Limitations to Foreigners
1. Are there in your national system any limitations to foreigner citizens or foreign companies/companies controlled by foreign citizens regarding the acquisition of immovable properties? If yes:
Yes, in the current Bulgarian legislation there are restrictions on the acquisition of real estate by foreign citizens.
1.1. Which legal regulations regulate in your country the prohibitions or limitations for foreigners’ acquisitions in case of transfer of property? Please specify the legal regulation and/or the range of the regulation that contains the prohibition.
Constitution of the Republic of Bulgaria:
«Art. 22. (1) Foreigners and foreign legal entities may acquire ownership rights to land under the conditions resulting from the accession of the Republic of Bulgaria to the European Union or pursuant to an international treaty ratified, promulgated and entered into force for the Republic of Bulgaria, as well as by legal inheritance.»
Law property:
«Art. 29. Foreigners or foreign legal entities may acquire ownership rights to land under the terms of an international treaty ratified in accordance with Art. 22, par. 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, and foreigners – also in case of inheritance by law. Foreigners and foreign legal entities may acquire ownership rights to buildings and limited property rights to immovable property in the country, unless otherwise established by law.»
Law on the ownership and use of agricultural lands:
«Art. 3. (4) Foreigners or foreign legal entities may acquire the right of ownership of agricultural land under the terms of an international treaty ratified in accordance with Art. 22, para. 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, and foreigners – also in case of inheritance by law.
(7) The following cannot acquire and hold ownership rights over agricultural land: 1. Commercial companies in which the partners or shareholders are directly or indirectly companies registered in jurisdictions with a preferential tax regime. 2. Commercial companies in which partners or shareholders are foreigners, other than the natural persons under para. 4 and 5, or foreign legal entities, other than those under para. 4 and 6, as well as sole proprietorships established by such individuals or legal entities.
3. Joint stock companies that have issued bearer shares.
(8) Foreign legal entities and foreign citizens may acquire the right to use agricultural land or other limited property rights on land under conditions and according to the procedure determined by law.
Art. 3b. (1) Foreigners who acquire the right of ownership of agricultural land by inheritance by law, but do not meet the conditions provided for in the Treaty of Accession of the Republic of Bulgaria to the European Union, or otherwise not provided for in an international treaty ratified in accordance with Art. . 22, para. 2 of the Constitution of the Republic of Bulgaria, are obliged within three years from the discovery of the inheritance to transfer the ownership to persons who have the right to acquire such properties.»
Forest Law:
«Art. 23 (5) Foreigners – citizens of a third country, as well as foreign legal entities created in accordance with the legislation of a third country, may acquire ownership rights to forest territories under the terms of an international treaty ratified in accordance with Art. 22, para. 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, as well as by inheritance by law.
Art. 24 (1) the persons under Art. 23 (5), who acquire the right of ownership of forest territories through inheritance by law and for which no other provision is made in an international treaty ratified in accordance with Art. 22, (2) of the Constitution of the Republic of Bulgaria, are obliged within three years from the discovery of the inheritance to transfer the ownership to persons who have the right to acquire such properties.»
1.2. What do these limitations consist of?
1. According to Art. 22 of the Constitution of the Republic of Bulgaria (1) foreigners and foreign legal entities outisude of the EU may acquire ownership rights to land by virtue of an international treaty ratified, promulgated and entered into force for the Republic Bulgaria, as well as through inheritance by law.
2. The following restrictions are provided in Art.29 of the Bulgarian Property Act:
Art. 29. Foreign citizens or foreign legal persons shall have the right to acquire ownership of land under the terms of an international agreement, ratified by the manner of Art. 22, para 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, and the foreigners – also through legal succession.
Par.2. Citizens of Member States of the European Union or of the states – parties to the European Economic Area Agreement shall have the right to acquire ownership of land, observing the requirements, established by a law, in accordance with the terms of the Treaty of Accession of the Republic of Bulgaria to the European Union.
