Opening a guest house, family hotel and Airbnb in Bulgaria

At Accounting firm “Elan Consulting”, we understand the challenges entrepreneurs and business owners face when starting and running a guest house, family hotel or Airbnb. Investing in a guest house it may turn out an exciting and profitable venture, but also requires detailed planning and compliance with a number of regulatory and legal requirements.

The key to successis not only in developing a unique offer for guests, but also in Navigating the process of registration, categorization and taxation. Many of you are asking “How do I open a guest house?”or “What are the requirements and documents for the categorization of my guest house?”. In this regard, important aspects such as the registration of a guest house in the RZI (Regional Health Inspectorate), patent tax, as well as registering guests in a hotel, are critical stages that must be carefully overcome.

Country housesare of particular interest in view of the growing trend of buying up rural propertiesand the creation of unique tourist experiences that attract guests from all over Bulgaria and abroad. The guest house businessrequires an understanding not only of market needs, but also of the legal framework, including The Tourism Actand related regulatory documents.

We, from Elan Consulting, we offer a full range of accounting and consulting services, aimed at businesses in the field of tourism and hospitality in Burgas, Sofia and the whole of Bulgaria. Our mission is to support your business by providing compliance with all regulatory requirementsand help you Maximize your profitwhile reducing the associated risks and complexity.

As your partners, we will assist you in the preparation and submission of the necessary documents for categorization, as well as in the preparation of tax and insurance returns, the management of your accounting books, and we will provide you with valuable advice on Effective tax planning and optimization.

How can accounting house Elan Consulting help me with accounting and categorization of guest house, family hotel and Airbnb?

In the dynamic world of tourism, accounting for guest houses, family hotels and Airbnb requires attention to detail and an understanding of the unique needs of each business. Elan Consulting offers a personalized approach in which each client receives individual attention and solutions tailored to their specific needs and goals. This flexibility is crucial for the successful management of the financial and accounting aspects of a business, especially in the field of tourism, where seasonality and changing trends can significantly affect income and expenses.

Elan Consulting understands the specifics of the tourism sector and offers competent advice and support in dealing with various regulatory and operational challenges. This includes in-depth knowledge of the regulations related to the categorization and management of guest houses, family hotels and Airbnb. This knowledge is important because any change in legislation or regulations can have a significant impact on the way these businesses operate and report on their finances.

The company offers a comprehensive accounting service that allows owners of tourist sites to focus on the development of their business, while accounting and tax obligations are managed by experienced professionals. This includes the preparation of financial statements, tax management, cost optimization consulting and effective revenue management. This is especially valuable in the tourism sector, where financial flows are often unpredictable and seasonally conditioned.

Support in the process of categorization of tourist sites is another key service that Elan Consulting provides. The categorization process can be complex and time-consuming, requiring an understanding of the specific requirements and the preparation of the necessary documentation. Elan Consulting helps owners navigate this process, ensuring that their properties meet all regulatory requirements and receive the appropriate categorization that meets quality and service standards.

Personalized approach:Elan Consulting offers a personalized approach to each client, understanding the specifics of each guest house, family hotel and Airbnb business. This individualized approach is fundamental to providing the most appropriate and effective accounting solutions that meet the specific needs and objectives of each business.‍

In-depth knowledge of the industry:The Elan Consulting team has in-depth knowledge of the tourism sector, including regulations related to the categorization and management of guest houses, family hotels and Airbnb. This allows the firm to offer competent advice and support in dealing with a variety of regulatory and operational challenges.‍

Comprehensive accounting services:Elan Consulting offers a comprehensive accounting service that covers all aspects of financial management - from the preparation of financial statements and tax management, to consulting for cost optimization and effective revenue management.

Help with categorization of accommodation, including categorization of guest house and family hotel:The company provides support in the process of categorization of tourist sites, helping the owners to navigate through the complex requirements and prepare the necessary documentation, in accordance with the legislation on tourism in Bulgaria.‍

Regulatory Compliance Tips:Elan Consulting provides valuable advice and guidance on compliance with all regulations and requirements, which are particularly important for maintaining the legality and reputation of the business in the field of tourism.

Support in tax and accounting matters:The company offers specialized support in tax and accounting planning, which is essential to optimize financial results and avoid tax problems.

