There are no specific limitations as regards ownership of property. Any legal person, individual, the Bulgarian State and the municipalities may own real estate.
Foreign nationals and companies can own buildings, but under the current law there are some limitations for owning land.
Foreign natural and legal persons may acquire the title to land under the terms of an international agreement which has been ratified, published and has come into force. Foreign individuals may also inherit titles to land.
After 1 January 2014, in compliance with the Treaty concerning the Accession of the Republic of Bulgaria to the European Union, there are no more restrictions in Bulgaria for the acquisition of title to land (including agricultural and forest land) with respect to citizens and legal entities from EU Member States or from Member States under the Agreement on the European Economic Area (“EEA”).
A foreign country or an inter-governmental organization may acquire title to land, buildings and limited real rights in Bulgaria pursuant to an international agreement, law or act of the Council of Ministers. A foreign country cannot acquire the right of ownership to real estate in Bulgaria by inheritance.
In order to avoid restrictions on direct ownership of real estate, it was common practice for foreign nationals and entities that are not from EU Member States or from Member States under the Agreement on the EEA, to acquire property through a Bulgarian company (normally limited liability companies or joint stock companies).
There are some additional restrictions with respect to ownership rights over agricultural land, as it is subject to special legislative protection. Foreign nationals who acquire rights of ownership over agricultural land by means of inheritance by law, but are not from EU Member States or from Member States under the Agreement on the EEA or the contrary is not explicitly provided for in a ratified, published and international agreement in force, are obliged, within a three year period to transfer the ownership to persons who have a right to acquire such estates. If the three year period is not complied with, the Bulgarian state has the right to buy-out the respective agricultural lands at prices determined by an Ordinance of the Council of Ministers. Further, foreign states do not have rights to acquire ownership of agricultural land in Bulgaria.
Under the Agricultural Land Ownership and Use Act three groups of legal entities are denied the right to acquire ownership of agricultural land.
Commercial companies, in which partners and shareholders (directly or indirectly) are companies registered in jurisdictions with preferential tax regimes (offshore zones). Any State or territory with whom the Republic of Bulgaria does not have an effective convention for the avoidance of double taxation and where income tax or corporate tax due is more than 60 per cent lower than the income tax or corporate tax on the income in the Republic of Bulgaria, is deemed to be a jurisdiction with a preferential tax regime.
Commercial companies, where partners and shareholders are foreign nationals who are not form EU Member States or from Member States under the Agreement on the EEA or from a country which is not a party to a ratified, published and international agreement in force permitting the acquisition of agricultural land in Bulgaria, as well as sole proprietor commercial companies, established by such foreign nationals.
Joint-stock companies that have emitted bearer shares.
All legal entities falling under the above three groups were obliged to transfer all agricultural land owned by them by 1 May 2015. If they do not comply with this provision, they will be subject to a monetary sanction in the amount of BGN 100 for each decare (1,000 sq. m.) of land owned in violation of the law. If the transgressor does not transfer the ownership over the agricultural lands within three months after the date of the first sanction, it will be subject to a fine amounting to three times the initial sanction. If the transgressor continues to hold the land in contravention of the provisions of the law, it is subject to a sanction in the amount of BGN 300 for each decare of land after each subsequent period of three months.
Amendments to the Agricultural Land Ownership and Use Act envisage that only natural persons and legal entities which have been resident or established in the Republic of Bulgaria for more than five years are eligible to acquire rights of ownership over agricultural land in Bulgaria, whereas companies registered under Bulgarian law for less than five years may acquire right of ownership over agricultural land, if the partners in the company, respectively the members of the association or the founders of the joint-stock company, would meet the requirements of more than five years of residency or establishment.
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