Registration of companies in Bulgaria

Bulgaria is a Balkan nation with diverse terrain encompassing the Black Sea coastline, a mountainous interior, and rivers, including the Danube. A cultural melting pot with Greek, Slavic, Ottoman, and Persian influences, it has a rich heritage of traditional dance, music, costumes, and crafts

Bulgaria is a developing country, with an upper-middle-income economy, ranking 56th in the Human Development Index. Its market economy is part of the European Single Market and is largely based on services, followed by industry—especially machine building and mining—and agriculture. Widespread corruption is a major socioeconomic issue; Bulgaria ranked as the most corrupt country in the European Union in 2018. The country also faces a demographic crisis, with its population shrinking annually since around 1990; it currently numbers roughly seven million, down from a peak of nearly nine million in 1988. Bulgaria is a member of the European Union, NATO, the Council of Europe; it is also a founding member of the OSCE and has taken a seat on the United Nations Security Council three times.

The incorporation of a company means the registration of a legal entity in the Commercial Register of Bulgaria. Every foreigner can form a Bulgarian company, regardless of the fact having or not a Bulgarian visa or a Bulgarian residency permit. The most common type of commercial company is Ltd. Minimum founding capital required to register is 2 BGN (Bulgarian Leva). One or more people can be the Directors/Managers of the company and it has to have the legal address of Bulgaria. The process for registration normally takes 3 working days after the completion and receipt of all the necessary documents. The income tax rate in Bulgaria is 10% flat (paid for the profit only) for every commercial company, regardless of the amount of the profit which is lowest in all EU countries. Opening a company in Bulgaria not only allows you to engage in any commercial activity but also to purchase a vehicle and real estate.

What are the advantages of opening a company in Bulgaria?

• Engaging in commercial activities and working as a manager without obtaining a work permit;
• Purchase of land (in Bulgaria it is forbidden to purchase land for foreign citizens);
• Car registration for the company (foreign cars are registered only in Sofia with obligatory annual re-registration);
• Obtaining credits, mortgage loans for a company with interest rates significantly lower than for foreign citizens;
• Purchase of transport, equipment, real estate in leasing;
• Obtaining a business visa to Bulgaria.

REQUIRED INFORMATION

The following information is needed for the preparation of documents for a Limited liability company incorporation:

♦ Company name;
♦ Legal address/or we can provide a virtual office address;
♦ Company email address;
♦ Capital & shares distribution;
♦ Shareholders' details (company owner). In case the shareholder is a foreign legal entity, a certificate of good standing is required with a recent date of issuance;
♦ Company director details;
♦ Scope of activity (including in most of the cases any activity allowed by law);

Forms of ownership of enterprises in Bulgaria:

1.Participants / Entities SP (sole partnership) и LLC

LLC can be created by two or more Bulgarian or foreign individuals or legal entities.

SP is created by one individual or legal entity, which is the sole owner of the capital.

How do we work?

The order of opening a company in Bulgaria:

1. Holding of the constituent assembly
2. The signing of a friendly treaty (constituent instrument)
3. Appointment of the manager (director)
4. The authorized capital of the company
5. Submitting an application to a commercial (commercial) register

The company is registered on the basis of application A4. The application is submitted personally by the manager (director) or a person authorized by him - a lawyer with the authority to register a firm or a person with a notarized power of attorney to register.

After receiving the documents, you are given an incoming number, under which the application is registered. By this number, you need to monitor the status of processing documents on the site of the trade register. If errors are found during the processing, the corresponding information will appear on the site and 48 hours will be given to correct the errors. The company registration period is approximately 5 days.

2. joint-stock company in Bulgaria?

 A joint-stock company in Bulgaria (AD) is a type of company designed for major businesses and must be incorporated by at least two individuals or corporate bodies. The name of the company must be unique and followed by the termination AD. Unlike the limited liability company, this entity must provide a minimum share capital of EUR 25,000 (for a closed joint-stock company) or EUR 50,000 (for an open joint-stock company) divided into shares with a nominal value of EUR 50. At the base of each joint-stock company, sits the by-laws of the company, containing the name and the registered address of the company, its purposes, details regarding the capital stock and shares, the name of the advantaged members and type of advantages, the modality of appointing the board of directors and the supervisory board, transforming or liquidating the entity. The main difference between the closed Bulgarian AD and the open Bulgarian AD is that only the shares of the last one can be traded at the stock market.

3. Sole traders in Bulgaria

 A single entrepreneur can register a Bulgarian sole proprietorship. The entrepreneur is fully liable for the company’s debts and can benefit from the full profits of it. There is no minimum share capital required for this type of business incorporated in Bulgaria and, in case of liquidation, the owner doesn’t have separated liability from his/her business and his personal assets may be affected by this process. 

How can I register a branch in Bulgaria?

 Foreign investors who want to establish a branch in Bulgaria need to respect the rules and regulations of the Bulgarian Registry Agency and must appoint a representative agent or an attorney for the registration process and for documents preparation. The parent company must provide a series of documents for company formation in Bulgaria, among which:

• the certificate of incorporation with the name of the owners and details about the activities;

• a few bank statements offering complete financial information and details about the accounts;

• the decision of opening a branch issued by the foreign company;

• the certificate of good standing with information about the future operations in Bulgaria.

 When establishing a branch in Bulgaria, we suggest you talk to our team of company incorporation agents in Bulgaria for assistance in the registration procedure.

COMPANY FORMATION DOCUMENTS

A Limited liability company formation ("OOD" in Bulgaria -equivalent to LLC., Ltd./SARL) includes preparation of the following documents

♦ notarization of consent by the company Director and signing company incorporation documents by the shareholders/single owner.
♦ in case a company is incorporated by authorization the documents can be notarized at a Bulgarian consulate or at a Notary Public /with an apostille/ .
♦ depositing the company capital in a bank account /the minimum capital of a Limited company is 1 Euro/;
♦ signed protocol of the decision about company incorporation and a company Foundation Act;
♦ a statutory declaration by the company Director;

How can I open a bank account in Bulgaria?

 The requirements for opening a bank account in Bulgaria differ from an institution to another, but in most cases, it respects the main requirements and conditions. In this sense, the Articles of Association, the company’s main documents, the certificate of company registration, and the specimen signatures are necessary at the time of opening a bank account. One must also observe the bank applications and forms for opening an account that will be connected to the financial activities of your firm.

Economy overview in Bulgaria

 Situated in the center of the Balkan Peninsula, on the road between Europe and Asia, Bulgaria has a lot of advantages to offer to foreign and local investors. The main developed sector is the service sector represented by tourism, Bulgaria being an attractive holiday destination due to its advantageous prices and beautiful landscapes.    The population is highly educated, English speaker, this leading to a reputable workforce. The major advantages granted by the Bulgarian government are the taxation system, one of the lowest from EU, with a profit tax of only 10% and the small withholding taxes on dividends paid to non–residents of 5% and withholding taxes on interests paid to non-residents up to 10%. All the above can be minimized or even exempt by the vast network of double taxation treaties signed by Bulgaria so far.

Bulgarian Business Visa through company formation in Bulgaria:

If you are a non-EU national and you would like to obtain a short-stay Bulgarian Business visa, you are NOT required to employ local citizens. You may order our Bulgarian Business Immigration Package:

1. Registration of a Bulgarian limited company.
2. Invitation short-stay visa.