Choosing Elan Consulting as an accounting partner means that clients receive not only quality accounting services, but also valuable advice on compliance with regulations, which is essential for the successful management of tourist sites. Support in tax and accounting matters ensures that businesses are able to optimize their financial operations and address any tax challenges.

With its integrated accounting services and specialized knowledge in tourism, Elan Consulting offers its clients the complete confidence that their business is managed efficiently and complies with all legal requirements. This provides peace of mind and an opportunity for tourism site owners to focus on expanding and developing their business, knowing that their accounting partner takes care of everything else.

After all, Elan Consulting's choice for accounting and tax services offers not only professionalism and experience, but also flexibility and adaptability, which are vital in the rapidly changing world of tourism.

What are the features of the accounting of a guest house, family hotel and Airbnb?

The accounting of a guest house, family hotel and Airbnb carries its own specifics that distinguish this business from other types of activities. One of the main aspects that every owner of this type of property faces is the management of seasonality in the activity. It is important to keep track of revenue, which varies with the season, and to manage the costs of maintaining and servicing the property, and this requires careful budgeting and planning.

When managing the finances of a guest house or family hotel, owners have to deal with various challenges, such as keeping track of rental income and reservations, issuing invoices for services provided, and managing expenses related to electricity, water, cleaning and maintenance. In addition, tax management and regulatory compliance are key aspects that must be carefully monitored to avoid fines and legal problems. Thus, owners should be informed about their obligations in terms of VAT, as well as income taxes.

In addition to financial management, guest house owners should also be aware of the specific rules and regulations that apply to their business. This includes familiarization with the Law on Tourism, the Ordinance on the requirements for accommodation and the provisions of the Ministry of Interior regarding the security of tourists. It is also important to regularly submit information to the Unified Tourist Information System (ESTI) and to declare tourist taxes monthly to the municipality.

For Airbnb, the platform provides unique challenges and opportunities. Owners must manage bookings and financial transactions through the platform, while complying with its commissions and conditions. It is important to maintain accurate and detailed records of all transactions, as well as manage guest reviews and ratings, which contributes to the reputation and success of the business.

Categorization of a guest house, cottage, family hotel - to whom does it apply and how is it carried out?

The categorization of accommodations such as guest houses, villas, family hotels and Airbnb is a process that is governed by various regulations and depends on a number of factors, such as the type of property, the number of stars and the authority responsible for the categorization. According to the Tourism Act, accommodation can be classified into different categories depending on the services offered, the location and the period of operation.

According to the regulations, there are two main categories - class A and class B, each of which includes different types of accommodation. Class A includes larger and more prestigious establishments such as hotels, motels and apartment complexes, which are usually categorized by the Minister of Tourism. This includes objects of a higher standard and correspondingly more stars - three, four and five stars. On the other hand, class B includes smaller and family types of accommodation such as family hotels, hostels, boarding houses, guest houses and campsites, which are categorized by the Mayor of the municipality and usually have fewer stars — one, two or three.

Apart from this, the “Class B” category created includes guest rooms and guest apartments, which are often associated with Airbnb. These types of accommodation are more flexible in terms and requirements, often being registered and categorized locally by the municipal expert commission.

The categorization of each of these objects is carried out after evaluating a number of factors, including the amenities offered, quality of service, hospitality, etc. The categorization procedure is mandatory and is governed by specific rules and requirements that must be adhered to by the owners of the accommodation.

Categorization of accommodation places class “A” - hotel, family hotel, motel, apartment tourist complexes, cottage villages, tourist villages and villas

The classification of class “A” accommodation places in Bulgaria includes a number of procedures and steps that are regulated and mandatory for persons who want to carry out hotel or restaurant activities. This process is essential to maintain high standards and quality in the tourism sector. The procedure not only ensures that the objects meet certain requirements, but also gives users a clear idea of the level of services they can expect. In the following paragraphs, we will look at some key aspects of this process. The main steps for the categorization of accommodation class “A” are as follows:

