Many foreigners have been setting up limited companies in order to own land in Bulgaria. Now as the year 2012 is approaching, the restriction will be removed and there will be no need of the limited company for this purpose. Many people will prefer to have the property on their own name. So how you can do that? The legal way is to wind up your company and transfer the property on your name.
The liquidation process
If the limited company has been set up only for the purpose of owing a land we assume that the company is a dormant one. The easiest way to find that is to ask your accountant if they have filed nil annual accounts. So, if the company is dormant the liquidation should be a straightforward process. The biggest disadvantage of the liquidation is the time frame. The minimum legal term is 6 months. Basically the liquidation process can be divided in the following milestones:
- appointing a liquidator and sorting all outstanding taxes (both state and municipal ones)
- drafting the initial accounting balance report
- announcing the liquidation in the online Commercial register and submitting an invitation to all potential creditors of the company to present their claims
- transferring the property to the capital owners (company owners)
- drafting the final accounting balance report
- de-registering the company from the Commercial register
The longest stage is the waiting period after announcing the invitation to the creditors. The minimum legal waiting period is 6 months. This is why the liquidation lasts that long.
Liquidation costs
The liquidation process will involve accounting and liquidator costs, state fees and fees for transferring the property to the company owner(s). The final costs depend on the status of the company- are there any problems with it or its assets, how well the company papers were done during the years etc. A quote for liquidation costs (without property transfer fees) for well maintained dormant company would be about €400.
Transferring the property on company owners’ name
This could be done in several ways, but the most common are either by simulating a sale (company sells to the company owner) or by transfer as a liquidation share from the company to the company owner. In both cases the property transfer needs to be recorded in the Land Registry.
MH Legal law office provides professional company winding up (liquidation) services. Mr. Milen Hristov, besides being a solicitor, is also a state certified liquidator with the Bulgarian Registry Agency. We provide company liquidation services in Varna region, but also all over Bulgaria.
4 March 2011 2:14 pm
The company i have is a limited one and has two properties, one belonging to myself and another belonging to a freind, the company is in my name. the company is dormant and it was re-registered 2 years ago.
The yearly costs ; i have to pay a maintanence fee annually, accountancy fees and quartarly Trade register fees. do i need to be paying for all of this?
Regarding your information on ” winding up( Liquadating) a Bulgarian company, Would you be able to give me a cost to look after the company until the company until the new law has came out and then to liquadate it, one of the properties to myself and the other to my freind. I have now just payed the accountancy fees and Trade register for this year.
look forward to your reply and any information or help you can give with my queries, thank you.
14 March 2011 4:28 pm
Hi we have an innactive company formed for the sole reason of owning a small (empty) house near Varna as was the requirements when we bought in 2004.
Our company was re-registered in 2009. Could you give me some idea of costs for:
1. doing annual returns including accountancy fees and any other costs the company should expect between now and 2012
2. the cost of winding up the company in 2012.
Please bear in mind that this is a non-profit company. We bought the house on the understanding that annual fees would be minimal but the Bulgarian government moved the ‘goal posts’
thanks in anticipation ..jon
22 December 2011 10:40 am
what date in 2012 does the new legislation come into effect. When can we buy our property in our own names and not through a company
22 December 2011 3:32 pm
As of January 2012 this should be possible, since the 5 years term moratorium expires. This is valid except for agricultural land and forests where the moratorium applies for 2 more years.
30 December 2011 12:13 pm
Are we to assume and assuming something I know can be a problem, that foreigners can buy land in BG from the 1st January without having to do it through a company. Can we as Brits finally buy a property and land in our own name??
3 January 2012 5:18 pm
I take it no one knows the answer?
6 January 2012 3:12 pm
@Mathew: As from 01.01.2012 citizens of EU member states CAN buy land (except land with status of a forest) in person.
9 January 2012 11:11 am
Thank you and happy new year
9 January 2012 4:15 pm
I don’t know where to ask this on your site?
I am starting a new job in March and my new employer have asked me for a E-104 form. Now, after doing some research and speaking with th HM Revenue and Customs have informed me that this form no longer exists. According to HMRC, this has been replaced by the SEPS041 form. However, I can only get hold of this form if I apply to the foreign authority in Bulgaria and then they will apply to the HMRC.
