Why Form a Real Estate Company in Bulgaria
Bulgaria’s affordable property prices, growing tourism sector, and EU membership make it an attractive market for real estate investment. Forming a Bulgarian company to hold and manage property offers tax advantages, liability protection, and easier access to financing compared to owning property as an individual foreigner.
Choosing the Right Legal Structure
The most common structures for real estate businesses are:
- EOOD (single-member LLC) — ideal for solo investors; minimum capital BGN 2; full liability protection
- OOD (multi-member LLC) — suitable for partnerships or joint ventures; shared ownership
- AD (joint-stock company) — used for larger developments or when seeking external investors; minimum capital BGN 50,000
For most foreign investors, an EOOD is the best starting point due to its simplicity, low capital requirement, and straightforward management.
Types of Real Estate Activities
Your company’s registered business activities should match your intended operations:
- Property investment and holding — buying properties for rental income or capital appreciation
- Property management — managing properties on behalf of owners
- Real estate brokerage — acting as an intermediary in property transactions
- Property development — purchasing land, obtaining permits, and constructing buildings
- Short-term rentals — holiday apartments or guesthouses, especially popular in tourist areas like Troyan
Registration Steps
- Choose a company name and verify availability in the Trade Register
- Prepare articles of association specifying real estate as the main activity
- Open a capital contribution bank account and deposit the initial capital
- Appoint a manager — can be the foreign owner or a local representative
- Submit the registration to the Trade Register with all required documents
- Obtain a company seal (optional but commonly used in property transactions)
- Register for VAT if needed, particularly if turnover will exceed BGN 100,000
Special Considerations for Property Companies
Land Ownership
Foreign individuals from outside the EU cannot directly own land in Bulgaria. However, a Bulgarian-registered company — even if 100% foreign-owned — can purchase land without restrictions. This is one of the primary reasons foreigners form companies for real estate investment.
Licensing
Real estate brokerage activities are not licensed in Bulgaria, meaning no special permit is required. However, property development may require:
- Construction permits from the local municipality
- Environmental assessments for larger projects
- Compliance with spatial planning regulations
Tax Implications
- Corporate tax: 10% on rental income and capital gains
- Property transfer tax: 0.1–3% depending on the municipality (typically around 2–3%)
- Annual property tax: 0.1–0.45% of the tax assessment value
- VAT on new buildings: 20% applies to sales of new construction (buildings less than 5 years old)
- Dividend tax: 5% when distributing profits to the owner
Property Investment in the Troyan Area
The Troyan region offers compelling opportunities for real estate investors:
- Affordable property prices compared to Sofia and coastal areas
- Growing tourism driven by the Troyan Monastery, Beklemeto Pass, and natural attractions
- Renovation potential with older properties available at low prices
- Rental demand from tourists, seasonal workers, and remote professionals
Ongoing Compliance
A real estate company must maintain:
- Annual financial statements filed with the Trade Register
- Corporate tax returns submitted by June 30
- Property tax payments to the local municipality
- Accounting records for all property transactions, rental income, and expenses
Get Expert Legal Support
Forming a real estate company in Bulgaria involves legal, tax, and regulatory considerations that benefit from professional guidance. Attorney Biser Dimov in Troyan has extensive experience helping foreign investors structure their Bulgarian property businesses. Contact us to discuss your real estate investment plans.
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