Par.3. Legal entities from Member States of the European Union or from the states – parties to the European Economic Area Agreement shall have the right to acquire ownership of land following the procedure of para 2.
Foreign citizens and foreign legal persons may acquire the right of ownership in buildings and limited real rights over immovable property in the country, unless otherwise provided by law.
Par.4. A foreign state or an intergovernmental organisation may acquire right of ownership in land, buildings and limited real rights over immovable property in this country on the basis of an international treaty, a law or an act of the Council of Ministers.
Par.5. No foreign state shall have the right to acquire ownership in immovable property in this country through inheritance.
Art.29a. The persons under Art. 29, para 2 who do not reside permanently in the Republic of Bulgaria may acquire ownership of land for second housing property after the expiry of the term, fixed under the terms of the Treaty of Accession of the Republic of Bulgaria to the European Union.
3. The following restrictions are provided by the Farmlands ownership and use act:
Art. 3.
(1) Farm land can be owned by citizens, of the state, of the municipalities and of legal entities.
(2) The political parties and organization, movements and coalitions with political objectives cannot possess right of ownership in farm lands.
(3) Foreign states cannot possess right of ownership in farm lands.
(4) Foreign citizens or foreign legal persons shall have the right to acquire ownership of farm land under the terms of an international agreement, ratified by the manner of Art. 22, para 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, and the foreigners – also through legal succession.
(5) Citizens of Member States of the European Union or of the states – parties to the European Economic Area Agreement shall have the right to acquire ownership of farm land under the terms of this Act after expiration of the term, fixed in the Treaty of Accession of the Republic of Bulgaria to the European Union.
(6) Legal entities from Member States of the European Union or from the states – parties to the European Economic Area Agreement shall have the right to acquire ownership of farm land following the procedure of para 5.
(7) The following persons may not acquire and hold right of ownership of farm land:
- Commercial companies, where partners and shareholders are, directly or indirectly, companies, registered in jurisdictions with preferential tax treatment;
- Commercial companies, where partners and shareholders are foreigners, other than any natural persons referred to in para 4 or 5 or any foreign legal persons other than those referred to in para 4 and 6, as well as sole proprietor commercial companies, established by such natural or legal persons;
- Joint-stock companies which have emitted bearer shares.
(8) Foreign legal entities and foreign citizens can acquire right to use farm lands or other limited real rights in land under conditions and by order, determined with a law. Art. 3a. Citizens of Member States of the European Union – self-employed farmers, who wish to settle and reside permanently on the territory of the Republic of Bulgaria and are registered in their capacity as such following the procedure of the Register BULSTAT Act, may acquire right of ownership of farm land and forest land plots for agricultural purposes from the day of coming into effect of the Treaty of Accession of the Republic of Bulgaria to the European Union.
(2) In the cases where prior to the expiry of the term, fixed in the Treaty of Accession of the Republic of Bulgaria to the European Union, the persons under para 1 no longer carry out activity as self-employed farmers, shall be applied the provisions of Art. 3b respectively.
Art. 3c.
(1) Natural or legal persons who have been resident or established in the Republic of Bulgaria for more than 5 years may acquire right of ownership over farmland.
(2) Legal persons with registrations under Bulgarian law of less than 5 years may acquire right of ownership over farmland if the partners in the company, the members of the association or the founders of the joint-stock company meet the requirements under para 1.
(3) Upon execution of the transaction for acquisition of right of ownership over farm land the buyers – natural persons – shall submit to the notary public a declaration as to the origin of funds and the buyers – legal persons shall provide a document evidencing the origin of funds.
(4) Para 1 shall not apply to acquisition of title over farm land by inheritance by law.
1.3: Do these limitations apply to any foreign citizen, regardless their nationality, or only to non-EU Members national citizens?
The above-mentioned restrictions in the national legislation apply to foreigners and foreign legal entities who can acquire ownership rights to land and agricultural lands under the conditions resulting from the accession of the Republic of Bulgaria to the European Union or by virtue of an international treaty, ratified, promulgated and entered into force for the Republic of Bulgaria.
