other notary and court taxes is 500EUR.
• Lawyers fee for the transfering of the Bulgarian Property on your company name is 200EUR without the notary fees and the local costs for the bulgarian property.

Above all: Don't worry! It's not as difficult as it would at first appear!

We are here to help, with our associates in Bulgaria , at each step of the way.