23 Feb Acquisition of land in Bulgaria by foreigners
Foreign nationals and legal entities can acquire real estate in Bulgaria such as buildings and right-to-build in Bulgaria but the ownership of land (both urban and agricultural) is generally reserved for Bulgarian nationals and legal entities.
With respect to EU Member States, upon joining the European Union in 2007 Bulgaria opted to maintain for a certain period restrictions laid down in its legislation, concerning the acquisition of ownership over land in urban territories by individuals or legal entities of other EU Member-States or States, which are a party to European Economic Area Agreement (EEAA).
The restriction regarding acquisition of urban land expired on 1 January 2012, followed in 2014 by the limitation concerning the ownership of agricultural, forest and forestry land in Bulgaria by residents of other Member States and EEAA residents. Currently, self-employed farmers nationals of EU Member States, who wish to establish themselves and reside in Bulgaria, should be able to acquire ownership over agricultural, forest and forestry land in Bulgaria.
In should be noted though that in May 2014 the Bulgarian Parliament amended the Law on Ownership and Use of Agricultural Lands (Закон за собствеността и ползването на земеделските земи) to impose certain limitations on the acquisition of agricultural land applicable to certain legal entities where:
- the shareholders are off-shore companies or indirectly hold shares in such companies;
- the shareholders are not EU Member State or EEAA nationals;
- the sole shareholder of a limited liability company (or joint-stock company) is not EU Member State or EEAA national; or
- a joint stock company with bearer shares.
There is also another restriction introduced with the June 2014 amendment. A prerequisite for ownership of agricultural lands is that the acquirer (or, in case of legal entities – the shareholders) resides in Bulgaria for at least 5 years prior to acquisition (save for the case of inheritance). This restriction is regarded as controversial since there are claims it might be unconstitutional and in violation of the EU law. While it is currently in force, it is not clear who is in charge of monitoring its enforcement or what is the applicable procedure to prove compliance with the residency requirement.