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Transferring Money to Bulgaria

If you are considering investing in property in Bulgaria then it is wise to learn all about the ins and outs of transferring money because there are going to be many incidences when you are going to need to make money transfers to your Bulgarian bank account. Jonathan White author of “Buying a Property in Bulgaria” gives some valuable advice on tackling this issue.


As you will probably be transferring money, not only for the property you are buying, but also for other costs, including builders’ fees, materials, bill payments etc, it is well worth researching companies that can provide a convenient service for transferring money to and from Bulgaria. Your average high street bank does not offer you the best rate of exchange on currency, no matter what they tell you. You may pop into your local bank and be quoted a rate of 1.43 euros to the pound (for example), but find a specialist currency exchange company that can give you a rate of 1.48. That could be a significant saving for you, so it is well worth the time and effort exploring. So what are the practical considerations when it comes to sending money to Bulgaria? The first point is to remember that it takes time to send money overseas. How long typically depends on the country and means by which you transfer. On average, you can expect the transaction to take anything from three days to seven days, from start to finish. The second point to consider is the transfer fee. Different organisations have different fee structures and it is well worth researching which one works for you.

Transferring your money using an internet-based service

Let’s take a look at XETrade, a service of Canada-based internet company XE.com that provides currency exchange services. The benefit with this service is that you can find excellent exchange rates and conduct the transaction completely on the internet without speaking to anyone.
This can be very convenient, especially if you are used to conducting your financial affairs online and don’t have the hang-ups that some people still have about performing financial transactions on the web. That said it is worth researching the company that you are planning to use, especially for financial transactions. XE.com, for example, has been in business since 1993 and has been providing XETrade for over three years. You can access their website at www.xe.com/fx/

Once you have successfully set up an XETrade account you will need to log in to the system and define the account that you want to transfer the money to in Bulgaria. You may also find it useful to define additional beneficiaries if you are dealing with other organisations in Bulgaria. For example, if you are renting properties out, you could define the property management company as a beneficiary for any payments you need to wire to them. You will need to ensure that they can receive payments in Euros. Your money will be transferred to your Bulgarian bank account, generally within seven working days, from start to finish:

So what does it cost?
There are three potential costs to consider:
1. The cost of sending a payment from your bank to XETrade (which is charged by your bank).
2. The cost of XETrade sending the funds to your Bulgarian bank account.
3. The cost of your bank in Bulgaria receiving the funds.

If you use internet banking and pay via BACS (in the UK) there is usually no charge. The cost of sending the money via XETrade to your Bulgarian bank account is usually less than £10, but it is not fixed. The XETrade wire fee is always quoted up front before you confirm your transaction.
The cost of receiving the money in your Bulgarian bank account can vary, but is quite typically 1 euro for every 1,000 euros transferred. Of course, you can also shop around for a bank in Bulgaria that does not charge for the receipt of foreign funds at all. So, if you conduct all of these transactions on the internet, and you send 5,000 euros, you can typically expect a cost of:
a.  12 euros (XETrade charge – note this is just an illustration of a typical transaction)
b.  5 euros (cost for your Bulgarian bank receiving the funds, assuming 1 euro charge for every  1,000 euros). This will generally be charged by your Bulgarian bank of whichever service you use to send the funds.
c. 0 euros charge for sending the payment from your bank to XETrade (assuming that you use the internet to transfer the funds via BACS)
So a total of 17 euros.

If you were to ask your bank to transfer the funds, they would typically charge £23 for a CHAPS transfer in the UK, but you may still have the cost of receiving the money in Bulgaria to add to that. You do need to be aware that UK banks do limit bank transfers on the internet via BACS, which can be anywhere between a daily limit of £2,000–£10,000. Therefore, I advise you to contact your bank to determine what the maximum daily transfer amount is.

Alternative ways of transferring money

1. Finding a foreign exchange currency company who you can purchase a euro rate from, and can then transfer the money for you
2. Sending the money directly between your own bank account and your Bulgarian bank account. This is typically the most expensive option.

With some foreign currency exchange companies (including XETrade) you also have the option of putting in a bid and a bid expiry date. So you can effectively state the rate that you want, and as soon as that rate becomes available, it will be secured for you. For such a bid, you do need to declare the amount you want to purchase in advance, and must define a date by which you want to close the bid. If you do place a bid, you should always ensure that you have the funds available to pay for it. There are currently no restrictions on the import or export of monies to and from Bulgarian bank accounts. This is obviously subject to change and you must check with your Bulgarian bank or solicitor for the latest situation.

Managing the ever-changing exchange rate

One thing is for certain. Foreign currency can be a volatile market, and one that sees a rapid frequency of change, virtually each second. A good place to keep an eye on the exchange rate fluctuations is the Business and Money page of the BBC’s website: http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/overview/default.stm

To view the current rate of exchange in more detail you can click on the currency you are interested in to see more detail. Here, you will see a graph, which will show you how the rate has varied over the period you have selected.

Perhaps the most useful rate to track, if you are going to buy today, is the intraday rate. This shows the fluctuations of the currency over the course of the day. It allows you to see whether the rate is either on an up trend or a down trend. As you are likely to be buying your property in euros, you want to get as high a rate as you possibly can for your purchase. That means you should ideally aim to buy on an up trend. Note that the exchange rate shown on the BBC website is a mid rate, and the actual rate you would get from your broker would typically be about 60-80 points lower than this rate. So, if the published rate on the website was 1.4880, you would typically expect to get about 1.480 from your broker. This does vary, but this provides you with an approximate indication of what to expect.

Sometimes, though, you want to have peace of mind, and if you want to secure a rate, you can buy a future rate with a currency exchange company. You will get a slightly lower rate, but would usually have the option to settle within 30 days.

Let’s look at an example. Assuming that you want to buy at the rate of 1.48 – when the published rate is 1.486 – you can call your broker at the currency exchange company and request a future buy of the euro. They will offer you a rate – and assuming you get the 1.48 or above – you can secure this with them.

So, even if the rate drops over the next 30 days, you will still have secured the rate of 1.48. Naturally, this works both ways, so the down side is that if the rate improves, you lose out on the improved rate of exchange. If you are either running a tight budget or don’t have all the money that you want to transfer yet, this is the recommended route.

So, yes, the rate can go up and down like a yo-yo, but there are steps you can take to avoid losing out. The key is to keep a constant watch on the rate of exchange and be aware of the trends. Try to buy on an up trend, and use the three or twelve month view of the graph to see whether it’s likely to continue on a downward trend. There are no guarantees and you can only use your powers of intuition, knowledge of what’s happening in the world economy and simple interrogation of the exchange rate graphs to try and predict whether the rate is going to grow any higher – or, ultimately – start its bear run.

For those of you unfamiliar with the term ‘bear run’ it generally refers to the consistent decline of the rate and is commonly used to describe a down trend on the stock market. Here, it refers to the decline of the exchange rate.

Extract from Jonathan White’s “Buying a Property in Bulgaria” published by How To Books Ltd.