If you come from some European Union member state, the United Kingdom, Canada, USA or Israel you do not need a special visa when you arrive in Bulgaria. The citizens from different EU countries may stay in the country for up to 90 days to every six months, considering the date of arriving. For the residents of North America, Canada, Great Britain and Israel this duration is up to 30 days within a single six-month period. So, it will not matter whether you leave and re-enter Bulgaria in this period, especially the total number of days is what matters. Travelers from the other countries should take an entry visa at any rate in advance from the particular Bulgarian Embassy or Consulate in their own country. For receiving it they generally will need to provide a special letter of invitation from a Bulgarian host, on some standardized form, available in each municipality, or from a certain business partner, as well as a letter from their company or institution if they tend to visit Bulgaria on business. In order to obtain a constant residence permit for 1 to 5 years every foreigner should either have a company in which work at least 10 Bulgarians or invest near 500 000 dollars in the country. If you want to get a maximal five year residence permit, you will soon have to make a specific test in Bulgarian language proficiency. Another traveling option are the transit visas that allow a stay in Bulgaria of a single day or less. It could be better for you to remember that airline tickets and some evidence of right of entry into the next country will be always required, and only the possession of airline tickets does not guarantee the granting of an entry visa. At recent days, Bulgaria has liberalized its total visa policy as a proper answer to conform to various international standards. Thus, a valid passport is the only thing required for visitors from the European Union and EFTA member states to stay in Bulgaria for thirty days. The national laws declare the same conditions for the citizens of Cuba, Croatia, Czech Republic, Estonia, Hungary, the Republic of Korea, Lithuania, Macedonia, Poland, Romania, Slovakia, Slovenia, Serbia and Montenegro, Tunisia, Turkey and Switzerland. No visa is required of the residents from the United States, Israel, Japan, Cyprus, Hong Kong, Canada, Australia and New Zealand, too for duration of thirty days, but some border tax of about twenty dollars could be collected from such individuals on entering the country. You should necessarily keep in mind that if the planned visit is longer or if it is on a diplomatic or official passport, a visa will be required and you must obtained it in advance.American citizens with regular passports, tending to stay more than thirty days can get them free of charge under a specific reciprocal external agreement, but a twenty dollars processing fee probably will be collected per passport. On the other hand, travelers who have a one-year multiple entry visa for Bulgaria may stay up to ninety days altogether on every six months. Generally, passengers have the right to import under no custom duty or import fees the objects they will need for their stay in the country, which in their type and quantity correspond to both purpose and the duration of their stay, as well as different consumption objects - tobacco products for passengers over 16 years of age - cigarettes counting 200 items, or other tobacco products - 250 grams, alcoholic beverages again only for travelers over 16 years of age, as follows: wine two liters, and alcoholic liquors 1 liter, coffee 500 grams or coffee extract 200 grams, tea 100 grams or tea extract 40gr. Other permitted goods include perfumes 50 ml and toilet water 250 ml and etc.
Bulgarian Properties - Foreigners Legal AdviceRecently, Bulgaria has imposed some new restrictions on the members of each foreigners family who are not citizens of the European Union. These people should enter and leave the country with their passports and visa, if it is required. The Council of Ministers accepts the whole conditions and procedures for visa issuing. No taxes for this process are usually required, and no visa is needed if a particular citizen has a stay permit issued from any European Union member state. Such people can remain in Bulgaria with their passports up to three months. When some resident outside the EU wants to stay longer or permanently in this country, he will need a special stay permission. The allowing period generally would vary depending on if such people are accompanied in Bulgaria by their relative who is an European Union citizen.Short absence up to 6 months each year and longer absence as to serve military service or other leaving up to twelve consecutive months are also determined as stay in Bulgaria. Each foreign resident who is not EU citizen should apply for this stay permit in the Directorate "Migration" of Interior Ministry in the first three months after he arrives in Bulgaria. Then, the applicant will receive a temporary license. The necessary documents in this applying process are - a valid passport and copy of it, regular visa, if it is required for his entry, a bill for paid state tax and the stay permit of his relative from European Union, if the foreigner arrives in Bulgaria with him. Finally, long-term stay permit could be issued in a three-month period. If not all application documents are in order, this applicant will have fourteen days to present accurate documents. Family members of each worker or self-employed person who has permanent stay permit for living in Bulgaria, if they all stay more constantly in the country, also will have the right of permanent stay permit, no matter their citizenship. Foreigners who are not European Union citizens also receive this permission if they have lived in Bulgaria continuously for five years with their relative EU citizen.In the most cases permanent stay permit application has to be presented to Directorate "Migration"of Interior Ministry two months before the final expiry date of the previous long-term residential permission. Permanent stay permit should be re-issued in every ten years. Keep in mind that all European Union citizens and they families always have to carry their ID or passports and stay permit documents. When you originally arrive in