 Frequently Asked Questions about acquiring property in Bulgaria
1. How do I purchase a property in Bulgaria?
Foreign nationals are allowed to purchase land in Bulgaria only though setting up a company. Foreign citizens are not allowed to purchase land in Bulgaria as a physical person. If you purchase a house you need to set up a company in Bulgaria and we can assist with that. As the company will own the land and you own the company, this is just a legal work around.
The first step in the purchasing procedure is to pay a deposit of 10% of the purchase price of the property (in some special cases we require 15% deposit). Once we receive the deposit we sign a preliminary contract with the owners so we could guarantee the availability of the property for at least 30 days. During these 30 days we will have to register your limited company and prepare all the necessary papers for the deal. In order to start the registration procedure we require you to sign the papers that are necessary and to pay the amount of 600 euro, which is the cost for a company registration.
2. Are there any hidden fees?
No, when you buy a property in Bulgaria trough us, you pay the advertised price of each property as indicated on our website, 600 euros for the company registration, unless you already have a registered company, and 3% for notary fees and taxes. Feel free to contact us or book a viewing trip.
3. What is the legal treatment of foreign investors in Bulgaria?
Bulgaria has one of the most liberal foreign investment laws in the region regarding Bulgarian real estate. 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 acquire only buildings but not land. In order to obtain the ownership of land in Bulgaria all non residents should buy the property as a juridical person not as physical one, in other words, register a company on your name and buy the property trough it.
4. How can be established an enterprise with foreign investment in Bulgaria?
As far as Bulgarian houses, villas, apartments and limited ownership rights (the right of use, the right to build a house, etc.) are concerned, you can directly purchase them as a person.
When talking about Bulgarian real estate with land, you need to set up a company that will be the owner of the property. Setting up a company in Bulgaria is relatively easy. All you need is a good solicitor or barrister at law. There are other ways to do it, like:
* Establishing a joint venture with existing local companies;
* Setting up a new venture;
* Acquiring a company through privatization;
5. Which are the preferred types of business organizations with foreign investment?
The most common form of organization for foreign investors is a limited liability company. Other types are general partnership, limited partnership, joint-stock company, sole proprietorship, joint venture, branch, holding, cooperatives, representative office. Limited liability companies, unlimited partnerships, public limited companies, limited partnerships, holdings and cooperatives are legal entities. Branches and representations are not independent legal entities: branches may engage in economic activities, they have their own property and compile a separate balance sheet; representations may not engage in economic activities.
6. Is the extent or amount of foreign participation in companies limited?
No, it is unlimited.
7. Can foreigners acquire ownership rights over land in Bulgaria?
Foreign individuals can not own land (this is a Constitutional prohibition). However, the Foreign Investment Law removed the restrictions on acquisition of land by locally-registered companies with foreign participation. By setting up or joining a company incorporated under the Bulgarian legislation foreign persons can acquire full land ownership rights including ownership rights on agricultural land.
8. What are the living costs in Bulgaria? How much one pays for house insurance, gas, electricity, local and national taxes, to drive a car?
It's not possible to compare living costs in Bulgaria and Western Europe. Living costs in Bulgaria are extremely low! For example the food is generally twice cheaper than UK. House insurance: around 100-200 EURO per year depending on the type of house, together with the belongings and furniture inside. For a property of price 30,000 EURO insurance against theft, flood and fire costs about 125 EURO per year with a decent insurance company. Gas: the gas system network is not developed in Bulgaria yet. People here mostly use electricity to cook. For heating: there are central heating systems in the big cities: monthly costs for a 2-bedroom apartment around 120 EURO. In the small places people use charcoal and wood, which is even cheaper way to heat a house. For electricity, when used for cooking, light or hot water one pays about 30 EURO per month. Local and national taxes for owning a property: depending on the place where the property is located, the most expensive area is the capital Sofia, where the annual taxes of 2 bedroom apartment are around 150 EURO per year, but the rest of the country is around 80 EURO per year.
Driving a car in Bulgaria: There are few annual fees that must be paid every year to drive a car in our country:
* Driver responsibility insurance: 35 EURO per year
* Road tax (depending on the engine power): around 55 EURO per year for a car of 2000 cc sm. engine.
* MOT: 12 EURO per year
Fuel prices: petrol: 1.05 EURO/L, diesel: 0.95 EURO/L, LPG: only 0.50 euro/l. Most of the cars in Bulgaria are equipped with LPG systems, so cars are mostly fueled with the non-pollutant and very cheap propane gas. There are many petrol stations everywhere, many garages to service the cars (very cheap though). The insurance for a brand new car is around 800-1500 EURO per year, depending on the price of the car.
9. What are the fees and commissions charged by BG Properties For All Ltd.
Agency commission: Our agency commission covers many important services which we provide for the buyer during the process of purchasing - such as: solicitor's assistance, full checks on the title deeds and the ownership, preparation of all necessary contracts, paperwork, communication costs. etc. We protect the rights of the buyer!
Other expenses: Depending on each property there are other expenses like: notary fees, tax when purchasing property, stamp duty, checks on the property ownership, etc. These additional charges are usually around 2,5-3% of the price.
Company registration fee: Our team of lawyers will fully assist you in registering your LTD company in Bulgaria. For registering a company we charge a fee of 600 Euros. Please note that the company must prepare and submit annual tax declarations as well as keep accountancy books. Therefore, we have a qualified accountant to take care about the company's books. If you do not operate with the company, meaning if you do not perform any business activity, our accountant charges 30 euro per year.
Viewing trips charges: If our company car is used for the viewing trips we charge 0.20 Euros (approx. 0.14 GBP) per km to cover the petrol charges and wear costs of the vehicle. This charge is lower than the price charged by the taxi companies in Bulgaria. This fee is non-refundable.
Managing properties: BGPropertiesForAll is offering comprehensive property management services. We could take care of the rental of your property to the maintenance. Contact us for more details.
|
