Real Estate Investment in Bulgaria: The Complete Guide

Bulgaria is rapidly becoming a popular destination for real estate investors from around the world. This small country, rich in culture and natural beauty, offers numerous opportunities for those looking to expand their real estate portfolio and obtain benefits such as extended residency.

In this guide, you’ll learn how to obtain residency in Bulgaria through real estate investments, the legal requirements, and the advantages that come with it.

Real Estate Investment in Bulgaria: Rules for Foreigners

Foreigners can purchase real estate in Bulgaria, but there are some rules that depend on your nationality. For those from the European Union (EU) or European Economic Area (EEA), the process is simpler. If you are a citizen of an EU/EEA country, you can buy land and properties in your name without restrictions. However, if you are a citizen of a non-EU/EEA country, there are some restrictions: to own land, you must open a company in Bulgaria.

Non-EU foreigners cannot directly own land in Bulgaria but can do so through a local company. This is a crucial step for investing in real estate with land and is a common practice among many international investors looking to diversify their investments in Bulgaria. If you are considering investing in apartments or condominiums instead, the process is more straightforward: since land ownership is not included, these properties can be purchased directly.

For those interested in establishing a Bulgarian company, there is a detailed guide available on company formation to help you understand the process and required documents.

Read also: Strategies for Corporate Cost Control in Bulgaria

Real Estate Investment in Bulgaria to Obtain Residency

Purchasing property in Bulgaria does not automatically grant residency, but it is an essential step towards obtaining it. Bulgaria offers a residency opportunity for real estate investors who meet certain criteria. To obtain an extended residency permit through real estate investment, the following requirements must be met:

• Minimum Investment: You must invest at least 600,000 BGN (approximately 300,000 EUR) in Bulgarian real estate. This investment can be spread across multiple properties, depending on the investor’s preferences.
• Type D Visa: Before applying for a residence permit, non-EU/EEA citizens must obtain a Type D visa, which is a long-term visa.
• Health Insurance: Health insurance that covers your stay in Bulgaria is mandatory.
• Criminal Record Certificate: A clean criminal record certificate issued by your country of origin.
• Proof of Investment: Documents proving the investment, including purchase contracts.

Permanent Residence and Bulgarian Citizenship: The Full Path

One of the main advantages of obtaining residency in Bulgaria is the possibility of applying for permanent residence and, subsequently, citizenship. Here’s an overview of the process:

• Permanent Residence: After obtaining an extended residence permit for five consecutive years, you can apply for permanent residence. This status eliminates the need to renew the permit annually and offers greater stability.
• Bulgarian Citizenship: After residing in Bulgaria with permanent residence for an additional five years, you can apply for citizenship. This offers the possibility of becoming an EU citizen, with all the associated benefits, including freedom of movement throughout the European Union.

Read also: Strategies and Solutions for Managing Financial Challenges in the Workplace in Bulgaria

Real Estate Investment in Bulgaria: Useful Tips and Advice

Real estate investment in Bulgaria offers numerous opportunities, but it is important to follow a well-planned strategy to maximize returns and minimize risks.

To meet the 600,000 BGN investment requirement, you have the flexibility to choose between different options:

• Residential Properties in Popular Cities: Investing in cities like Sofia or Plovdiv can offer excellent return opportunities, thanks to the growing demand for rental apartments in these areas.
• Commercial Properties: Another option is to invest in commercial spaces or offices in growing areas. This type of investment can provide stable returns through long-term rental contracts.
• Diversification: You can choose to purchase multiple properties, thereby diversifying your sources of income. This strategy reduces risks associated with a single property and increases the likelihood of long-term gains.

As a property owner in Bulgaria, you will be subject to several taxes. It is important to be aware of the taxes you will need to pay and plan accordingly:

• Property Taxes: As an owner, you will be required to pay property taxes, which vary depending on the cadastral value of the property.
• Rental Income Taxes: If you decide to rent out your property, you will be subject to rental income taxes. This type of income is taxed at a flat rate.
• Capital Gains Taxes: If you decide to sell the property and make a profit from the sale, you will have to pay capital gains taxes. The amount depends on the selling price and any available deductions.

It is advisable to work with a tax and legal advisor to ensure you comply with all local regulations and maximize tax benefits.

Why Choose Bulgaria for Real Estate Investments?

Bulgaria offers a unique mix of advantages for real estate investors. Besides relatively low real estate costs compared to other European countries, it provides the opportunity to obtain residency and, in the future, citizenship. The Bulgarian real estate market is still growing, with ample opportunities in both major cities and tourist areas.

• Economic Stability: Bulgaria has shown stable economic growth in recent years, thanks to its EU membership and favorable economic policies for foreign investments.
• Low Cost of Living: Compared to other European countries, the cost of living in Bulgaria is much lower, making it an attractive place to live and invest.
• Tax Advantages: Bulgaria has one of the lowest tax rates in the EU, both for companies and individuals, making it a favorable destination for investors.

Conclusions

Bulgaria offers a clear and defined path for those interested in obtaining residency through real estate investment. With the right approach and a good understanding of the rules, you can not only secure a new home in a fascinating country but also access all the opportunities that come from being a resident and, eventually, a citizen of an EU country.

If you want more details on the process of establishing a Bulgarian company for land purchase or on how to plan your investment, it is a good idea to rely on a financial advisor in Bulgaria, such as Accountancy Bulgaria, who can assist you with the necessary documentation, provide useful advice to facilitate the investment process, and clarify aspects related to taxation.