Bulgaria’s Parliament has approved a ban on offshore companies buying agricultural land, as well as a requirement that foreigners and companies wanting to buy land must have been in Bulgaria for at least five years – an increase from an initially-proposed three years.
The rule on the ban on offshore companies owning agricultural land is that commercial corporations in which the partners or shareholders are directly or indirectly registered in preferential tax treatment jurisdictions may not acquire and hold a right to own agricultural land.
The restriction also applies to joint-stock companies that have issued bearer shares.
This provision, along with the requirement that individuals or corporate bodies must have been in Bulgaria permanently for at least five years, were approved by the National Assembly when voted on the second reading of the Agricultural Land Ownership and Use Act.
When in the process of buying agricultural land, the buyers will have to submit to the public notary involved in the process a declaration about the source of their money.
In the course of debate, there was disagreement about the length of time of residence to be required of foreign individuals and companies buying land.
The Bulgarian Socialist Party initially had proposed three years, but far-right ultra-nationalists Ataka wanted this increased to seven years. Centre-right GERB proposed a compromise of five years, which was accepted.
The amendment to the law follows a failed attempt by the National Assembly to extend the moratorium on foreigners being allowed to buy land in Bulgaria from its scheduled expiry date of January 1 2014 to the beginning of 2020.
Approved amid controversy, including division among the parties of the ruling axis, the resolution to extend the moratorium was rejected by the Constitutional Court.
Commenting on the legislation approved on April 3, local media said that Bulgaria’s Parliament had sent a negative signal to foreign investors by imposing the restrictions on farmland ownership.
The amendments were approved with the support of the BSP, GERB and Ataka, with the Movement for Rights and Freedoms voting against and expressing doubts about the constitutionality of the changes to the law.
(Photo: Clive Leviev-Sawyer)