BULGARIA IS THE WORLD’S BEST OUTSOURCING DESTINATION IN 2015
Bulgarian latest legislation and active government policy towards attracting foreign investors won Bulgaria The Best Outsourcing Destination for 2015 Award. The country was recognized as such in a prestigious international ranking, organized by the National Outsourcing Association UK. The prize was awarded on a special ceremony of 2015 European Outsourcing Awards in Lisbon.
GREEK COMPANIES MOVING BUSINESS TO BULGARIA FOLLOWING SYRIZA’S VICTORY
Shortly after Syriza won the 2015 parliament elections in Greece many Greek investors started setting up Bulgarian commercial companies. Some of them are waiting to see whether there will be a new agreement and some sort of debt forgiveness or the financial rescue package for Greece will be officially frozen. Others have already started to partially move their business to Bulgaria having in mind the party’s pre-elections program according to which personal income and corporate taxes would be raised to up to 75%.
PERMANENT RESIDENCY IN BULGARIA FOR BGN 1 MILLION FROM 2014
With the last changes of the Law for the Foreigners in the Republic of Bulgaria voted in December 2013, all foreigners who are interested can deposit the amount of BGN 1 000 000 (a little bit more than EUR 500 000) in a local bank in Bulgaria for a term of at least 5 years, in exchange of which they can receive a permanent residency in Bulgaria. This permit also allows foreign citizens to travel freely within the whole EU.
EU CITIZENS BUY AND INHERIT LAND IN BULGARIA FROM 2014
Foreign EU citizens will be able to purchase or inherit Bulgarian land freely after January 1, 2014. The grace period Bulgaria was granted by the European Union to lift this restriction expires at the end of 2013. After the end of this year anyone wishing to buy agricultural, forest or other type of land will be able to do it on equal terms with Bulgarians. Presently, buying land outside town planning, is possible only if the foreigner incorporates a Bulgarian company and then purchases the land into the name of the company.
EXPANSION OF CHINESE BUSINESSES INTO BULGARIA
In May 2013 the Bulgarian city of Plovdiv welcomed the biggest Bulgarian-Chinese business forum ever held as more than 100 Chinese and 200 Bulgarian companies participated in the Bulgarian-Chinese Forum for Investments and Tourism DISCOVER AND INVEST IN BULGARIA. This is the second event of the initiative following the forum INVEST IN BULGARIA which took place in November 2012 in Shanghai. The forum focuses on the increase of the trade relations between the two countries as well as Chinese investments in various fields. Chinese companies are mainly interested in agriculture, high tech and green economy investments. It has been announced that a few major projects will be launched in Plovdiv very soon.
CYPRUS BAILOUT 2013: NEW TAXES, INVESTORS MOVING TO BULGARIA
Some Cyprus based businessmen and companies have already started relocating their businesses to Bulgaria following the recent unprecedented measures in Cyprus: new tax on bank deposits between 6.7% and 9.9% as well as corporate income tax raised up to 12.5%. Investors are now turning to Bulgaria where both corporate and personal income tax remain 10% (the lowest rates in the whole EU) and the country has become a role model for fiscal discipline and bank system stability with the second lowest public debt of all European Union member states. Many analyzers consider the reputation of Cyprus of being an oasis for foreign investments irreparably tarnished after the ‘Deposit Theft’ events.
BULGARIAN RESIDENCE PERMIT FOR NON-EU CITIZENS WHO INVEST IN REAL PROPERTY
For the first time in Bulgarian legislation history residence permit can be obtained by investing in real estate property. The minimum required amount of the investment is 600 000 BGN (approximately 300 000 EUR). The investor is granted long-stay permit for one year that can be renewed for 5 years. After the fifth year permanent residence is granted. This is an excellent opportunity for well-to-do non-EU citizens to become EU residents and travel all over Europe and at the same time enjoy a luxury home in Bulgaria.
2013 ANNUAL TAX RETURNS SUBMISSION IN BULGARIA
31 March 2013 is the deadline for submission of annual tax returns and annual reports by all BG registered companies as well as deadline for payment of corporate tax due for 2012. Even companies with zero tax due have the obligation to submit nil tax returns. Otherwise fines will be imposed by Bulgarian authorities.
