According to the Bulgarian Constitution and legislation foreign persons and companies can invest in real estate in Bulgaria either personally or through a local legal entity. Generally speaking, foreigners as persons can buy the building, the right to build and other land related rights such as the right of use & passage; however they cannot buy the actual land. Bulgarian citizens and companies (including such with foreign owner) can obtain the ownership of Bulgarian land.
The most popular and preferred by non-residents ways to become the real estate owners are:
Property without land
It is generally accepted that the purchasing of an houses, villas, flats does not require you to set up a company, as it has no or very minimal land ownership. In such case you can own only a right to construct, which property right is enough for the ownership of a property.
Property with land
If the property you intend to buy comes with land then you will need to register a Bulgarian Ltd. company to own the land. The company that you own will then legally own title to the land. Forming the company is relatively straightforward and Balkan Dream Properties can help you with this.
Forming a Limited liability company (Ltd)
Any foreign or Bulgarian person (judicial or physical) can form an Ltd. The person will be liable for the company's obligations to the value of his/her share in the company's registered capital. The shareholders conduct preliminary discussions on the commercial activities they intent to engage in. Based on the agreement, the articles of incorporation are prepared and signet by all shareholders.
A dedicated bank account is opened to collect all share capital. The minimum share capital required is 5 000 leva.
The company exists from the moment it is added to Commercial Register of the district court of where the company will be based. The entry is made upon issue of a district court decision for the incorporation. The following documents must be available at the time of the submission of registration application to the district court.
1. Articles of incorporation
2. Memorandum for appointment of director/directors
3. Proof that each shareholder has paid at least one third of its interest, but not less than 10 leva.
4. Proof that at least 70 % of the registered capital has been paid.
The process of forming your company can take anywhere between a few days to a few weeks. Finally, your new company will need to register immediately with the National Tax Register Authority.
Value Added Tax
Transactions with land and lease of property for residential purposes are exempt from VAT; all other real estate transactions are subject to VAT at the uniform rate of 20%. The buyer is entitled to a VAT refund, provided that it is registered for VAT purposes.