1. Submission of an application-declaration:The person wishing to carry out hotel or restaurant business must submit an application-declaration to the relevant categorizing authority. This application must include information such as the person's name, address, telephone, fax, e-mail, EIC or other data proving the right of the person to carry out activities at the site, the professional and linguistic qualifications of the staff and the manager of the tourist site.
2. Attachment of documents:Copies of the document for the use of the object (if it is rented and not subject to registration) and an express power of attorney, if the application is submitted by a proxy, are attached to the application.
3. Examination and verification of documents:Officials designated by the categorising authority shall examine applications and documents within 14 days from the date of their receipt. If there are any incompleteness or irregularity, the applicant shall be notified and given a 14-day period for their elimination.
4. Opening of a categorization procedure:After establishing that the documents meet the requirements, a proposal is drawn up for the opening of the procedure for categorizing the tourist site and a temporary certificate of the open procedure is issued.
5. Expert Working Group and On-site Inspection:Within the time limit of the provisional certificate, the categorising authority shall designate an expert working group for on-the-spot verification of compliance with the requirements for the category requested.
6. Statement of findings and proposal:After the inspection, a report of findings is drawn up, including all the facts established and a proposal to the relevant ECTHA to determine the type and category of the tourist site.
7. Issuance of a certificate:On the basis of the proposal, the categorizing authority issues an order to determine the type and category of the object and issues the corresponding certificate.

The whole process is strictly regulated and includes clear steps that must be followed by all applicants. This ensures transparency and standardization in the categorization of accommodation places in Bulgaria.

Categorization of accommodation class “B” - family hotels, hostels, boarding houses, holiday resorts, guest houses, bungalows and campsites

The categorization of class “B” accommodations in Bulgaria is a significant process that reflects the country's commitment to quality and standards in tourism. The procedure applied to the different types of establishments, such as family hotels, hostels, boarding houses, resorts, guest houses, bungalows and campsites, is essential to determine the level of services and facilities they can offer to their guests.

The categorization provides clarity and transparency, both for hoteliers and tourists. It enables property owners to identify and highlight the specific features and amenities of their properties, which is important for attracting the right clientele.

The categorization process requires accurate and carefully prepared documents. This includes declarations of the right to exercise the activity, data on the professional and linguistic qualifications of the staff, as well as documents on the right to use the site. The preparation and submission of these documents are critical steps to successfully go through the categorization process.

According to the provisions of the Tourism Act, accommodations class “B” are categorized into the following categories:

• family hotels - “one star”, “two stars” or “three stars”;
• hostels - “one star”, “two stars” or “three stars”;
• boarding houses - “one star” or “two stars”;
• rest stations - “one star”, “two stars” or “three stars”;
• guest houses - “one star”, “two stars” or “three stars”;
• bungalows - “one star”, “two stars” or “three stars”;
• campsites - “one star”, “two stars” or “three stars”.

Important! The law distinguishes the procedure in this class, according to the specific type of object - The categorization of guest houses, especially for individuals, differs a lot as a procedure from the categorization of a family hotel, for example.

Necessary documents for categorization of a family hotel

See the necessary documents for categorization of family hotel, hostel, bungalow and camping. The person who will carry out hotel or restaurant business in accommodation and in catering and entertainment establishments, or a person authorized by him, shall submit an application-declaration for categorization to the relevant categorizing authority. The application-declaration must meet the following requirements:

• The name of the person who will carry out the hotel business, as well as the name of the places of accommodation and of the catering and entertainment establishments (in Bulgarian and Latin letters. In the application it is good to enter the telephone/fax and e-mail address of the hotelier, if he has any, but if he does not, otherwise the names of the authorized person and his phone/fax and e-mail address are written.
• the EIC and/or the grounds on which the person is entitled under another law to carry on business, including under the legislation of another Member State of the European Union and of a State party to the Agreement on the European Economic Area, or of the Swiss Confederation;
• Declaration that the person is not in liquidation - for persons who are not traders;
• The professional and linguistic qualifications of the staff at the site in accordance with the other provisions of the ZT.
• Circumstances related to the education or professional qualification, experience in tourism and the language qualification of the manager of the tourist site according to the requirements of the regulation under Art. 121, para. 5 of the Tourism Act
• Evidence that the person has the right to carry out activities in the establishment, indicating individualizing data on the use document according to its type, and where the use document is subject to registration, the act, volume and year and the registry office in which it is registered;
• A copy of the document for the use of the object, representing accommodation, where the object is not owned by the applicant and is not subject to registration;
• Explicit power of attorney when the application-declaration is submitted by a proxy.