Bulgaria, review some useful information about the customs regulations and items that need to be declared, available on the airports, sea ports and frontier points. Usually remember the different thresholds for declaring money, alcohol, cigarettes and other goods, determined by the Bulgarian laws. Nowadays, most foreigners are permitted to work in Bulgaria for less than three months without a special work permission but still must register with the Employment Agency before this. Different foreign residents who want to work in our country on a freelance basis will be charged around 1000 leva for the issuing of a new work permit or for extension of the current document. And additional 50 leva will cost the handling of an application for an original labour permission or 25 leva - the application for extension, and the issuing of a special replacement freelance work permit has price of 200 leva. All the document handling fees for an original freelance work permit should be paid through Bulgarian diplomatic missions or consular posts. The fees are counted in leva on the Bulgarian territory and in euro or in local currency abroad, the amount of each fee is converted from euro into the local currency at the official exchange rate. Some Important Laws Concerning Foreigners in Bulgaria4 most important Bulgarian foreigners rights laws - concise description:1. Law on cadastre and property register arranges for all cases of the organization, funding, creation, administration and use of the cadastre and the property register in Bulgaria. Generally said, the property register comprise of various immovable properties, and in it should be recorded all acts, such as recognizing or conveying right of ownership or establishing, conveying, modifying and terminating other real right over these properties, interdictions and mortgages over them, as well as other legal actions, circumstances and legal facts for which recordation is determined by law. The Minister of Justice has the duty to exercise the final management and control of all activities regarding the property register.2. Law for the foreigners in the Republic of Bulgaria determines the essential conditions which must be kept by everyone who tends to visit Bulgaria legally. Thus, every foreigner will be able to enter in the country if he has valid document for travel abroad or other substituting document such as visa for entering, permission for stay or transit passing through the country when they are required. Visas could not be required when between the Republic of Bulgaria and the other country there is concluded a special agreement or there is some explicit act of the Council of Ministers of Bulgaria for visa free regime. Also, no visas for a short-term stay or transit will be needed by foreigners, legally staying in an European country with whom Bulgaria has established a non-visa regime for traveling, if they are students on a school trip and are accompanied by their teacher who should have a full list of them, issued by the respective school. It should contain - personal data of each participant in the trip, purpose of the travel, a recent photo of each student who has no regular visa for traveling abroad or other substituting document according to the particular legislation of the country from which he comes. Visa will not be required from a foreign citizen who also has Bulgarian citizenship when he presents his foreign document for traveling and a personal card according to the law for the Bulgarian identification documents. The Ministry of Interior, together with the Ministry of Foreign Affairs and the Ministry of Transport and Communications must maintain and regularly update the list of documents for traveling abroad, issued by all countries and different international organizations.3. The constitution of Bulgaria determines all essential rights and duties which every Bulgarian or foreigner receives on the territory of the country. According to this document, all foreign persons and companies will be able to acquire some user rights, building rights, and other property rights if they answer the special conditions stipulated by the law. Thus, every foreign resident who has at least one Bulgarian parent was born on the territory of the country is also a Bulgarian citizen, except he has acquired other citizenship by birth. All foreigners who reside constantly in Bulgaria have all equal rights and obligations determined by this constitution, excepting only some particular rights and obligations for which the laws explicitly require Bulgarian citizenship. Thus, the residents from other countries who legally reside in Bulgaria cannot be expelled from here or extradited to other countries against their wills.4. Bulgarian Law on Foreign Investment generally govern the specific terms and procedures for making investments by different foreign persons in Bulgaria, the protection of those investments, as well as the conditions and procedures for the implementation of priority investment projects. Thus, each foreign resident has the opportunity to make investments in the country under the same terms set out for Bulgarian persons and will receive equal rights with them. When a specific international agreement, in which Bulgaria is a party, provides for more favourable terms for undertaking of economic activities by foreign persons, they should be immediately applied. On the other hand, all foreign persons, who have the right to carry on business activities under their national legislation, may open in the country trade representation offices, but they should be always registered at the Bulgarian Chamber of Commerce and Industry. Remember that the amount of foreign participation in newly-formed or existing companies typically will not be limited. Every foreign resident must hold a permit for permanent residence before he could carry on different economic activities such as. registration as a sole trader, participation in a co-operative, participation in a general partnership including as a partner with unlimited liability in a limited partnership or in a limited partnership with shares. This right to a permanent residence of each foreign person may be withdrawn by the Minister of Interior or by authorized by him officials only in the cases determined by law.
