Restrictions on the acquisition of Bulgarian agricultural land by non-Bulgarian nationals

The Bulgarian Ownership and Use of Agricultural Land Act 1992 (the Act), amended most recently in 2014, restricts the acquisition and holding of property rights in ‘agricultural land’, a phrase which is defined in the Act, by certain categories of entities and persons, and specifically non-EEA individuals and companies.

The ownership of lesser rights in real estate is excluded from the Act’s scope.

Bulgarian agricultural land

The Act defines agricultural land as land which is not purposed for agricultural use (this of itself opens a potential scope for argument as to what determines whether certain land is agricultural is purely its administrative status for the purposes of the Land Zoning Act, or an objective measure like whether or not the land being capable of certain use or yet further, the land's purposing by its current owner) and which is not:

  • land set aside for development in a Detailed Zoning Plan, etc; or
  • afforested; or
  • not already developed in certain specified ways.

Subsection 3(4) of the Act expressly permits such agricultural land to be held by foreign nationals and companies pursuant to international treaties to which Bulgaria and the relevant foreign state are parties.

Subsections (5) and (6) of s 3, which was introduced in 2007, at the time of Bulgaria's accession to the EU, contain express reservations for EEA nationals (subs 4) and EEA companies (subs 5): these are expressly allowed to acquire property interests in agricultural land.

Section 3 was amended further in 2014, introducing a number of express restrictions on who can acquire and hold agricultural land. The following have since then been prohibited from acquiring or holding agricultural land:

  • companies whose shareholders are directly or indirectly companies registered in low tax jurisdictions (these are defined elsewhere in Bulgarian law);
  • companies whose shareholders are individuals, other than those in s 3(4) or 3(5), or companies, except those in s 3(4) or (5);
  • joint stock companies with bearer shares.

It follows from the wording of s 3 of the Act that where agricultural land is held by a company which is itself held by another company (whether registered in Bulgaria or another EEA member state), such land can be lawfully held by this structure as long as its shareholders are either:

  • individuals; 
  • any company, as long as that company is not registered in one of the listed low-tax jurisdictions.

While subsections 4 to 6 of s 3 appear to be a list of what is permitted, they should not be interpreted as a closed or exhaustive list: s 3 as a whole is a mixture of permissive and restrictive provisions.

A further amendment to the Act in 2014 introduced section 3C (3в in the Cyrillic alphabetical order). Subsection 1 of this sets out a further permissive provision: individuals who have resided in Bulgaria for 5 years or more are permitted to acquire agricultural land, as are legal persons established (in Bulgaria) for a period of 5 years or more.

While at first sight s 3C(1) could be taken as introducing a further filter, an additional requirement, that this is not the correct interpretation becomes clear given that the provision does not distinguish between Bulgarian nationals and foreign nationals.

If s 3C(1) were read as a restriction, the provision would have prohibited Bulgarian nationals who have not been resident in Bulgaria for 5 years or more from acquiring land as much as it would prohibit foreigners (including the EEA foreign nationals who are otherwise permitted). Such a restriction would be a violation of Bulgarian nationals’ constitutional right to property by imposing an unwarranted requirement of residence as a pre-condition to holding certain types of property and a violation of Bulgaria’s EU obligations by introducing a discriminatory provision and/or a provision impeding freedom of movement of labour, capital and of establishment (which are otherwise protected). Read as a provision that enables some otherwise restricted non-nationals to acquire land after a qualifying residence period, the provision makes good sense.

In conclusion, excluding any assistance that non-nationals may derive under international treaties, the following are restricted from holding Bulgarian agricultural land under OUALA 1992:

  • Companies whose shareholders are directly or indirectly companies registered in “low tax” jurisdictions (s 3(7)(1));
  • Bulgarian-registered companies whose direct shareholders are nationals of non-EEA countries, unless they meet the proviso of having resided in Bulgaria for 5 years at the material time;
  • Non-EEA nationals directly (unless they have resided in Bulgaria for more than 5 years);
  • Companies which have issued bearer shares.

For further information, please contact us. We will explore your individual case in detail and provide you with tailored legal advice.



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€200,000 commercial dispute between Genzyme and a Bulgarian hospital supplier

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