BANKING IN BULGARIA
A comprehensive introduction to Banking in Bulgaria!
A comprehensive introduction to Banking in Bulgaria!
Upon your arrival in Bulgaria you will need a bank account for organizing your finances, therefore a comprehensive introduction on Banking in Bulgaria. Most services are connected to the Bulgarian bank system and especially for payments such as social security, taxes or utility bills a bank account proves the easiest way to handle these payments. Here we have some practical tips for you for banking in Bulgaria.
You will find branches of both national and international banking institutes are omnipresent in Bulgaria. All banks are regulated by the Bulgarian National Bank. All banks handle in both Leva’s and Euro’s. many expats prefer to open an account with international banks, eg. Unicredit (Italian), Raifeissen (Austrian) or Sociéte Général (French). Bulgarian banks are held to the same banking regulations, however we have seen Bulgarian banks (purposely) fail in the past. For your account, ask around what other people have and shop around. You will find different banks offer different services and prices and most of the rates are quite high seen over a full year.
> Any bank is fine for personal banking as all banks are connected to national payment systems
> Bring your Bulgarian ID card and your Passport or ID Card
> Get internet banking
> Bring a salary statement (for your employer)
> If you open a business account, bring extra the company registration papers and a minimum deposit of BGN 1 (opening fees apply)
Leva or Euro Account?
Typically a bank will open 2 Leva personal accounts for you: 1 main account and 1 card account. It is not strictly necessary to open a Euro account, but beware many foreign banks do not accept transfers in Leva. So if your intention is to send money abroad a Euro account can be practical. An extra account will be added to your main account and usually does not cost any extra fee.
Business accounts are structured similar to personal accounts, but beware that fees are high and it deserves your attention to find out which bank and fees work best for your business activity.
Bulgaria is a cash country, in spite of recent reforms with easier electronic payment facilities. The easiest way to get cash is from an ATM. Ask for your limits for single and daily withdraws. Most cards have a limit (eg. BGN 400 max for a single withdraw) that is eg. lower than your monthly rent, which means you have to take out cash more often. You will find often that ATM’s are out of service. ATM’s are maintained by external service providers, so a complaint at the desk will only be redirected, in the end nobody helps you and nothing happens. Beware that banks still charge you for taking out cash from ATM’s from other banks. It is helpful to inform yourself about this, some banks charge a lot for this transactions.
You can also take out cash from the desk inside. In most cases your card and pin number will not suffice and you are required to present your ID instead. Even if you are dealing with a bank, do not be surprised if eg. you withdraw BGN 1000 in cash and they give you stacks of 2 Leva notes.
Many expats are interested in costs of international transfers. Let us say first that all banks provide these, note that the rates are very different at different banks. Also be aware that many foreign/receiving banks do not accept BGN transfers. Your transfer will just be returned in your account minus the transfer fee. Many expats resort to external providers such as Transferwise or Moneygram.
In the first period of your stay in Bulgaria you can get a Visa or Master Debit Card which will permit you all local payments, online purchasing and opening eg. a PayPal Account. A Credit Card can be applied for by people who have at least a permanent residence (5+ years in Bulgaria) or with some banks if you present a credit history from your home country. Credit repayments run automatically in the next month. Should you wish to spread your repayments, get in touch with a client adviser for an alternative repayment scheme. Make sure to not miss the minimum due payment and avoid interest by repaying outstanding balances in time.
Internet banking enables you to organize your payments, transfers and account information at home. All banks offer internet banking and most banks have an application for smartphones/tablets. Online banking applications are usually also available in English. For basic operations internet banking is pretty much plug and play. You might need to set up your account together with the help desk. This proves useful is many cases, just to be sure your set up is correct. For payments, utility payments and payments to budget (eg. social security payments for business owners) you may need an Electronic Signature Certificate.
The Electronic Signature Certificate is useful for making payments for utility, insurance or taxes. This requires some extra effort and installations, but it will save you a lot of hassle afterwards. The Certificate is attributed to 1 PC/IP address. This set up permits you to make many payments directly through the application of the bank. Institutions and utility companies upload your payments directly in your bank application.
In your internet banking application you can select Taxes/Utilities Payment, enter your NRA number and the application will inform you of outstanding bills and taxes. Ask you bank contact for more information to make sure the process is well executed.
As a private person or single business owner you can make most payments from your internet banking application. For more complicated payment structures seek advise from an adviser at your bank.
Note: Usually banks have English language for applications and English speaking Client advisers, for example to assist you to set up the Electronic Signature Certificate.
It must be noted up front, that while getting a loan is still possible, banks are more reluctant towards foreigners and installed policies where Bulgarian citizens need to co-sign for loans.
For any loan request: take your time and you can even bring lunch if needed. It takes a long time to sign all the required paperwork. We even know of people spending over an hour just signing documents.
Consumer Credit/Loans: Consumer Loans for up to BGN 30.000 can be obtained fairly easy provided you have a Bulgarian income. It goes without saying that a longer employment history will contribute to your possibilities. For this type of loan background checks are usually limited to your payment and credit history in Bulgaria. Interest rates differ from bank to bank, but beware that interest for these type of loans is high 7% – 9,5%. The payback period for consumer credit is customizable with obviously higher rates for longer payback periods. Always ask your loan provider for the conditions.
Mortgage: A mortgage or house loan is more difficult to get, but not impossible. Banks require a indefinite residency and a steady income situation. Banks give up to 90% of the property value in mortgage. This will require an income situation in Bulgaria, credit history investigation of your home country and the property needs to be in Bulgaria. Expats are usually required to have permanent residence in Bulgaria to qualify for a mortgage loan. Note: Since a few years natural persons from all countries are allowed to buy property in Bulgaria.
Business Loans: Business loans are available for profitable Bulgarian registered companies. As business loans are specific to the business activity and situation, it is always advised to seek advise with a business loan officer from your bank. It is always wise to shop around for a loan and compare different conditions. It is said that at the moment DSK is favorable to grant business loans.