Bulgarian Properties Ownership Legal AdviceThe acquisition of real estate in Bulgaria is regulated mainly by the Constitution of the country, the specific Ownership Act, the Ownership and Use of Agricultural Land law and at some extent by the Civil Procedure Code, too. On the other hand, different taxes, charges and fees which should be paid upon each particular acquisition are determined in the Local Taxes and Charges Act, the Tariff for Notary Fees from the Notaries and Notary Activities Act and other tax legislation in the country. According to the Bulgarian constitution the right of ownership is guaranteed and protected by the national law and the private property as a whole is inviolable. Furthermore, compulsory alienation of the right of ownership for state or municipal needs is possible only under a specific Act, if these needs cannot be satisfied in another way and only after prior and equal in value compensation. Generally said, all foreign residents could acquire the right to use the land and to build on it, some more rigorous law restrictions will be applied to the land upon which they wish to build. Under Bulgarian law every person has the opportunity acquire a right of ownership over a building separately from the underlying land.Further, it is possible for each owner of a land to transfer the right to build upon particular land, and after the completion of the construction the holder of the right to build will become the owner of that building. The rights of ownership or using of different real estate is transferred in the form of a specific notary deed. This is a type of contract whose form and particular content are prescribed by law. It is created by a notary within whose region the real estate is located. Every notary is under the obligation to check the identity of the parties, their capacity, the authority of the representatives and so on, and that is why, the process of execution of the notary deed offers quite considerable security. After the deed is executed it should be registered by a specific registry judge upon request of the notary. A typical preliminary step before the execution of the notary deed is the conclusion of a preliminary agreement for the sale and purchase of this immovable property which imposes an obligation on the parties to respectively sell and buy the agreed real estate for the agreed price within an agreed period if certain conditions are met. This gives the purchaser time to check the title of the transferrer and for any encumbrances or certain difficulties such as real rights and mortgages registered on it.For instance, if a particular building is protected as a cultural monument there could be available some restrictions on changing its external outlook. Within the same period the seller receives the official valuation of the property for tax purposes and a certificate that he does not have tax liabilities against the state from the tax authorities, a certified sketch of the property from the local authority and he will sign a declaration that he does not have any other public obligations against the state and the municipality, without which the notary deed cannot be executed. After the checks are made and the documents obtained the parties and the notary will execute the actual deed. If a particular purchaser wishes to buy a building in the process of construction the right of ownership cannot be acquired and the notary deed could not be executed before the building is really completed and all necessary approvals by the relevant authorities required by law obtained. Furthermore, a detailed preliminary agreement should be prepared stating the exact requirements of the purchaser as to the construction of the building, installation of central heating, alarm system, the liability of the building company for each case of default and non-compliance with the numerous and strict construction laws and regulations, liquidated damages for non-performance of the obligations as to quality and time of each party etc. Upon execution of each notary deed have to be paid certain taxes, charges and fees. A two per cent local tax levied upon the price agreed between the parties, or the valuation of the property by the tax authorities, whichever is higher, is due. On the other hand, the particular notary fee depending on the price of the property or tax valuation, whichever is higher, also should be paid. On the third place, a small charge for the registration of the notary deed by the registry judge is due, counting to 0,1 per cent of the price. In the most cases, the owner of a real estate is obliged to pay an annual local real estate tax around 0,15 per cent of the valuation of the property as conducted by the tax authorities on an annual basis. In addition, some waste-collection charges determined by the municipality are due, too. You should also keep in mind that every income from rent of real estate owned by a foreign person who does not act through a permanent establishment will be subject to fifteen per cent withholding tax unless otherwise stipulated in a special tax treaty between Bulgaria and the country of the owner. On the other hand, the rental income of a company decreased by legally recognized expenses and depreciation will be subject to corporate tax.
