LEGISLATION
In the Republic of Bulgaria legal aspects of acquisition of property by foreigners (citizens and legal entities) are governed by a number of normative regulations. The most important of these are statements of the Constitution of the Republic of Bulgaria, Law on Aliens of the Republic of Bulgaria, Law on Bulgarian Citizenship, Commercial Law, and Law on Foreign Investments.
According to the Constitution of the Republic of Bulgaria, foreigners and foreign legal entities can not buy property right to land. On the 18th of February 2005 in the third reading Public gathering of the Republic of Bulgaria accepted amendments to the Constitution, under which foreigners and foreign legal entities can buy property right to land under conditions arising as a result of country's joining the EU or in accordance with an international agreement, that has been validated and has become effective in respect to Bulgaria. The amendments also provide for possibility of acquisition of land by foreigners by means of hereditary succession.
NOTARIAL REGISTRATION OF PURCHASE
Upon signature of notarial act by the seller and the buyer and verification of their signatures, the notary takes it to the regional court. The judge introduces changes in the property information into the State Register of Real Property and makes a note on the entry in the notary act. Prior to settlement of transaction the notary is provided with certificate (written extract) from the Register confirming property's 'juridical cleanliness'. The certificate includes the following information: mortgage in respect to the property, rights of the third parties to use the property, prohibition against sale, open legal cases, etc. It also confirms the property ownership by a certain individual - the seller.
The legislation allows purchasing of apartments by foreign physical parties, foreign legal parties, and local parties. Simultaneously with the registration of an apartment there gets registered an 'ideal part' of the land plot occupied by the building. It is not prohibited to register a firm under the apartment's address or use it as an office. Apartments registered under the name of foreign physical parties are not an exception. Foreigners owing apartments have the same rights as the Bulgarians, including the right for leasing.
Selling land (both the land plots for construction and agricultural land) to foreigners is prohibited. Foreign firm with Bulgarian participation (that is when at least 1% of the capital belongs to the citizens or legal entities of Bulgaria) has the right to buy land. The same situation is with the firms registered in Bulgaria, founding parties of which are foreign physical or legal parties. According to all the legislative regulations they do not differ from the firms founded by the citizens of Bulgaria.
The most suitable form of business for small and medium capitals is limited liability company (in Bulgarian - 'Дружество с ограничена отговорност – ООД'). When Bulgarian property is purchased by foreigners, LLC (or its form - private limited liability company) is the most desirable form among all kinds of legal entities provided for by the Bulgarian commercial law. Minimum amount of chartered capital of LLC and PLLC is 2 lv. LLC have become very popular in Bulgaria due to the advantages they provide.
Unlike collective company, limited liability company does not require personal participation of founders in the company's activity; they risk only the amounts deposited into the chartered capital. At the same time, limited liability company differs from joint stock company (another form of capital company) by the simplified registration procedure, lesser transparency of the activity results, and small amount of the minimum chartered capital.
By the time of application for the registration, chartered capital of the firm should be deposited in the amount of no less than 70%, and the remaining part must be deposited within a year. Share of a single participant in the chartered capital can not be less than 1 lv. Number of participants is not limited. One or several founders or a specially appointed person, who is not a founder, can run the company and represent it. Number of founders can be changed, and after the registration the founders can be excluded from the firm, as well as the new founders can be included. All the changes into the constitutive documents must be registered in court.
A single physical or legal party can also be a founder of a LLC. In such case it is called 'Private LLC' (in Bulgarian - 'Единолично дружество с ограничена отговорност – ЕООД'). Founder of PLLC can personally run or represent the company or appoint another person. As for the other aspects, PLLC is similar to LLC.
