Steps involved for a British citizen to open a Bulgarian Ltd company
2023-04-15
You may have been looking at properties for sale in Bulgaria for a little while and may be have found a particular area that you would like to focus to. Maybe you even have spotted the perfect property!

As you do your research, you will come across the requirement for British citizens to set up a limited liability company within Bulgaria in order to own a freehold property. It's not as scary or complicated as it sounds!

In this article we want to explain what steps are involved to give you a better overview of the process involved in stting up a Bulgarian limited company as a British citizen. 

But first, it is important to understand the background to this requirement.

According to Bulgarian law, non-EU citizens cannot allowed to own land in Bulgaria directly. Therefore, if a British citizen wants to buy a freehold property in Bulgaria, they must establish a Bulgarian limited liability company (LLC) and purchase the property through the company.

Prior to Bulgaria joining the EU, British citizens had to set up a limited company. 

The LLC is considered a legal entity under Bulgarian law, and as such, it is allowed to own property. The British citizen can then own the shares of the LLC, which indirectly gives them ownership of the property.

What are the steps involved?

Obtain a personal identification number (PIN) from the Bulgarian embassy in the UK or in Bulgaria. This process usually takes a few days.

Open a bank account in Bulgaria with a minimum deposit. You will need to provide your PIN and other identification documents to the bank.

Obtain a Bulgarian address. You can rent a virtual office or use the address of a trusted friend or a lawyer.

Register the limited liability company with the Bulgarian Commercial Register. This process can take up to 2 weeks.

Obtain a tax identification number (TIN) for the company. This process usually takes a few days.

Register for Value Added Tax (VAT) if the company is going to be engaged in commercial activities. This step is optional if the company is only going to own property.

Hire an accountant or a lawyer to help with the registration process and ongoing compliance with Bulgarian laws and regulations.

Purchase the desired freehold property through the company.

The entire process of opening a limited liability company in Bulgaria can take up to 4-6 weeks, sometimes sooner if you have the help of a professional. It is highly recommended to seek professional advice from lawyers or accountants who are familiar with the Bulgarian legal system and procedures.

Are there benefits to owning property through a Bulgarian Ltd company?

There can be several benefits to owning a property in Bulgaria through a limited liability company (LLC), such as:

Liability protection: One of the main benefits of owning a property through an LLC is that it limits the owner's personal liability. If any legal issues arise with the property, only the assets owned by the LLC are at risk, and not the personal assets of the owner.

Tax benefits: Owning a property through an LLC can provide certain tax advantages. For example, the company can deduct business expenses related to the property, such as maintenance and repairs, from its taxable income.

Easier inheritance: If the owner of the property passes away, transferring ownership to heirs can be easier through an LLC. The shares of the company can be transferred to the heirs, rather than the property itself, simplifying the transfer process.

Better financing options: Some lenders may be more willing to provide financing for a property owned by an LLC, rather than an individual, due to the added layer of liability protection.

Privacy: Owning a property through an LLC can provide a level of privacy, as the company is the legal owner of the property and its ownership structure may not be publicly disclosed.

As part of the purchase process, we help our British buyers to get a limited company set up and we always recommend the services of a legal professional to handle the paperwork. Buyers are of course free to do the process themselves or engage the services of their own chosen professional.

Please get in contact with us if you have questions or would like to know more!

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