BULGARIAN CITIZENSHIP BY BUSINESS INVESTMENT OF HALF A MILLION EURO
Bulgarian Parliament voted final amendments of the Investment Promotion Act on 29 November 2012. According to the new texts foreign investors are now entitled to adopt Bulgarian citizenship if they match two basic requirements: have had a permanent stay permit for more than one year and have invested at least BGN 1 million (approximately half a million euro) in the capital of a Bulgarian company. There are a few further specifics and conditions but as a whole the new law is much more encouraging and attractive for all who wish to get a fast EU citizenship.
BULGARIA LAUNCHED AN OFFICIAL WEBSITE DEDICATED TO FOREIGN PROPERTY INVESTORS
Bulgarian Registry Agency launched a new information website www.property-in-bulgaria.bgspecially dedicated to foreigners who own properties in Bulgaria or are considering buying a Bulgarian property. The website contains general information of requirements of Bulgarian legislation regarding selling/buying properties, as well as information for related taxes, fees and bills. Currently the information is available in English and Russian considering the fact that most of the property investors come from the UK and the Russian Federation. Although the website is very informative it is explicitly stated that it should not be regarded as an alternative to hiring a good lawyer as there is no a universal tool providing solutions to the variety of options that may appear in a property transaction or to the issues in the field of property management.
BULGARIAN CITIZENSHIP FOR SALE
New amendments to the Bulgarian Citizenship Act, introducing simplified procedures for obtaining Bulgarian citizenship, were suggested by the Council of Ministers. Deputy Prime Minister Simeon Djankov suggested a fast procedure for granting Bulgarian citizenship to foreign investors that have invested over 200 000 Bulgarian levs in the country. At present foreigners who want to get a permanent stay should invest at least 500 000 euro. If the amendment is voted by parliament that would be a great step forward in Bulgarian foreign investors policy.
DELAYED FLIGHT COMPENSATION
Airlines should pay compensation to passengers whose flights are delayed by three hours or more unless the delay is due to extraordinary circumstances. The above was stated by a senior official Yves Bot who is an Advocate General of the EU’s Court of Justice. He advised that the court should uphold its own ruling from 2009 reading that delayed passengers are entitled to claim compensation depending on the distance of their flight. Although the ruling has been challenged by a group of airlines it is very likely that the final decision expected towards the end of 2012 will confirm delayed flights compensation.
NO MORE RESTRICTIONS FOR EU CITIZENS TO BUY AND POSSESS LAND IN BULGARIA
All Nationals of the European Union as well as nationals of countries part of the European Economic Agreement Area are finally allowed to acquire ownership over land for secondary residence in Bulgaria after 01.01.2012. This change applies to regulated land only. The restriction on the purchase of agricultural land and forest areas stays until 2014.
SCHENGEN VISAS OFFICIALLY RECOGNIZED IN BULGARIA
By virtue of the Bulgarian Council of Ministers Resolution taken in January 2012 the Republic of Bulgaria shall recognize as equivalent to its own national visas all unified (Schengen) visas, long-stay visas (type D) and residence permits issued by EU members states for which the Schengen Agreements apply. All visa holders shall have the right to stay in Bulgaria within the legal terms and by observing the validity of the Schengen visa but no longer than 3 months for each 6 months period.
AGREEMENT FOR ECONOMIC COLLABORATION BETWEEN BULGARIA AND PAKISTAN
On 23.08.2011 an Agreement for Economic Collaboration between the Governments of the Republic of Bulgaria and Islamic Republic of Pakistan came into force. Its purpose is to develop and widen the mutually beneficial economic collaboration between the two countries in the fields of the industry, agriculture, energetic, tourism, culture, education, public health and other certain fields. With regards to its most effective execution, a special Intergovernmental Commission for Economic Collaboration shall be established which shall include representatives of both Bulgaria and Pakistan. The Agreement contains some steps which should help to intensify the economic collaboration. Some of them are: aid in the field of establishing of trading representation offices and branches of companies in the two countries, stimulating of the business-relationships, exchange of business information etc.