Bulgarian Incorporate Companies Legal AdviceNowadays, all foreigners can buy buildings, the right to build and other related rights such as the right of use and passage but still cannot buy any land in Bulgaria. The process of acquiring property in this country, excepting land, becomes significantly easier by the new Foreign investment act since 1997 which canceled the requirement to seek prior approval of the Ministry of Finance before such purchases could be concluded. However, foreign judicial and physical persons already can acquire land if they have a Bulgarian registered company. Thus, in case you intend to buy land in the country, the purchase will be registered against your company and you are the sole owner of the shares, respectively of the land. That is why, the Limited liability company today is undoubtedly the most popular choice for buying land in Bulgaria. Each foreign or Bulgarian resident, no matter judicial or physical, can form a Limited liability company here. In this case he will be liable for the potential obligations of the company according to his share in the originally registered capital.All necessary documents for the company incorporation at the submission of regulations by the district court, where the future company will be placed, are - standard application to the registration court, protocol of the incorporation meeting, specific articles of incorporation of the company, memorandum for appointment of director or directors - presents declarations of the persons, who will manage and represent the company that they are not conducting on their own or on behalf of somebody else a commercial activity, they do not participate in partnerships or any other limited liability companies, they will not hold a seat in management bodies of another companies and they are not declared insolvent. The other legal requirements for successful registration are notary determined specimens and consent for all managers of the company, bank certificate that over seventy per cent of the initial capital is paid up, document that the proposed name of the company is unique and bills that all registration fees and charges for promulgation in the State Gazette are paid. After the application process finishes, the future shareholders conduct preliminary discussions on the commercial activities they tend to engage in. Based on their agreement, are prepared some specific articles of incorporation. They include the trade name, the address of management of the new company, the purposes and the time period for which it is will be active, the names or the trade names of the shareholders, the registered capital. It could be useful for you to keep in mind that the legal term of final installment of the whole capital cannot be longer than two years from the complete registration of the company, respectively from the later increase of the basic capital. In the specific articles of incorporation are also determined the number of shares taken by each shareholder, the management and manner of representation, the privileges of the shareholders, and their other rights and obligations. Then, a special dedicated bank account is opened to collect all share capital. The minimum capital for such company is 5 000 levs. Each shareholder at the time of the legal registration should have paid at least one-third of his shares.Then the new company is entered to the Commercial Register of the district court where it will be based. It will be worth to know that the publication of the company entry in the Commercial Register does not complete your actual company formation. It only announces to the general public the act of formation by publication of the register entry in the Bulgarian State Gazette. Administrative costs that you should pay to the state and registration court are around 250 levs. They often include the fees for the services of a lawyer for the incorporation, which may vary slightly. The Limited Liability Company usually may have one or more shareholders, who are liable to the extent of their contribution in its capital. Typically, there is no legal limitation concerning the number of shares, but each share cannot be less than ten leva and should be as well dividable to ten. All shares can vary in their size. Normally, the whole process of foundation and registration takes between twenty and thirty working days.The other popular legal form for making business in Bulgaria is a joint stock company or AD. It also must be registered with the district court, and this process usually takes from two to three weeks. The joint stock company also determines the liability of each particular shareholder to the amount of his share in the entire capital of the company. The incorporating process for every Joint stock company begins with a constituent assembly for the company. Then the future shareholders make a final decision for the establishment of the new joint-stock company. If you want to establish a single member joint-stock company, you could only adopt your articles of association. The next step is to elect your supervisory board of directors and to appoint your management. You should subscribe the capital stock of minimum 50 000 leva or approximately 25 000 Euro. Now the managers of the new company are under the obligation to open a special bank account for collecting the cash installments. Thus, they will get a bank certificate for the installments paid, counting at least twenty-five per cent of the nominal value of subscribed stocks.Next of your legal obligations is to prepare the documents for the court registration. After that, you will be able to get your entry in the commercial register. It will be worth for you to ensure yourself that the registration is performed in three months after the constituent assembly of the company. Thus, the initial company registration is complete, but there are still a few more steps to complete. You should wait for the final publication of the decision of the court in the State Gazette. When it is published, you must register at the National Statistical Institute and receive your BULSTAT number. You should subscribe your company also at the territorial division of the National Social Security Institute and at the territorial tax office in fourteen days after the entire registration of the company.
