Bulgaria’s new rules carry cost for old investors, warn lawyers

Photo credit: Graham Chastney 

Bulgaria's property investment regulations changed this year, allowing overseas investors to buy real estate without having to register a company first. But while the new rules are good for new buyers, a law firm warns that old investors are affected too.

Indeed, owners what many property owners do not realise is that to comply with EU legislation the Bulgarian government required all companies to be re-registered by 31 December 2011. The companies which failed to do so can no longer re-register, their trade activities are permanently ceased and they cannot trade or dispose of their assets.

John Howe, managing partner of West Yorkshire-based John Howe & Co, says: "We have been contacted by several owners of Bulgarian property who fear they may lose their assets to the government. There could be many other property owners who don't know about the Bulgarian legal process and who could potentially risk losing their properties."

When new EU laws come into effect in Bulgaria this October, anyone who failed to re-register their company, many now face the prospect of a large bill - and losing the assets of their Bulgarian company to the state, including any property.

John explains: "Our specialist team of property lawyers have done a lot of work investigating the issues surrounding the re-registering of Bulgarian properties and believe they have found a solution whereby individuals can liquidate the company and transfer all the assets to a group of shareholders. The ultimate result is that the property remains in the hands of the original purchaser and isn't lost to the state."