Winding up Bulgarian company

[updated 06.07.2014]

Many liquidation have started and some of them even finished, but you need to check what we at MH Legal recommend to look when you have your company dissolved.

[updated 24.06.2013]

A recent changes to the NRA and NSSI internal ordinances, have affected the liquidation terms. The applications and the respective documents, needed for the liquidation and issued by those two government authorities practically increase the company liquidation with about two months! This is not in help to the solicitors and liquidators who have to explain the delays to the company owners.

The liquidation process

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.

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. If you have a property to be transferred on personal shareholder’s name, a further quote will be provided when we review the property documentation and status.

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.

Read more solicitor advice here:


44 comments

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  • Ivan Holgate 4 March 2011 Reply

    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.

  • jon 14 March 2011 Reply

    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

  • Mathew Thomas 22 December 2011 Reply

    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

    • Milen Hristov 22 December 2011 Reply

      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.

  • Mathew Thomas 30 December 2011 Reply

    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??

  • Mathew Thomas 3 January 2012 Reply

    I take it no one knows the answer?

    • Milen Hristov 6 January 2012 Reply

      @Mathew: As from 01.01.2012 citizens of EU member states CAN buy land (except land with status of a forest) in person.

  • Mathew Thomas 9 January 2012 Reply

    Thank you and happy new year

  • Mathew Thomas 9 January 2012 Reply

    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.

  • Billy Warden 10 January 2012 Reply

    I take it you would have to repay VAT claimed?

    • Milen Hristov 16 January 2012 Reply

      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.

  • Mathew Thomas 12 January 2012 Reply

    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???

    • Milen Hristov 16 January 2012 Reply

      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.

  • TheTravelBug 16 January 2012 Reply

    Is it now definitely the case that non-Bulgarians do not need a company to buy a house with land!

  • Billy Warden 17 January 2012 Reply

    Thanks. You do have to repay the VAT though?

  • Milen Hristov 17 January 2012 Reply

    Billy, do you mean claim VAT from the state?

  • Billy Warden 17 January 2012 Reply

    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

    • Milen Hristov 5 February 2012 Reply

      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.

  • Kathy 26 January 2012 Reply

    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!

    • Milen Hristov 26 January 2012 Reply

      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.

  • Donna 9 February 2012 Reply

    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?

  • Margie 2 March 2012 Reply

    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?

    • Milen Hristov 4 March 2012 Reply

      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.

  • Simon 9 March 2012 Reply

    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

    • Milen Hristov 9 March 2012 Reply

      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.

  • Simon 13 March 2012 Reply

    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

  • tim newcombe 20 May 2012 Reply

    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

    • Milen Hristov 20 May 2012 Reply

      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.

  • David Foster 22 May 2012 Reply

    Hello Milen

    I understand in the UK, that if a company does not file accounts, then the Registrar can strike that company off the list if he considers that it is no longer trading. This is a nil cost way of liquidating a company, assuming it has no assets.

    Is it possible then in BG, to transfer the property from the company to the shareholders and then not file any further accounts on the assumption that the company will automatically be struck off at a future date?

    Regards

    David

    • Milen Hristov 25 May 2012 Reply

      Hello David, indeed if you “take out” the property and leave the company like this, the government will strike it off (compulsory liquidation). However, all expenses for the compulsory liquidation proceedings will be accounted on the name of the company owners. It is unclear as to how the government will recover those costs, because for example if company owner is not residing in Bulgaria it will cost probably much more to find the owner rather than just to remit it.

  • Mark 5 November 2012 Reply

    Hi Milen
    I bought a house with land via a company called Easybg in Sofia about 9 years ago. Because I was only visiting my house near Elena 2 or 3 times a year, I was concerned that the “Gypsy’s” would break in and steal my furniture; so speaking to a lady who worked for the forestry commission and spoke English and had just had her first baby I asked if she would like to reside in the house with her partner and baby. They were very keen and said yes.
    I now think I could have a problem, I am told that I should have had a contract with them and now that 5 years has passed I may not be able to ask them to leave. Do you know if this is correct? He does the odd maintenance job when available, otherwise he has about 20 hives on my land and another English family’s land in the next village, making some honey to sell, she still works for the forestry.

    I am concerned that if I want to sell my property they could be difficult. Because of them would it be better to sell my property as a limited company or should I transfer it into my own name and then sell it?

    Also I am told that I should have registered my house and land as “regulated”; it is an old farm house with about 1/2 hectare of land, I do not know if this advice is true, certainly Easybg gave me no advice on this matter when I purchased it. Easybg acted as my agent, the sellers agent and the senior partner acted as my legal representative. I guess I am only being charged about 6 leva a year because the property is unregulated?

    I look forward to hearing your advice on these matters.

    Kind regards
    Mark

    • Milen Hristov 15 November 2012 Reply

      Hi Mark, I’ve sent you an email re your case.

