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Investing in Bulgaria

Long before Bulgaria joined the European Union in early January 2007 it was being hailed as the "next big thing." Now at looks as though the next big thing is here. Like many emerging countries, Bulgaria has a lot to offer those individuals looking for not only affordable real estate but also for those looking for a new vacation destination or place to conduct business.

Bulgaria is a country located in the very heart of the Balkan Peninsula between Romania and Turkey and shares common borders with Greece, Macedonia, Serbia, and Montenegro. Bulgaria has just joined the European Union in January 2007. As a result it has firmly embraced the twin principles of democracy and market economics, and is now a full member of NATO. This will open trade with North America.

Millions of euros have been poured into Bulgaria in the years leading up to the country's inclusion into the European Union. The money spent has stimulated the tourist sector and has already had a hugely positive effect on the Bulgarian economy.

Bulgaria enjoys a stable macro-economic climate with:

- economic growth of around 4.5% - one of the highest in Europe,

- annual inflation of 3.8%

- a low taxation rate across the board, and

- a strong growth in tourism.

The area is still relatively undiscovered by tourists, so Bulgaria property has yet to see the spiraling prices that have typified areas such as Spain, France, and Greece. For some cost - A 2-bedroom villa within walking distance of the beach costs around £75,000 in Bulgaria compared to approximately £180,000 in Spain, £200,000 in France, and £110,000 in Greece. - A ski chalet in Bulgaria would cost around £60,000, compared to approximately £250,000 in France and Italy.- What about a country retreat? In Bulgaria, this would cost anywhere from £8,000 - a price virtually unheard of in any other region in Europe. That's good news not only for the expatriateon a budget but also for someone with enough forward thinking to know that real estate investments in Bulgaria have the potential to bring back healthy rental returns.

According to the figures for 2005, the number of British tourists rose by 6.3% to 239,000, and the number of German tourists rose by 5.7% to 535,000. And for the first time, Bulgaria entered into the top ten tourist destinations worldwide for the UK market. Even the World Tourism Organisation placed Bulgaria near the top in terms of tourism growth. In 2003, a growth of 23% was reached compared to 2002 and the income comprised 13% of the country's GDP.

According to the Bulgarian Constitution and legislation foreign persons and companies can invest in real estate in Bulgaria either personally or through a local legal entity. Generally speaking, foreigners as persons can acquire only buildings but not land. Only Bulgarian citizens and legal persons (including such with foreign owner) can obtain the ownership of Bulgarian land.

Therefore, the most popular and preferred by non-residents ways to become the real estate owners are:

- As far as houses, villas, flats and limited ownership rights (the right of use, the right to build a house, etc.) are concerned, you can directly purchase them as a person.

- When talking about Bulgaria real estate with land, you set up a company that will be the owner of the property. Setting up a company in Bulgaria is very easy. All you need is a good solicitor or barrister at law.

Of course, there are other ways to do it, like:

- Establishing a joint venture with existing local companies;

- Setting up a new venture;

- Acquiring a company through privatization;