FAQ

What are the legal rights for foreign investors in Bulgaria?

• Equal rights and position of the Bulgarian and foreign investors • Priority of those international agreements that guarantee more favorable conditions for carrying out business activities by foreign persons • Unlimited foreign participation in all forms of business activity registered in Bulgaria

How can an enterprise be established with foreign investment in Bulgaria?

• Foreign investment typically assumes one of the following forms: establishing a joint venture with existing companies; acquiring a company through privatization; setting up a new (green field) venture or making a portfolio investment.

Which are the preferred types of business organisations with foreign investment?

• The most common form of organisation 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.

Is the extent or amount of foreign participation in companies limited?

• No

What are the guarantees for foreign investment in Bulgaria?

• National Treatment • Most Favored Nation Status • Priority of International Treaties • Legal Guarantees against Adverse Changes in the Law - the provisions of the Law that have been effective at the moment of making the investment, should be applied for any foreign investment executed before the changes of the legislation setting up legal normative restrictions for the foreign investment. • Protection Against Expropriation - real estate property owned by a foreign person can be expropriated only on lawful grounds, for especially important purposes of the State that can not be satisfied otherwise.

Who and how may  investors obtain property rights over real estate in Bulgaria?

• Foreign nationals and foreign legal entities may acquire ownership title over buildings and limited ownership rights over property in the Republic of Bulgaria.

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.

What are the regulations for the import and export of currency by foreigners ?

• In general case, resident and nonresident physical persons shall fill in and file with the customs authorities a foreign exchange customs declaration in accordance with the sample form approved by the Minister of Finance, when the sum of exported or imported by them Leva (BGN) and foreign exchange cash, including traveler's checks, exceed BGN 5,000 in total. Non-resident physical persons may import unlimited amount of Leva (BGL) and foreign exchange cash declaring the sum of the imported money and the type of currency before the customs authorities, provided that the total amount exceeds 5 000 BGL. Non-resident physical persons may export BGL and foreign exchange, as follows: Up to 5 000 BGL or their foreign exchange equivalent - without declaring them, and from 5 001 to 20 000 BGL, including traveler's checks, - after declaring their total amount and the grounds of their acquisition with the customs authorities; Over 20 000 BGL or the equivalent in foreign exchange - free export after declaration before the customs authorities, in case the amount of the exported BGL or foreign exchange does not exceed the amount of the imported and declared funds; Beyond the cases under items 1 and 2 - after obtaining a permit by the Bulgarian National Bank (BNB). For more information, we recommend you to visit the Web site of the Bulgarian National Bank [www.bnb.bg], where you can find a full text of the Foreign Exchange Law and of the Regulation No. 30 of 9 December 1999 on the Export and Import of Leva and Foreign Exchange Cash, Precious Metals and Precious Stones.

What are the living costs in Bulgaria? How much one pays for house insurance, gas, electricity, local and national taxes, to hire a gardener or a builder, 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 like Allianz. 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 monthly. 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.
  To employ a gardener or maintenance man or builder you will not pay much. The average salary in Bulgaria is 200 EURO per month.
  Driving a car in Bulgaria: There are few annual fees that must be paid every year to drive a car in our country:
  1. Driver responsibility insurance: 80 EURO per year
  2. Road tax (depending on the engine power): around 50 EURO per year for a car of 2000 ccm. engine.
  3. MOT: 12 EURO per year
  Fuel prices: petrol: 0.80 EURO/L, diesel: EURO/L, LPG: only 0.40 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), many good companies (eg. Allianz). Annual theft and accident insurance for a brand new car is around 800-1000 EURO.
  Bulgaria has the cheapest brand new cars in Europe. For example the new Renault Clio costs only 6,500 EURO. Second hand vehicles of any type and brand are available too.

If our property is only going to be occupied for about two months of the year, do we really need to get good security for the rest of the time?

• Yes, we recommend you have special alarm system and private property protection which costs 13-25 EURO per month. There are few very professional companies in Bulgaria providing such service.