  • Eddie 20 February 2013 Reply

    Hi,

    can you tell me the date that I will be able to buy land using my UK passport and not having to open a Bulgarian Ltd company, I was told Jan 2014, is this correct?

    • Milen Hristov 20 February 2013 Reply

      Hi, you are allowed to buy regulated land as from 1st Jan 2012. You will be able to buy agricultural land and forestry land as from Jan 2015.

      • Eddie 27 February 2013

        Thank you…
        Another question….
        I own a plot in Bulgaria of Agricultural Land, it is 10,000m2. I have been asked if I will sell 1,000 m2 plots, making this 10 plots, what is the cheapest and simplest way to do this?

  • terry farmer 12 March 2013 Reply

    dear mr Hristov, i have a dormant co in bulgaria,which i have to make annual returns, i had to set it up 5years ago as i was buying a small plot of land. i would like to get your advice on how to go about transferring it into my own name ! i would be pleased if you will furnish me with your office address and contact tel no ? with thanks terry

    • Milen Hristov 1 April 2013 Reply

      Hello Terry, our contact details can be found here: Contact Details

  • Martina 28 March 2013 Reply

    Hi, we (my friend and I) own a company in Bulgaria and we bought a house. In future we’d like to sell this house, but we’d prefer to sell it as private person. How can we transfer ownership and how much it costs? Thank you.

  • michael miles 31 March 2013 Reply

    Hello Milen,
    I am born and bred an English citizen. I’ve had a bulgarian company set up since late 2008. It was basically set up from the UK side at the bulgarian office in London. It was done so as to comply with a legal requirement for buying land in Bulgaria. My name is the only one recorded on the company paperwork. I have been buying small plots of regulated land over the years through the same agent; these plots of land are regulated and there are either no or no habitable dwellings on any of the plots. This same agent prepares and presents my yearly account to the bulgarian tax authorities to which I pay him for his services every year, so my company should be fully paid up to date. I have no and never have had any business activities within my company, the last transaction may have been some twelve months ago. At present I hold 6 notaries/skitsas for the various land plots ( in my company name ) at my own home. Now that a company set up is no longer a legal requirement to buy regulated land/houses in Bulgaria I may now wish to liquidate my company and have my own personal name on the legal paperwork. My agent has said to me to change the company ( to liquidate ) into my own personal name would cost me alot of money. The question is, do I keep paying my agent to process and present my yearly account as I have been doing accordingly every year or can you tell me ( advise me ) as to what the cost would be to liquidate my company if you handled the whole process? If I have the company liquidated would I be liable for any further yearly payment to anybody thereafter? I would be keeping any new legal papers after this in my own home address.

    Regards
    Michael

    • Milen Hristov 1 April 2013 Reply

      Hello Michael, changing the plots to your name will not cost you a lot. I can you please email me scanned copies of your title deeds and I will give you a quote for the liquidation and property transfer to your own name. It’s a common misinformation by non-corporate lawyers to ‘advice’ people of the costs of such legal procedure.

  • harry ivey 17 November 2015 Reply

    Hi, I have a house in Bulgaria and therefore a company to be liquidated because I missed the deadline. I wonder what the extent of power of attorrney is for my solicitor to act on my behalf in initiating liquidation with me as liquidator and the house being eventually being transferred to us as shareholders? How are his powers limited once I sign the power of attorney form? Power of attorney is a worrying thing since it devolves power of course and one is worried about what can be lost!

  • Martin 26 January 2016 Reply

    Hi, I bought a house in Bulgaria in 2013. It came with a small plot of land. When I went there to finalise the paperwork, I was told I have to create a Business in Bulgaria because I was (and still am) married, and my wife did not come with me to sign the paperwork (she stayed in the UK).

    Ever since I have had to pay an accountant a yearly fee for basically doing nothing. Was I advised correctly ?

  • diane webster 20 March 2016 Reply

    how much to put my partners house into his own name it has 20,000 leva on paper work thanks

  • Maria Ferguson 29 June 2016 Reply

    Dear Mr Hristov,
    My partner died in December and Im trying to make sense of all the paperwork, basically, our company has now been transfered into my name alone, however!. We were advised 9 years ago to make our company VAT registered, my partners dream was to train and teach Engineering, in the meantime, he put forward and claimed some VAT, but became very ill 4 years ago! We left our company dormant but in the hands of our accountant , paid all our bills and dues, electric/water bills and health insurances, but a zero rated end of year accounts. Now I just want to have a quiet life Mr Hristov, I havent got a buisness we never started the buisness we have never earnt any money from it apart from some building materials, how can I just become a non-trading company with an annual zero account or have it transered into my name. If I owe the VAT man some money I would pay it back, but my accountant and my solicitor say it cant be done easily!!!! I have nothing to hide, my accountant has been working on our behalf for the last 6 years, but now is retiring from his buisness leaving me bewildered and confused!!!!!! Im sorry it sounds so long winded I do hope you can shed some positive light for me, the last few years have been painful and sad. Regards Maria

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