Re-Register your Bulgarian Company or Lose your Property

January 2011 could have a shock in store for foreigners who fail to re-register the companies that they set up as vehicles to buy property in Bulgaria.

By Mike Stock

Most foreigners who have bought property in Bulgaria have had to set up a company in order to purchase. To own land (houses are on land) in Bulgaria, it has been a necessary for property to be bought in a private company name. However, the Government has ruled that all companies that were set up prior to January 2008 must be re-registered in the new system as Bulgaria brings its laws regarding company records into line with European Union practice. Concern is mounting that many owners of Bulgarian property could fail to meet the 1st January deadline.

Failure to re-register is serious as it will lead to the loss of company assets, which for foreign buyers will mean homes, bought in their company's name. The unfortunate owners could also receive a fine, and pays the costs of winding up the company. Any assets held by a company that fails to re-register would, by law, be sold at public auction and the proceeds will go to the government. The re-registration system is already straining under the pressure and there is a serious backlog.

There are a large number of lawyers, consultancies and other services are offering to assist people, some legitimate and some who are just looking to make a quick profit. Some sort of professional help may be essential for foreigners who do not understand Bulgarian and are unfamiliar with Bulgarian legal procedures.

Of course you can argue that with the mess that the system is in at the moment, the government will have to extend this deadline, this is in fact probably going to happen and our sources tell us that the new deadline will be in June2011. A bill for this is pending but our advice is do not rely on this, re-register now. The workings of the Bulgarian Government is a fickle thing.

If you own Bulgarian property, act now. You have been warned.