Bulgarian Taxes Legal AdviceHere we have listed a small description of the most important taxes concerning buying properties and business activities in Bulgaria. Generally said, it will be always better for you to seek professional advice on these taxation and legal issues. At the beginning you should remember that tax year in this country coincides the calendar year. Also, keep in mind that all non-Bulgarian residents are taxed on income and gains derived from Bulgarian sources only. Every time when you sell some property, you should pay a special capital gains tax. Additional municipality tax is around two per cent, due when the particular Notary Act is signed, based on the property value stated in this document. Except the corporate tax, no other direct taxes are posted on the transfer of each real property, but this transfer is also subject to notary and municipal fees. Different notary fees should be paid on the higher market price or the book value of the property at varying rates. The tax estimation price is especially for the purposes of the real estate taxation and could be much lower than the actual price which the buyers could pay, so because of this practice sometimes there might be a difference between the price you actually pay and this written in the title deed. All owners of real estate in Bulgaria are liable to pay an annual tax on the value of the real estate. This rate can vary slightly depending on whether the real estate is used for residential or commercial purposes. The due sum for different residential properties is fixed by the local authorities, while for commercial buildings, the rate is more often 0,15 per cent. This tax should be paid at the beginning of each year. The taxes for the same year are due from first January but you have the period until thirty-first March to pay the sum without a penalty. It is useful to remember that there will be a five per cent discount if the taxes are prepaid until the end of January. Also, this could significantly assist you in applications for visas in the future as a certain proof of paying taxes punctually. Value added tax is also available on the sale price of real estate in Bulgaria at a rate of twenty per cent. It could be worth for you to know that the different transactions with land and residential properties here are exception from the Value added tax. Various incomes from dividends, interest, royalties, rents, capital gains and others paid to foreign residents are as well subject to a fifteen per cent withholding tax. Additional flat twenty per cent deduction is usually available against all rental income received. When such rental income is obtained by a non-Bulgarian resident, fifteen per cent tax should be withheld from the source. All legal tax returns should be filed in question by fifteenth April following the tax year. They could be returned in thirty days of the application. There are no wealth taxes due in Bulgaria. The different employees in the country are liable to pay social security contributions at a rate of eight per cent and additional employment fund contributions at a rate of one per cent. They also due some health-care contributions at a rate of 1,5 per cent. Most of these contributions should be paid monthly and are calculated on employment income only up to a limit of around 850 levs per month. The corporate tax has been reduced to fifteen per cent since 2005.In December 2003, Parliament accepted the licensed special investment purpose companies to become exempt from this corporate tax. Companies, placing their offices in areas with high employment also do not pay such tax. This tax runs every year from first January to the end of December and its returns as a rule are made by the end of March. Then the whole taxes must be paid in fifteen days after submitting the declaration. On the other hand, monthly advance tax payments are obligatory and are typically calculated on the basis of the declared profit for the previous year. The amount paid in April represents the difference between the advance tax paid and the actual profit declared. All dividends also are taxed at fifteen per cent at the source - the paying company or partnership, which is the final tax on this kind of income, except the cases when they are distributed to local commercial companies.
Bulgarian Properties - Foreigners Legal AdviceRecently, Bulgaria has imposed some new restrictions on the members of each foreigners family who are not citizens of the European Union. These people should enter and leave the country with their passports and visa, if it is required. The Council of Ministers accepts the whole conditions and procedures for visa issuing. No taxes for this process are usually required, and no visa is needed if a particular citizen has a stay permit issued from any European Union member state. Such people can remain in Bulgaria with their passports up to three months. When some resident outside the EU wants to stay longer or permanently in this country, he will need a special stay permission. The allowing period generally would vary depending on if such people are accompanied in Bulgaria by their relative who is an European Union citizen.Short absence up to 6 months each year and longer absence as to serve military service or other leaving up to twelve consecutive months are also determined as stay in Bulgaria. Each foreign resident who is not EU citizen should apply for this stay permit in the Directorate "Migration" of Interior Ministry in the first three months after he arrives in Bulgaria. Then, the applicant will receive a temporary license. The necessary documents in this applying process are - a valid passport and copy of it, regular visa, if it is required for his entry, a bill for paid state tax and the stay permit of his relative from European Union, if the foreigner arrives in Bulgaria with him. Finally, long-term stay permit could be issued in a three-month period. If not all application documents are in order, this applicant will have fourteen days to present accurate documents. Family members of each worker or self-employed person who has permanent stay permit for living in Bulgaria, if they all stay more constantly in the country, also will have the right of permanent stay permit, no matter their citizenship. Foreigners who are not European Union citizens also receive this permission if they have lived in Bulgaria continuously for five years with their relative EU citizen.In the most cases permanent stay permit application has to be presented to Directorate "Migration"of Interior Ministry two months before the final expiry date of the previous long-term residential permission. Permanent stay permit should be re-issued in every ten years. Keep in mind that all European Union citizens and they families always have to carry their ID or passports and stay permit documents. When you originally arrive in Bulgaria, review some useful information about the customs regulations and items that need to be declared, available on the airports, sea ports and frontier points. Usually remember the different thresholds for declaring money, alcohol, cigarettes and other goods, determined by the Bulgarian laws. Nowadays, most foreigners are permitted to work in Bulgaria for less than three months without a special work permission but still must register with the Employment Agency before this. Different foreign residents who want to work in our country on a freelance basis will be charged around 1000 leva for the issuing of a new work permit or for extension of the current document. And additional 50 leva will cost the handling of an application for an original labour permission or 25 leva - the application for extension, and the issuing of a special replacement freelance work permit has price of 200 leva. All the document handling fees for an original freelance