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Purchase Land in Bulgaria Without a LTD Company

It's been the topic of conversation for many, regarding the possibility of a change in Bulgarian law which would allow foreigners

from other E.U states to be able to purchase land in Bulgaria without having to form a LTD company.

Although the new act came into place on January 1st 2012, property buyers actually have the right to purchase as a physical person or via a Bulgarian LTD company from the middle of this month, April 2012 when the 2 acts known as the ‘Ownership Act' and the ‘Agricultural Land Ownership ‘have finally became active.

So What Are the Benefits?

Starting from April 2012 a foreigner from within the EU can buy regulated plots as a physical person or via a Bulgarian company in which the foreigner is a manager or a shareholder.

People who have a LTD company which owns land in Bulgaria can now transfer the ownership to them and thus reduce the municipality tax on it due to the fact that this tax is different for companies as it is to private entities.

If ownership is transferred to the person, the company can then apply for liquidation and this has the benefits of not having to declare a yearly tax return and therefore there will be no need to pay for accountancy fees for the preparation of balance sheets etc. This only applies to companies who are active with regards to earning money.


Liquidation of a Company

Regarding everything mentioned above we have decided that it will be useful for us to explain the procedure, time involved and legal fees in regards with closing of a company in Bulgaria.

The procedure of liquidation requires a specific set of documents that has to be prepared in order for the liquidation to commence and specific documentation submitted at different authorities during the entire process.

The procedure starts with informing the Tax office about the future liquidation and obtaining of a certificate for initiating the procedure.

Then a set of documents should be submitted to the Trade register as the main goal is the Register itself, and other companies and eventual creditors should be informed that the company is in a process of liquidation.

In order to submit the documents to the trade register, first of all the owners of the company has to call a general meeting and to appoint a liquidator of the company, to determine the term of the liquidation etc.

The minimum required term for the liquidation as per the Commercial register Law is 6 months from the moment of publishing of the documents regarding the liquidation.
Bulgarian Commercial Law stipulates that the owner of the company has to submit an invitation to the trade register as the purpose of that is to inform the eventual creditors that they have 6 months to claim their money, and rights etc from the company before it's closed. That term is the obligation as per the law as it gives enough time for all the third parties and creditors of the company to claim any rights and money if there are such due.

The liquidation of the company finishes with obtaining the official documents from the National Insurance Institute (NSI) stating that the NSI has never concluded or has concluded labour contracts. This leads to other consequences if there were no contract, this means that there are no accountancy documents to be presented in regards to salaries paid and social securities. If the company had appointed an employee and has concluded a labour contract, the accountant has to prepare specific documents that has to be presented at the National Insurance Institute stating that all the salaries and social securities of the employee has been paid properly as per the requirements of the law.

During the process of liquidation the company has to prepare the accountancy documents - firstly at the moment of starting and liquidating the company. It is called the Starting Balance Sheet and one at the end of the process called Final Balance Sheet.

The company is still obliged to submit the Financial Report at the Trade register within the legal deadline as this obligation for each company is irrespective of the fact whether the company is in a process of liquidation or not.

Bulgaria Legal Law Office provides a full set of services regarding the liquidation of companies registered in the Trade register of Bulgaria which includes: drafting of a Power of Attorney to enable us to represent the owner of the company; drafting of necessary declarations and protocols for the taking of the decision about closing of the company and appointing of a liquidator; obtaining of documents from the different authorities and full legal representation.
In case the company is "empty" and it never has had employees and labour contracts concluded we offer a solicitor from Bulgaria Legal Law office to become a liquidator of the company because the liquidator is the person who deals with the authorities, signs, submits and presents all the needed legal documents.

If the there were labour contracts and employees our solicitor still can become a liquidator but there are some preliminary checks that should be made in each specific case.

In case you are interested in transferring of the ownership over the real estate owned by your company to your name and/or in liquidation of your Bulgarian company please do not hesitate to contact us by phone or email as we shall be glad to provide the complete legal assistance.

Article written exclusively for Quest Bulgaria by our legal partners Bulgaria-Legal