The restrictions do not apply to the acquisition of ownership rights to buildings and limited rem rights to immovable property, which can be owned by foreigners and foreign legal entities regardless of their nationality.
1.4. Do these limitations have?
- «A defensive/protective purpose»
- An economic purpose
- Both economic and defensive/protective purposes
- Other purposes (please specify)
2. To which kind of land registry unit do these limitations apply? (Example: only land plots, only rural areas, only foreign borders, dwellings and homes, other buildings?
The restrictions above are applicable to the acquisition of ownership rights to land and agricultural lands.
3. To which kind of transfers or burdens do these limitations apply? (Example: to every transfer, non-free transfers, differently in case of inheritance than in case of purchase, mortgages in favor of foreigners….)
The restrictions above are applicable to the acquisition of ownership rights to land and agricultural lands.
4. Apart from the previous limitation to acquisition of property by foreigners, are there any other measures at your country relevant for this topic? (Example: pre-emption rights in case of purchase un favor of a foreigner, social or residential measures bases on nationality and non in residential permits….)
The restrictions on the acquisition of property rights by foreigners, regulated in the legislation of the Republic of Bulgaria, are listed above in the answer to question.
5. To what extent the land registrars’ controls in a deed of transfer the prohibitions imposed to foreigners to acquire land and buildings in your country?
According to the Bulgarian legislation, the registration judges do not check the transfer deed for prohibitions imposed on foreigners to acquire land and buildings in the country. A similar obligation exists for notaries in the country.
5.1. Do you only check if the transfer administrative authorization requirement is met, or do you also confirm that the authorization is valid? For example, do you consider property type, like rural or forestry classification, which might limit foreign transfers? Or do you verify the percentage of foreign land ownership in a specific area, especially if there are restrictions on the number of buyers or land size?
The judges of the entries do not carry out such a check. In the Republic of Bulgaria, the notary must check for the presence of the legal prerequisites for the transfer of ownership. Uniform rules have been adopted in the Republic of Bulgaria regarding the acquisition of agricultural land and forest land by foreigners.
«Law on Forests: Foreigners – citizens of a third country, as well as foreign legal entities established in accordance with the legislation of a third country, may acquire ownership rights over forest territories under the terms of an international treaty ratified in accordance with Article 22, Paragraph 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, as well as by Law on the ownership and use of agricultural land: Foreigners or foreign legal entities can acquire ownership of agricultural land under the terms of an international agreement , ratified in accordance with Article 22, Paragraph 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, and foreigners – also in case of inheritance by law.»
The same requirements exist for both types of properties. There is no legal obligation in the country to verify the percentage of foreign ownership of agricultural land, and no statistics have been collected on what percentage of land in the country is owned by foreigners.
5.2. What would happen if an authorization were needed, and it does not come with the title submitted for registration?
According to the Registration Rules – the Judge of registration issues a decision of refusal. In case of refusal, the transaction is not registered.
5.3. What would happen in case a deed of inheritance in favor of a foreigner transfers property over land or buildings subject to limitations for foreigners’ acquisitions in your country?
Foreigners who have acquired the right to property through inheritance, unless otherwise provided for in an international treaty that has been ratified, promulgated and entered into force for the Republic of Bulgaria, are obliged within three years from the discovery of the inheritance to transfer the property to persons who have the right to acquire such properties.
5.4. If the states have preemption right in case of transfer, would you reject the registration if no notification to the state to enhanced it right is done?
All transactions by which the right of ownership is transferred should be carried out in a form specifically provided for by law before a notary public. The notary according to Art. 2, para. 1 of the Law on notaries and notarial activity is a person to whom the state entrusts the performance of notarial actions provided for in the laws. According to Art. 3, para. 1 of the Registration Regulations, only acts that are notarized or have a notarized signature are subject to registration. Therefore, if the transaction is carried out in the form prescribed by law before a notary, the entry will be carried out.
6. Do you expect any legal modifications on this issue?
At the moment, no change to the mentioned legislation is expected.