work permit should be paid through Bulgarian diplomatic missions or consular posts. The fees are counted in leva on the Bulgarian territory and in euro or in local currency abroad, the amount of each fee is converted from euro into the local currency at the official exchange rate. Some Important Laws Concerning Foreigners in Bulgaria4 most important Bulgarian foreigners rights laws - concise description:1. Law on cadastre and property register arranges for all cases of the organization, funding, creation, administration and use of the cadastre and the property register in Bulgaria. Generally said, the property register comprise of various immovable properties, and in it should be recorded all acts, such as recognizing or conveying right of ownership or establishing, conveying, modifying and terminating other real right over these properties, interdictions and mortgages over them, as well as other legal actions, circumstances and legal facts for which recordation is determined by law. The Minister of Justice has the duty to exercise the final management and control of all activities regarding the property register.2. Law for the foreigners in the Republic of Bulgaria determines the essential conditions which must be kept by everyone who tends to visit Bulgaria legally. Thus, every foreigner will be able to enter in the country if he has valid document for travel abroad or other substituting document such as visa for entering, permission for stay or transit passing through the country when they are required. Visas could not be required when between the Republic of Bulgaria and the other country there is concluded a special agreement or there is some explicit act of the Council of Ministers of Bulgaria for visa free regime. Also, no visas for a short-term stay or transit will be needed by foreigners, legally staying in an European country with whom Bulgaria has established a non-visa regime for traveling, if they are students on a school trip and are accompanied by their teacher who should have a full list of them, issued by the respective school. It should contain - personal data of each participant in the trip, purpose of the travel, a recent photo of each student who has no regular visa for traveling abroad or other substituting document according to the particular legislation of the country from which he comes. Visa will not be required from a foreign citizen who also has Bulgarian citizenship when he presents his foreign document for traveling and a personal card according to the law for the Bulgarian identification documents. The Ministry of Interior, together with the Ministry of Foreign Affairs and the Ministry of Transport and Communications must maintain and regularly update the list of documents for traveling abroad, issued by all countries and different international organizations.3. The constitution of Bulgaria determines all essential rights and duties which every Bulgarian or foreigner receives on the territory of the country. According to this document, all foreign persons and companies will be able to acquire some user rights, building rights, and other property rights if they answer the special conditions stipulated by the law. Thus, every foreign resident who has at least one Bulgarian parent was born on the territory of the country is also a Bulgarian citizen, except he has acquired other citizenship by birth. All foreigners who reside constantly in Bulgaria have all equal rights and obligations determined by this constitution, excepting only some particular rights and obligations for which the laws explicitly require Bulgarian citizenship. Thus, the residents from other countries who legally reside in Bulgaria cannot be expelled from here or extradited to other countries against their wills.4. Bulgarian Law on Foreign Investment generally govern the specific terms and procedures for making investments by different foreign persons in Bulgaria, the protection of those investments, as well as the conditions and procedures for the implementation of priority investment projects. Thus, each foreign resident has the opportunity to make investments in the country under the same terms set out for Bulgarian persons and will receive equal rights with them. When a specific international agreement, in which Bulgaria is a party, provides for more favourable terms for undertaking of economic activities by foreign persons, they should be immediately applied. On the other hand, all foreign persons, who have the right to carry on business activities under their national legislation, may open in the country trade representation offices, but they should be always registered at the Bulgarian Chamber of Commerce and Industry. Remember that the amount of foreign participation in newly-formed or existing companies typically will not be limited. Every foreign resident must hold a permit for permanent residence before he could carry on different economic activities such as. registration as a sole trader, participation in a co-operative, participation in a general partnership including as a partner with unlimited liability in a limited partnership or in a limited partnership with shares. This right to a permanent residence of each foreign person may be withdrawn by the Minister of Interior or by authorized by him officials only in the cases determined by law.
Bulgarian Properties Ownership Legal AdviceThe acquisition of real estate in Bulgaria is regulated mainly by the Constitution of the country, the specific Ownership Act, the Ownership and Use of Agricultural Land law and at some extent by the Civil Procedure Code, too. On the other hand, different taxes, charges and fees which should be paid upon each particular acquisition are determined in the Local Taxes and Charges Act, the Tariff for Notary Fees from the Notaries and Notary Activities Act and other tax legislation in the country. According to the Bulgarian constitution the right of ownership is guaranteed and protected by the national law and the private property as a whole is inviolable. Furthermore, compulsory alienation of the right of ownership for state or municipal needs is possible only under a specific Act, if these needs cannot be satisfied in another way and only after prior and equal in value compensation. Generally said, all foreign residents could acquire the right to use the land and to build on it, some more rigorous law restrictions will be applied to the land upon which they wish to build. Under Bulgarian law every person has the opportunity acquire a right of ownership over a building separately from the underlying land.Further, it is possible for each owner of a land to transfer the right to build upon particular land, and after the completion of the construction the holder of the right to build will become the owner of that building. The rights of ownership or using of different real estate is transferred in the form of a specific notary deed. This is a type of contract whose form and particular content are prescribed by law. It is created by a notary within whose region the real estate is