BLUE CARD FOR NON-EU SPECIALISTS IN BULGARIA
Any non-EU specialist can alpply for a Blue Card in Bulgaria as of 1st June 2011. Before its issuance, however, a special market test should be passed which is organized by the Bulgarian National Employment Agency. The Agency shall ascertain that for the respective position of high qualification specialists there are no suitable candidates from Bulgaria. In order to obtain a Blue Card the foreign specialist will have to have already established contact with an employer in Bulgaria. The EU Blue Card also allows its holders to bring their family members to the country.
ONLY BANK TRANSFERS IN PROPERTY DEALS IN BULGARIA – CONFIRMED
As of July 1 2011 all payments in property deals in Bulgaria amounting to more than 10,000 levs (a little more than 5,000 euro) shall be made via bank transfers only – according to the last Bulgarian law amendments. All amounts shall be transferred into an account chosen by the parties, incl. to a special bank account of a notary public. Another important amendment is that the parties shall be obliged to sign a special declaration confirming that the declared amount is the real price of the property. The purpose of these new measures is to stop the common practice of selling (actually declaring) properties at much lower than the real market prices.
NO MORE CASH PAYMENTS IN PROPERTY DEALS AND BUSINESS TRANSACTIONS OVER 15 000 LEVS IN BULGARIA
According to the new Law on Restricting Cash Payments in force as of February 22, 2011 amounts over 15 000 Bulgarian levs (7670 euro) shall be made only by bank transfer or via a deposit into a bank account. The purpose of this new law is to limit the number of false deals and VAT draining schemes. In future cash payment for the purchase of a real property will not be possible in case the purchase price is equal to or exceeds 15 000 levs. In case of any offence against this law found by the National Revenue Agency authorities the offender shall pay a fine within the range of 25 % and 100% of the cash transaction amount.
9 % VALUE ADDED TAX (VAT) RATE FOR BULGARIAN TOURISM
Bulgarian Parliament voted a flat 9 % Value Added Tax (VAT) rate for tourism sector in force as of 01 April 2011. So far rates have been 7 % for group organized tourism and 20 % for individual tourism respectively. The change was forced by a the requirement of the European Union for unification of VAT rates in tourism and risks of sanctions by Brussels in case the country does not comply with this requirement. Local tour operators and hotel-keepers opposed the new law of course, as most of the contracts with foreign tour operators for organized tourism for the summer season have already been signed, all prices calculated at 7 % VAT.
COMPANY RE-REGISTRATION DEADLINE EXTENDED
The deadline for re-registration of all Bulgarian companies has been now extended with a further year and currently expires on 31st December 2011. After this date all companies that have not been duly re –registered are to be liquidated and erased from any registers at the expense of the company owners.
BULGARIA IN THE SCHENGEN ZONE IN 2011
According to different sources, Bulgaria – the youngest EU member, will join the Schengen zone in 2011. Bulgaria would wish this to happen as early as March 2011 but there have been various speculations that the process will be delayed. Anyway, even according to the most pessimistic forecasts the joining must be a fact by the end of 2011.
FLIGHTS TO BULGARIA NOW COST ONLY 33 EURO INCLUSIVE OF ALL AIRPORT FEES
The first airplane of the Irish airline Ryanair flying from London to Plovdiv landed on 2 November 2010 on the airport of Plovdiv – Bulgaria’s second largest city and a great tourist destination, situated between the ski resorts of Bansko and Pamporovo. This is the beginning of the first regular scheduled all year round air service provided by Plovdiv airport which now has the capacity to operate an air service for all types of airplanes and to attend up to 1000 passengers per hour. The low price is as a result of a government decision for a permanent reduction of landing fees of this particular airport. Regular charters from and to Moscow are scheduled at Plovdiv airport for this winter. The launch of a regular all year round route Plovdiv – Moscow is being negotiated at the moment. Apart from Ryanair, the airport is trying to attract some Turkish airlines and to launch new routes.
