The creation of a real estate agency in Bulgaria is one of the most popular initiatives among entrepreneurs wishing to enter the real estate business. The topic attracts interest with questions such as “How to open a real estate agency in Bulgaria?”, “What are the requirements for a real estate broker license?”, as well as “Are specialized courses for a real estate broker necessary?”. In this regard, the launch of such an activity requires a good awareness of the regulatory framework, administrative procedures and the necessary qualifications to ensure correct and professional customer service.
In this article, we will look at the basic steps for registering a real estate agency, paying attention to the key points - from the requirements for obtaining a license to professional qualification courses. The Elan Consulting team can offer full support to entrepreneurs in Sofia, Burgas, Pomorie, Karnobat, Sunny Beach, Aytos, Nessebar, Sozopol, Primorsko and throughout the country, providing professional advice for every step of the process.
Through this article we will explain all the important aspects that need to be considered in order to create a successful business in the field of real estate in Bulgaria.
In Bulgaria, a special license is not required to carry out activities as a real estate broker or to set up a real estate agency. This is in accordance with the Law on Restriction of Administrative Regulation and Administrative Control over Business Activities, which clearly states that a licensing regime can be introduced only by law and only for activities related to exclusive state ownership or an existing risk to national security, public order, personal rights or the environment (Art. 9, para. 1 of the Law).
On the other hand, the performance of this activity is bound by the requirements of the Commercial Law, which determines the procedures for registering a commercial company or sole trader in the Commercial Register. This includes the provision of documents of legal capacity, if required for the relevant subject of activity, as well as entry in the register of non-profit legal entities, if the activity has such elements.
The Consumer Protection Act also sets out certain requirements for transparency and provision of information that may be applicable to real estate agencies, especially when selling or renting properties, in order to guarantee the rights of customers.
In order to register a real estate company in Bulgaria, you must comply with several basic legal requirements that arise from the Commercial Law, the Accounting Act and other applicable legal acts. We will consider in detail the questions:
According to the Commercial Law, any person who carries out business activities for the purpose of profit must be registered as a trader (Art. 1 of the Commercial Law). An exception is the possibility of freelancing, but real estate brokerage activity is usually considered a commercial activity, since it involves brokerage and a commission basis. Therefore, in order to work as a broker or manage a real estate agency, it is necessary to register a company or register as a sole proprietor (ET).
The types of companies that can be registered are:
The minimum capital for EOOD and LTD is BGN 2, according to Art. 119 of the Commercial Law.
Yes, it is necessary. According to the Accounting Act, every legal entity registered in the Commercial Register is obliged to keep accounts (Art. 2, para. 1 of the Accounting Act). This includes:
If you are registered as an ET, you will have to file a tax return for your income under the Personal Income Tax Act, and if you are a legal entity, you will file a return under the Corporate Income Tax Act.
The legislation does not necessarily require you to have a physical office for your activity, unless you offer services that require it (for example, meetings with clients). The office can be in a physical object or virtual, as long as it is clearly indicated in the company registration (Art. 13, para. 4 of the Commercial Law). The office is often recommended for a real estate agency in order to instill confidence in clients and to have a place for meetings and consultations.
However, if the company is going to be registered for VAT, the presence of an office (including a rental agreement) is absolutely mandatory.
To register a company in the Commercial Register, you must provide:
All documents are filed with the Registry Agency, and registration usually takes up to 5 working days.
Working as a real estate broker in Bulgaria has a number of “thin moments” that require careful planning and a good knowledge of the regulatory framework and practical aspects of the activity. Some of them are:
First, mediation in real estate transactions is often linked to bilateral contracts — one with the landlord or seller and another with the tenant or buyer. An accurate and comprehensive description of the obligations of the broker and the parties is important in order to avoid future disputes. For example, a brokerage contract often provides for exclusivity clauses that can lead to an obligation to pay a commission, even if the transaction takes place without the broker's involvement.
Secondly, when renting, it is imperative to regulate the issue of deposit and consumables. Rental contracts often have a retention deposit clause in case of damage, but determining which damages are “normal wear and tear” and which are not is a potential source of conflict.
Third, the broker must have a clear procedure for screening candidates for tenants or buyers. This includes checks on financial stability, legality of the transaction and condition of the property. Lack of due diligence may result in legal or financial risks for the client.
Fourth, it is important to comply with all requirements for the protection of personal data of customers, according to Regulation (EU) 2016/679 (GDPR). Unlawful processing or disclosure of personal data may result in severe penalties for the agency.
Fifth, the broker's commission must be clearly agreed and documented. In the event of a dispute over the amount due, the presence of a written contract with comprehensively described conditions is essential.
Sixth, market conditions can vary greatly. Brokers need to monitor price trends and provide clients with up-to-date market information to ensure a successful trade.
Seventh, communicating with customers who are not familiar with local laws or market practices is critical. This is especially true for foreign clients who are often not aware of the procedures and regulatory requirements in Bulgaria.
Finally, the specific requirements related to the notarization of real estate transactions must be complied with in order to ensure the legal certainty of the transaction. Failure to properly register with the Registry Agency may result in the invalidity of the transaction.
Working as a broker requires high professionalism, a good knowledge of the laws and attention to detail in order to avoid potential conflicts and legal problems. The Elan Consulting team can provide assistance in drafting and verifying contracts, consulting on regulatory requirements and protecting the interests of brokers and clients.