I’ve done a Google search for this form, but can’t find any information about it.
10 January 2012 2:22 pm
I take it you would have to repay VAT claimed?
16 January 2012 8:30 pm
Billy, if your company is VAT registered, it will take longer to liquidate, since on closing a VAT registered company, the National Revenue Agency are performing a mandatory thorough accounts check.
12 January 2012 11:37 am
Very strange on this site sometimes you get an answer very quickly and other times you have to wait ages? I am thinking of using this company for legal matters soon and I hope they work a bit quicker than they do here???
16 January 2012 8:29 pm
Mathew, because this a legal blog, we don’t check it on daily basis for new comments. If you email us directly, you will receive a quicker reply.
16 January 2012 6:50 pm
Is it now definitely the case that non-Bulgarians do not need a company to buy a house with land!
17 January 2012 1:48 pm
Thanks. You do have to repay the VAT though?
17 January 2012 2:39 pm
Billy, do you mean claim VAT from the state?
17 January 2012 2:58 pm
No. When I bought my property I reclaimed the VAT which amounted to a few thousand Euros. If I sold the place, would I need to pay back the VAT claimed? Or could I sell it, keep my company running, meaning that I would only have the accounting costs each year?
Thanks
5 February 2012 12:25 am
You’ll need to repay the VAT on the price of which you will sell the property. You can keep the company then. The automatic VAT de-registration is done when your turnover falls under 25,000 euros per year. Then you’ll only need to prepare annual accounts and not submit nil VAT declarations monthly.
26 January 2012 5:08 pm
could you tell me what the actual procedure is for foreigners buying land after Jan 2012 please? I spoke to 2 Notaries in one town and they had no idea!
26 January 2012 5:42 pm
Kathy, the procedure is the same as if any Bulgarian would buy land. The tricky part is in the description of the personal data in the title deed.
9 February 2012 8:07 pm
Can you advise how we get rid of a Bulgarian company? We sold the house over a year ago – the company was re-registered and now we are being asked for fees for accounts. We do not want this company. Can we liquidate?
2 March 2012 10:35 am
Thank you for all the useful information!
I have one more question. If the property is transferred from the company to the individual, is there another fee imposed (the notary fee, when a property is sold) which is like a percentage of the value of the property?
4 March 2012 10:14 pm
No, the property is transfered with the assigning protocol, signed by the liquidator at the end of the liquidation. This document will be used in any further ownership transactions. I have emailed you more details.
9 March 2012 7:49 pm
Hello Milen
Can you tell me if you have actually represented a client and carried out the property transfer procedure regarding foreigners and thier companies.?
Also, can the information (you have detailed regarding property transfer for foreigners on your website) be found anywhere from an official source,
perhaps at government/EU level.?
Regards and Thanks
Simon
9 March 2012 9:34 pm
Dear Simon, I have completed liquidation procedures for many clients. The information I provide is a summary of the regulations. You can find all the relevant regulation can be found in the Trade Act and in the Commercial Register Act as well as in the secondary legislation and in the jurisprudence.
13 March 2012 9:04 pm
Hello again Milen
Can you give me some idea of the cost (without issue) of transfering a property from the company to the individual. I do
not indend dissolving the company yet.
Am I able to transfer two properties from the company to the individual and to assume this would be double the cost?
Finally some have been told that property transfers can only proceed for foriegners if they have a primary property in thier native country,
could be wrong but could you clarify.
Regards
Simon
20 May 2012 11:43 am
hi i’ve recently purchased and paid for a property in a village outside chirpan. the owners have enquired as to the transfer and are telling me that i will still need to set up a bulgarian company… what is the exact critera ? do i need to be a permanent resident in order to transfer the ownership personally ?
p.s. this property needs quite a bit of work so would be impossible to live in presently. thx
20 May 2012 11:50 am
Hi Tim. The criteria to own property without the need to register a company is:
1. Be a citizen of an EU member state
2. The property is not agricultural land or forest.
For any other type of property you are entitled to buy without registration of a limited company.