Necessary documents for the categorization of a guest house

As we wrote earlier, the categorization of a guest house follows another procedure before the mayor of the respective municipality, by location of the guest house, for which a separate set of documents is required. The person who will carry out accommodation in guest houses, or a person authorized by him, submits to the mayor of the municipality an application-declaration according to the model. The application-declaration must meet the following requirements:

• The name of the person, as well as the name of the places of accommodation in guest rooms, guest apartments or guest houses (in Bulgarian and Latin letters). In the application it is good to enter the telephone/fax and e-mail address of the hotelier, if available, but if not, otherwise the names of the authorized person and his phone/fax and e-mail address are written.

• Evidence that the person has the right to carry out an activity in the establishment, in the event that this person is different from the owner of the site, indicating individualizing data for the use document according to its type, and if it is subject to registration, indicating the act, volume and year and the registry office in which it is registered
• A copy of the document for the use of the object, if it is not your own and not subject to registration
• Explicit power of attorney when the application-declaration is submitted by a proxy

The categorization of accommodation places class “B” in Bulgaria plays a key role in maintaining quality and competitiveness in the tourism sector. Strict requirements and procedures ensure that all sites meet certain standards, which in turn contributes to increasing the confidence and satisfaction of tourists. The successful categorization of these objects not only increases their attractiveness, but also helps the development of the tourism industry in the country.

Categorization of accommodation class “B” - rooms and apartments for guests

The process of registration of rooms and apartments for guests in Bulgaria is structured and regulated according to the Ordinance on the Requirements for Categorized Accommodation and Restaurants and Entertainment. With the introduction of this regulation, new conditions and order for registration of guest rooms and guest apartments are introduced, and they are classified as type of accommodation of class “B”.

Registration of accommodation class “B”is carried out in the cases under Art. 113, para. 2 of the Tourism Act: “Hospitality in guest rooms, guest apartments and guest houses may also be carried out by a person who is not a merchant within the meaning of the Commercial Law, including when they are part of the dwelling occupied by him in a residential building. In these cases, guest rooms and guest apartments, if they are not categorized, are registered under the conditions and in the order determined by the ordinance under Art. 121, para. 5.”

According to the Ordinance on the requirements for categorized accommodation and catering and entertainment establishments, The main condition for the lawful exercise of the activity is that the person who will carry out hospitality in guest rooms and guest apartments, register the object in which he will exercise the activity, beforethe mayor of the municipality at the location of the object.

It is important to note that now there are no restrictions on occupancy of the dwelling or building, while the guest room or apartment is provided to tourists. This means that the owners can live in the same building, while renting out parts of it for tourist purposes, without facing legal obstacles.

To register as such, owners must submit a number of documents to the mayor of the respective municipality. The necessary documents include proof of the right of ownership of the apartment, as well as an application-declaration on a sample, in which the capacity of the object is declared, the identifier of the real estate, information about the person who will carry out the hotel business, and other relevant data.

Of particular importance is the abolition of the obligation to present a document with signatures of more than 50% of the owners in the building to carry out the tourist activity. This greatly facilitates the registration process.

Necessary documents for categorization of apartment/guest rooms

The application-declaration for categorization of accommodation of class B - rooms and apartments for guests contains:

1. The name of the person who will carry out hotel services in a guest room or in a guest apartment (written in Bulgarian and Latin letters);
2. EIC/BULSAT or PIN, or equivalent identifier, where the person is established in a Member State of the European Union or in a country party to the Agreement on the European Economic Area or the Swiss Confederation;
3. Identifier of the real estate, which is registered within the meaning of Art. 26, para. 2 of the Cadastre and Property Register Act;
4. Data on the right of ownership of the apartment in which the guest room/guest apartment is located;
5. Data on the right to carry out hospitality activities in a guest room/guest apartment, where applicable - rental agreement, contract of established right of use or other;
6. Capacity of the site - number of rooms, number of beds.

A copy of the document for the use of the object is attached to the application-declaration, if it is not its own and is not subject to entry in a public register and a power of attorney if the application is submitted by a proxy.

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Within 7 daysfrom the submission of the application-declaration, the mayor of the municipality issues an order for registration and a certificate. In the event of a desire to terminate the hotel business, the corresponding application for termination is submitted. If there are errors or incompleteness in the application, a 3-day period is provided for their elimination.

It is important to note that the owners of guest rooms or apartments carry out tourist activity and are obliged to keep a register of accommodated tourists. This can be done through a centralized information system maintained by the Minister of Tourism or through an information system chosen by the person.

The register should include information about each accommodated tourist, such as names, date of birth, citizenship, passport number and period of residence.