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The accounting of a real estate agency includes a number of specifics related to the essence of the activity and the regulatory requirements in Bulgaria. Here are the key points to consider when keeping accounting for such an activity:
Firstly, according to the Law on Accounting (Art. 2), every legal entity registered in the Commercial Register is obliged to keep bilateral accounting. For real estate agencies, this means registering and accounting for all financial operations — income from commissions, advertising expenses, rents, salaries, and others.
Secondly, income in the agency is formed mainly by commissions for brokerage in real estate transactions. They are accounted for as current income and must be clearly documented with invoices issued to customers in accordance with the requirements of the VAT Act (art. 113). If the agency is registered under the VAT, it is obliged to charge value added tax (20%) for the services provided.
Thirdly, often agencies incur upfront costs for advertising, organizing viewings, consulting and others. These expenses should be reported as current expenses and not as investments, unless they are fixed assets (e.g. purchase of office equipment or property management software). This is in accordance with the accounting standard for the presentation of current expenses.
Fourth, if the agency manages properties or rentals for which it receives income, it is important to distinguish between brokerage income and rental income. This requires specific accounting treatment, with rents being accounted for as income from another activity.
Fifth, often agencies work with deposits held by clients (for example, when renting). These deposits are not treated as income, but as a liability in the agency's balance sheet, which is settled upon performance of the contract.
Sixth, salaries and staff allowances are an essential element in the expenditure part. All social and health insurance obligations must be calculated and transferred to the NRA within the deadlines specified in the Social Security Code.
Seventh, agencies are often engaged in advertising of objects, which entails significant marketing costs. These costs should be documented by invoices and treated as current expenses, which is in accordance with the National Accounting Standard (NSA) 2 — “Presentation of Expenses”.
Eighth, for accounting to be transparent and efficient, real estate agencies need to use specialized accounting software that allows easy management of customer data, transactions, and contracts. The software must also be compatible with the requirements for filing reports and declarations to the NRA and other government bodies.
Finally, at the end of each financial year, the agency is obliged to draw up an annual financial statement, which includes a balance sheet, an income statement and other mandatory annexes. If the agency is VAT registered, it must file an annual VAT return.
The tax obligations of a real estate agency in Bulgaria include several key aspects, which are determined by its activity and the legal and organizational form of registration. Here is a detailed explanation:
If the agency is registered as a commercial company (for example, EOOD or LTD), it is obliged to pay corporate tax in the amount of 10% on profits, according to Art. 20 of the Corporate Income Tax Act (CPA). Profit is defined as the difference between income and expenses reported under the Accounting Act.
If the agency is registered as a sole trader (ET), it owes personal income tax of 15% on taxable income calculated as income minus expenses. Costs can be actually documented or legislated.
If the real estate agency exceeds the turnover of BGN 100,000 within 12 consecutive months, it is obliged to register under the VAT Act (Art. 96, para. 1 of the VAT Act). VAT registered agencies charge VAT (20%) on their commission services and are obliged to submit monthly VAT returns. From 01.01.2025, the VAT registration threshold is increased to BGN 166 000.
If the agency owns real estate, it owes a real estate tax and a household waste fee, under the Local Taxes and Charges Act. The tax is calculated on the tax assessment of the property and is paid to the respective municipality.
The agency is obliged to insure its employees on their gross remuneration. The amount of insurance includes:
If the owner works in the agency without an employment contract (for example as a manager of an EOOD or LTD), he is obliged to insure himself as a self-insured person on the minimum social security income for the country or on a higher income of his choice. Insurance contributions necessarily include:
The Agency is obliged to withhold and transfer in advance the income tax of its employees, which is 10% of the taxable income. This is done together with the insurance, until the 25th of the month.
The agency must submit:
The registration of a company as a real estate agency under VAT (value added tax) is regulated in the VAT Act (VAT) and can be mandatory or voluntary in certain cases. Here are the three main options under the law:
If the company reaches a taxable turnover of BGN 100,000 or more within the last 12 consecutive months, it is obliged to submit an application for VAT registration. Taxable turnover includes all income from taxable supplies, such as commissions for brokerage, property management or other services that the agency offers.
The company must submit an application for registration within 7 days from the end of the month during which the turnover of BGN 100,000 was achieved. If this is not done on time, sanctions follow, including the imposition of a fine and mandatory registration by the NRA. As mentioned above, this threshold is increased to BGN 166 000, as of 01.01.2025.
If the real estate agency receives services from foreign suppliers, such as advertising on international platforms or software services, it is obliged to register for VAT before making the first supply. In this case, registration is required, regardless of the amount of turnover.
However, this registration is specific and the company will be obliged to charge VAT only on services received from abroad through the reverse charge mechanism. This mechanism does not lead to general VAT registration, but is limited to specific services.
The company can register voluntarily for VAT, even if it has not reached a taxable turnover of BGN 100,000. This can be advantageous in cases where the agency's clients are primarily VAT-registered legal entities that could recover the tax charged. Voluntary registration can also provide a competitive advantage and the possibility of recovering VAT on the company's expenses.
Voluntary registrants must comply with all VAT obligations, such as filing tax returns and keeping VAT journals.