located. Every notary is under the obligation to check the identity of the parties, their capacity, the authority of the representatives and so on, and that is why, the process of execution of the notary deed offers quite considerable security. After the deed is executed it should be registered by a specific registry judge upon request of the notary. A typical preliminary step before the execution of the notary deed is the conclusion of a preliminary agreement for the sale and purchase of this immovable property which imposes an obligation on the parties to respectively sell and buy the agreed real estate for the agreed price within an agreed period if certain conditions are met. This gives the purchaser time to check the title of the transferrer and for any encumbrances or certain difficulties such as real rights and mortgages registered on it.For instance, if a particular building is protected as a cultural monument there could be available some restrictions on changing its external outlook. Within the same period the seller receives the official valuation of the property for tax purposes and a certificate that he does not have tax liabilities against the state from the tax authorities, a certified sketch of the property from the local authority and he will sign a declaration that he does not have any other public obligations against the state and the municipality, without which the notary deed cannot be executed. After the checks are made and the documents obtained the parties and the notary will execute the actual deed. If a particular purchaser wishes to buy a building in the process of construction the right of ownership cannot be acquired and the notary deed could not be executed before the building is really completed and all necessary approvals by the relevant authorities required by law obtained. Furthermore, a detailed preliminary agreement should be prepared stating the exact requirements of the purchaser as to the construction of the building, installation of central heating, alarm system, the liability of the building company for each case of default and non-compliance with the numerous and strict construction laws and regulations, liquidated damages for non-performance of the obligations as to quality and time of each party etc. Upon execution of each notary deed have to be paid certain taxes, charges and fees. A two per cent local tax levied upon the price agreed between the parties, or the valuation of the property by the tax authorities, whichever is higher, is due. On the other hand, the particular notary fee depending on the price of the property or tax valuation, whichever is higher, also should be paid. On the third place, a small charge for the registration of the notary deed by the registry judge is due, counting to 0,1 per cent of the price. In the most cases, the owner of a real estate is obliged to pay an annual local real estate tax around 0,15 per cent of the valuation of the property as conducted by the tax authorities on an annual basis. In addition, some waste-collection charges determined by the municipality are due, too. You should also keep in mind that every income from rent of real estate owned by a foreign person who does not act through a permanent establishment will be subject to fifteen per cent withholding tax unless otherwise stipulated in a special tax treaty between Bulgaria and the country of the owner. On the other hand, the rental income of a company decreased by legally recognized expenses and depreciation will be subject to corporate tax.
Bulgarian Incorporate Companies Legal AdviceNowadays, all foreigners can buy buildings, the right to build and other related rights such as the right of use and passage but still cannot buy any land in Bulgaria. The process of acquiring property in this country, excepting land, becomes significantly easier by the new Foreign investment act since 1997 which canceled the requirement to seek prior approval of the Ministry of Finance before such purchases could be concluded. However, foreign judicial and physical persons already can acquire land if they have a Bulgarian registered company. Thus, in case you intend to buy land in the country, the purchase will be registered against your company and you are the sole owner of the shares, respectively of the land. That is why, the Limited liability company today is undoubtedly the most popular choice for buying land in Bulgaria. Each foreign or Bulgarian resident, no matter judicial or physical, can form a Limited liability company here. In this case he will be liable for the potential obligations of the company according to his share in the originally registered capital.All necessary documents for the company incorporation at the submission of regulations by the district court, where the future company will be placed, are - standard application to the registration court, protocol of the incorporation meeting, specific articles of incorporation of the company, memorandum for appointment of director or directors - presents declarations of the persons, who will manage and represent the company that they are not conducting on their own or on behalf of somebody else a commercial activity, they do not participate in partnerships or any other limited liability companies, they will not hold a seat in management bodies of another companies and they are not declared insolvent. The other legal requirements for successful registration are notary determined specimens and consent for all managers of the company, bank certificate that over seventy per cent of the initial capital is paid up, document that the proposed name of the company is unique and bills that all registration fees and charges for promulgation in the State Gazette are paid. After the application process finishes, the future shareholders conduct preliminary discussions on the commercial activities they tend to engage in. Based on their agreement, are prepared some specific articles of incorporation. They include the trade name, the address of management of the new company, the purposes and the time period for which it is will be active, the names or the trade names of the shareholders, the registered capital. It could be useful for you to keep in mind that the legal term of final installment of the whole capital cannot be longer than two years from the complete registration of the company, respectively from the later increase of the basic capital. In the specific articles of incorporation are also determined the number of shares taken by each shareholder, the management and manner of representation, the privileges of the shareholders, and their other rights and obligations. Then, a special dedicated bank account is opened to collect all share capital. The minimum capital for such company is 5 000 levs. Each shareholder at the time of the legal registration should have paid at least one-third of his shares.Then the new company is entered to the Commercial Register of the district court where it will be based. It will be worth to know that the publication of the company entry in the Commercial Register