Setting up a Bulgarian Property Investment Company
The next stage is to determine whether the property that you want to buy has land associated with it or not.
In order to own land in Bulgaria, you either have to be Bulgarian or buy it under a Bulgarian registered company. This is because under the current legislation, Bulgarian law forbids foreign individuals from owning land. At this point some of you may be tempted to walk away. However, it's really just a formality, and perfectly above the law, so what are you waiting for?
If you are buying an apartment, you can generally get away without forming a company. Apartment purchases are, therefore, comparatively more straight forward. But there are exceptions. If you are buying an apartment that has land associated with it, you will also need to form a Bulgarian company. So don't be fooled by those agents who may lead you to believe that you will not have to form a company if you are buying an apartment. There are exceptions.
If you are buying a typical new-build apartment that comes with an extra two or three metre square storage area, then you are virtually assured of a company-free purchase. Perhaps you always wanted to be your own boss anyway, and setting up a company comes to you naturally - or perhaps becoming the sole or joint directors of a company overnight appeals.
Whatever your motivation, let me take you through the fairly simple process of setting up a Bulgarian company to allay your fears. Whether you are working with a UK-based agent, or one of the local agents, setting up a company couldn't be easier. There are only three real decisions that you need to make:
1. What do you want to call your company?
2. Who are the directors (shareholders) of the company and what stake do they each have?
3. What registered office address do you want to use for the company?
Meeting with the Agent to Discuss the Company Formation
It all starts in a meeting that usually includes your local agent/representative, a translator and a solicitor. Of course, whether you appoint your own solicitor or use the one recommended by the agent, is your choice. Common advice would be to choose your own independent solicitor. It's all a question of what you are comfortable with at the end of the day. If you are prepared to trust your agent, then why not trust their recommended solicitor? It's not really my place to influence your decision - just be sure that you are comfortable either way.
What you will be told (usually prior to this meeting) is that you need to set up a company bank account, with an initial deposit of 3,500 Leva. In some cases, you will be told 5,000 Leva. In actual fact, the initial amount for the creation of the company can be as low as 3,500 Leva. So, what happens to this money? Well, it's ultimately destined to come back to you, after its short vacation in your newly set-up company bank account. So don't worry, it's not a fee.
Surely there are more costs? Well, yes, there is the fee for setting up the company itself - which involves various paperwork and court appearances. Thankfully, this can all be done by the appointed solicitor for you, provided you provide them with power of attorney.
How Long Does it Take to Set Up a Company?
As for the fees associated with setting up a company, these vary considerably. It depends on how long you are prepared to wait for the company to be setup. The average duration for the set up of a company is between 20 and 30 days. For this, you should not have to pay more than 600 euros in total.
If you don't have 20 to 30 days and need to act faster, some agents can offer a fast-track service. In this case expect to pay more. Anything up to 1,200 euros! Again, you get what you pay for. As long as you are comfortable, then don't worry. Compared to the amount you are investing in the property, this is peanuts!