BULGARIA PRAISED IN A FOREIGN BUSINESS REPORT
Bulgaria is amongst the most hospitable places on Earth for foreign investments. This shows a report of The World Bank which examines barriers before foreign investments in 87 different countries around the world. Bulgaria receives highest score for its Public Trade Register which makes possible fast company registrations.
NO MORE CASH PAYMENTS OVER 5 000 LEVA
Cash payments amounting to more than 5 000 leva will be possible only via bank transfers. This is a provision of the brand new Cash Payments Act which is prepared by the National Revenue Agency but still not voted in Parliament. Severe fines could reach up to 100% of the amount of any cash transaction over 5 000 leva according to the new law provisions.
EVERY CONDOMINIUM TO CALL A GENERAL ASSEMBLY BY THE END OF JUNE, 2010
According to the Condominium act in force as of 01/05/2009 all condominiums are obliged to do the following:
1. To call a General Assembly of Owners;
2. To enter details of each owner in the Condominium into the Book of Owners;
3. To have the building registered with the special Public Registry of buildings and to have the Book of Owners presented before the relevant authorities;
The registration of the building is free of charge and is an obligation of the Manager of the Condominium. In the event that a General Assembly of Owners has not been held prior to the specified deadline, the Mayor of the Municipality shall be entitled to call a General Assembly and organize the election of a Manager. Unofficially the prolongation of this deadline is being discussed.
MAY 15, 2010, BANSKO WAS HIT WITH HUGE FLOODING
Glazne River overflowed at three places, causing severe damage. The road adjacent to the river has washed away in some parts. At least 10 hotels and twenty residential buildings in the South Western part above the Gondola have been damaged. Bansko Royal Towers, Cedar Lodge and Guiness hotel are among those which have been hit very hard. The emergency draining works are continuing. Many insurance claims are expected to be submitted.
FLIGHTS FROM EUROPE TO PLOVDIV TO COST ONLY 1 EURO
Flights from the biggest European capitals to the city of Plovdiv will cost only 1 euro. The offer comes from Ryanair which services about 63 million passengers a year. The airlines now negotiates regular flights to Plovdiv. As of May 1, the reduction by 50% of the airport taxes comes into force. It was approved by Bulgaria’s cabinet and will be valid for 2 years.
NO MORE CASH PAYMENTS IN REAL ESTATE TRANSACTIONS IN BULGARIA
Bulgarian Parliament voted at first reading a ban on cash payments in real estate transactions as well as a few other changes to the Notary Act. Two major changes have been proposed – payment of purchase price in property deals to be by bank transfers only and both parties of the deal to be obliged to present a declaration that the price pointed in the title deed is the actual price that has been paid. The final word of Bulgarian Parliament is expected soon.
NEW CADASTRAL MAP OF BANSKO AT LAST
The process of updating Bansko cadastral map started a few years ago and now it has been complete. The cadastral map contains data about location, borders, size of properties and the estate rights on them. All property owners, especially those who are thinking of reselling their apartments, should make sure that their property is included in the cadastre plans. Notary completions on real properties shall be performed only after presenting of a cadastral scheme of the property for sale provided by the local office of the Cadastre Agency.
THE MINIMUM FOUNDATION CAPITAL FOR A LIMITED PARTNERSHIP IN BULGARIA – ONLY 2 BGN (1 EUR)
The minimum required capital of a limited liability company under Bulgarian law has now been decreased from 5000 BGN to 2 BGN ( about 1 EUR) thus making Bulgaria one of the countries in the world with the lowest minimum foundation capital. It is believed that this measure will create a more favourable legal climate for startups and will encourage entrepreneurship in Bulgaria.
TAXATION NEWS FOR PROPERTY INVESTORS
Since January 1, 2010 capital gains arising from the sale of a real property are taxable 10%. The gain is calculated on the difference between the sale price and the price of acquisition as per title deed. The new rule here is that gains arising from the sale of a private residence will be tax exempt only if the property has been owned for at least three years.