does not complete your actual company formation. It only announces to the general public the act of formation by publication of the register entry in the Bulgarian State Gazette. Administrative costs that you should pay to the state and registration court are around 250 levs. They often include the fees for the services of a lawyer for the incorporation, which may vary slightly. The Limited Liability Company usually may have one or more shareholders, who are liable to the extent of their contribution in its capital. Typically, there is no legal limitation concerning the number of shares, but each share cannot be less than ten leva and should be as well dividable to ten. All shares can vary in their size. Normally, the whole process of foundation and registration takes between twenty and thirty working days.The other popular legal form for making business in Bulgaria is a joint stock company or AD. It also must be registered with the district court, and this process usually takes from two to three weeks. The joint stock company also determines the liability of each particular shareholder to the amount of his share in the entire capital of the company. The incorporating process for every Joint stock company begins with a constituent assembly for the company. Then the future shareholders make a final decision for the establishment of the new joint-stock company. If you want to establish a single member joint-stock company, you could only adopt your articles of association. The next step is to elect your supervisory board of directors and to appoint your management. You should subscribe the capital stock of minimum 50 000 leva or approximately 25 000 Euro. Now the managers of the new company are under the obligation to open a special bank account for collecting the cash installments. Thus, they will get a bank certificate for the installments paid, counting at least twenty-five per cent of the nominal value of subscribed stocks.Next of your legal obligations is to prepare the documents for the court registration. After that, you will be able to get your entry in the commercial register. It will be worth for you to ensure yourself that the registration is performed in three months after the constituent assembly of the company. Thus, the initial company registration is complete, but there are still a few more steps to complete. You should wait for the final publication of the decision of the court in the State Gazette. When it is published, you must register at the National Statistical Institute and receive your BULSTAT number. You should subscribe your company also at the territorial division of the National Social Security Institute and at the territorial tax office in fourteen days after the entire registration of the company.
Bulgarian Taxes Legal AdviceHere we have listed a small description of the most important taxes concerning buying properties and business activities in Bulgaria. Generally said, it will be always better for you to seek professional advice on these taxation and legal issues. At the beginning you should remember that tax year in this country coincides the calendar year. Also, keep in mind that all non-Bulgarian residents are taxed on income and gains derived from Bulgarian sources only. Every time when you sell some property, you should pay a special capital gains tax. Additional municipality tax is around two per cent, due when the particular Notary Act is signed, based on the property value stated in this document. Except the corporate tax, no other direct taxes are posted on the transfer of each real property, but this transfer is also subject to notary and municipal fees. Different notary fees should be paid on the higher market price or the book value of the property at varying rates. The tax estimation price is especially for the purposes of the real estate taxation and could be much lower than the actual price which the buyers could pay, so because of this practice sometimes there might be a difference between the price you actually pay and this written in the title deed. All owners of real estate in Bulgaria are liable to pay an annual tax on the value of the real estate. This rate can vary slightly depending on whether the real estate is used for residential or commercial purposes. The due sum for different residential properties is fixed by the local authorities, while for commercial buildings, the rate is more often 0,15 per cent. This tax should be paid at the beginning of each year. The taxes for the same year are due from first January but you have the period until thirty-first March to pay the sum without a penalty. It is useful to remember that there will be a five per cent discount if the taxes are prepaid until the end of January. Also, this could significantly assist you in applications for visas in the future as a certain proof of paying taxes punctually. Value added tax is also available on the sale price of real estate in Bulgaria at a rate of twenty per cent. It could be worth for you to know that the different transactions with land and residential properties here are exception from the Value added tax. Various incomes from dividends, interest, royalties, rents, capital gains and others paid to foreign residents are as well subject to a fifteen per cent withholding tax. Additional flat twenty per cent deduction is usually available against all rental income received. When such rental income is obtained by a non-Bulgarian resident, fifteen per cent tax should be withheld from the source. All legal tax returns should be filed in question by fifteenth April following the tax year. They could be returned in thirty days of the application. There are no wealth taxes due in Bulgaria. The different employees in the country are liable to pay social security contributions at a rate of eight per cent and additional employment fund contributions at a rate of one per cent. They also due some health-care contributions at a rate of 1,5 per cent. Most of these contributions should be paid monthly and are calculated on employment income only up to a limit of around 850 levs per month. The corporate tax has been reduced to fifteen per cent since 2005.In December 2003, Parliament accepted the licensed special investment purpose companies to become exempt from this corporate tax. Companies, placing their offices in areas with high employment also do not pay such tax. This tax runs every year from first January to the end of December and its returns as a rule are made by the end of March. Then the whole taxes must be paid in fifteen days after submitting the declaration. On the other hand, monthly advance tax payments are obligatory and are typically calculated on the basis of the declared profit for the previous year. The amount paid in April represents the difference between the advance tax paid and the actual profit declared. All dividends also are taxed at fifteen per cent at the source - the paying company or partnership, which is the final tax on this kind of income, except the cases when they are distributed to local commercial companies.
