Bulstat - another enemy of the free market in Bulgarian property?
Dnevnik and the Sofia Echo in English, recently publicised a change of the law which will require foreign buyers of land/property in Bulgaria to undergo another registration - this time post-purchase - with the unified national businesses register, Bulstat, since not so long ago a part of the Registrations Executive Agency of the government (www.registry.bg). The Dnevnik article surmised that this is part of a drive for simplification of the process of financial identification for businesses.
On the surface - it all makes sense. The only reason why foreign property buyers are affected is that they are treated presumptively as doing this for investment purposes, if non-resident in Bulgaria (and the presumption is sustained by their non-possession of a Foreigner's Identification Number that comes with residence rights). Freelancers, and self-employed individuals (eg, lawyers in private practice), they need to obtain Bulstat registration. This is right in its impulse of seeing as blurry the lines between different forms of organising business activity and recognising that many property purchases are motivated by business intentions. But it falls on two grounds, one of which is connected with that impulse.
Conceptually, it mistakenly assumes that residence should be the test of motivation. Human agents' actions are more complex than this and they often combine the intention to profit from a property purchase and the intention to derive pleasure from it for instance or to raise one's children on it or to retire to it, albeit for parts of the year. Obtaining Bulgarian residence is a costly in time, effort and money and may not be available to all foreigners who've acquired property (it certainly appears not to be intended to be available in this way, if the Aliens Act is read on its face)). As Bulgarians receive their IDs without fail, but also sometimes buy properties for pure gain, the provision is discriminatory and unfair.
Practically, it is defeated by the way that the reform is implemented - through the imposition of another inconvenience. Regulation is never uncostly, but one which needs to be performed at the regional office in person is too costly to leave any gain. The regulators in this case should have foreseen.
As it is meant as a procedure that is part of the drive for simplifying dealings with government and is it part of a new generation of government services, one would expect registration to be possible either by post or electronically or at least to be doable at any Bulstat office.
The only ray of hope is the bit in the Sofia Echo that from September, the registration will be available through the Registration Agency. If this implies the availability of the customer-friendly remote/universal methods of registration, it may make the new layer of red tape just about worthwhile.
