How to buy real estate in Bulgaria?

The five steps of the real estate investment process in Bulgaria for foreign citizens

The process is relatively straightforward. If the intentions are serious it is needed as a prerequisite to start a company in Bulgaria (1). In the same time it is necessary to make a due diligence investigation of the proposed estate (2). After that a preliminary contract (3) is signed. The process is terminated by notary deed (4). After the deal the buyer has to comply with the bulgarian legislation (5)

1. Company Formation

The choice in the most of the cases is between OOD and EOOD. The OOD is a limited liability company with shareholders. The EOOD is very similar limited liability company but it has only one shareholder. The decisions at this step are very important because they can have very remote consequences. For example in a case of divorce, under the bulgarian law if the husband has a EOOD it is considered as a commercial propery not icluded in the family property.

2. Due diligence report

The due diligence investigation will assure as far as reasonably possible that your busines transaction is secure.

3. Preliminary contract

The preliminary contract obliges the parties to sign a final contract for the tranfer of the property. The preliminary contract has to be in written and signed by the both parties. It is a good practice to sign it before a Notary public.

4. Notary Deed

The transfer of the propery under the Bulgarian law is by a Notary Deed. The preliminary contract has the offect to oblige the seller and the buyer to sign a the Notary Deed. If one of the parties refuses to do so, the other can enforce the preliminary contract in court, in this case the court decision will replace the notary deed.

5. Tax obligations of the buyer

Under the bulgarian law it is not possible for foreign physical person to own directly a plot of land. The legal solution is to incorporate a company in Bulgaria, so the company as incorporated in Bulgaria is a bulgarian company who has the right to own a real estate. This is a legal fiction but it is useful, on the other hand every company has multple obligations to comply with. The most important are the tax obligations of the buyer.