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Company Formation Bulgaria

Updated on Monday 14th January 2019

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Foreign investors looking for development opportunities can explore those offered by Bulgaria, a country that can be seen as an ideal destination due to its low-cost and skilled workforce, pro-investment economy and taxation system. If all conditions for opening a company are met, the incorporation process may turn out very simple for investors wanting to expand their businesses in Bulgaria. 
Our offshore company formation agents in Bulgaria can help foreign investors handle the entire company formation phase, with no mandatory requirement to be present in the country at all times.

Steps for company formation in Bulgaria presented by our experts in European and offshore company formation matters

The general company registration procedure in Bulgaria includes the following steps:
  • choosing the type of business structure;
  • choosing a company name and making the reservation;
  • drawing up the Articles of Association for the company;
  • depositing the company’s minimum share capital;
  • submitting the application form for registration with the Commercial Register;
  • registering for tax purposes and for social security purposes (hiring employees);
  • obtaining any needed special permits and licenses.
When establishing a company in Bulgaria, the first step a shareholder or shareholders must take is to choose three names for the new company and submit them for approval with the Companies Register. An application form stating the shareholding structure of the company and the business activities must be filled, also upon company formation in Bulgaria. Additionally, the client must provide identification documents, a recent utility bill that states the residential address of the shareholder, the articles of association, the certificate of incorporation and a certificate of good standing.
If the procedure will be completed by a representative of the owner of a company, a power of attorney will be required. The power of attorney must be notarized and contain the apostil. Together with all the required documents, the representative may then submit the application for registration with the Company Registration Office and set up a bank account. After the registration, documents are issued and the company will be fully legal and ready to operate. For the registration process, the client will also need a company name uniqueness certificate, the statement for taxes that have been paid and the tax for publishing in the State Gazette.
The third and last step for company formation in Bulgaria is submitting an application form to the National Revenue Agency for VAT registration. Together with the application, an agreement of association of the company, a bank account statement or the documents stating the contributions value, the registration document signed by the managerial board or founding members must be submitted as well. 
Certain fees apply when registering a company in Bulgaria and these refer to the registration fee for the Commercial Register as well as the company name reservation free. 
Our experts in European and offshore company formation matters can help you through the entire company registration procedure in Bulgaria.

Requirements for company formation in Bulgaria

Any person - no matter his or her nationality or residency - can be a director or a shareholder in a company in Bulgaria. The shareholders of a Bulgarian company can be natural persons or legal entities and the company must have a local registered office (BridgeWest offers this type of service)
In order to establish a limited liability company in Bulgaria, there is no requirement for a start-up share capital.
Foreign investors in Bulgaria should be informed about the sector-specific requirements when opening a company in the country. These special considerations will generally refer to applying for and operating under special permits and licenses.
The fields of electrical engineering and electronics, information technology, the chemical industry or the food and agriculture sectors are examples of business fields that require additional licensing, apart from the general company registration steps described above. For example, investors who wish to open a company in the food sector will enter a dynamic business field that offers multiple opportunities but will be required to observe the special requirements set forth by the Food Safety Directorate.
Services provided for company incorporation in Bulgaria
Our team of offshore company setup agents can help foreign investors start a business in Bulgaria. Our incorporation packages include a set of services, among which we mention the following:
  • drawing up the articles of association for company formation in Bulgaria: this can be accomplished through a power of attorney (Bulgarian laws require power of attorney for any public notary proceedings);
  • drawing up documents for company incorporation in Bulgaria: specimen signatures, identification papers copies, application form required by the Company Registration Office;
  • arranging public notary proceedings: all procedures for company incorporation are done in front of a Bulgarian public notary;
  • setting up a registered office in Bulgaria on demand: the registered office serves as headquarters for the company in Bulgaria and it will be made public;
  • setting up a bank account for the company in Bulgaria: our BridgeWest agents will help you deposit the share capital with a Bulgarian bank as well as open a corporate bank account once the company is incorporated.
  • post-registration services: recommending a Bulgarian accountant, as accounting services are needed for new businesses in Bulgaria.
BridgeWest is also able to offer ready-made Bulgarian companies and VAT registration.
Investors who open a company in Bulgaria can choose between the following business forms:
  • the LLC, the Bulgarian equivalent of the limited liability company - it requires at least one shareholder and a director and it must have a registered office. The minimum share capital for this business form is very low, at approximately only one Euro, in shares of no less than one Bulgarian Lev each. It is important to note that this business form does not have tradable shares; their transfer is possible through a notary agreement but they may not be offered to the general public.
  • the joint-stock company: with at least two shareholders and it must have a registered office. The minimum share capital for this type of company is 50,000 BGN. Minimum 25% of the start-up capital must be paid upon incorporation and the requirements for the minimum capital can be higher in certain business sectors, such as banking or insurance. 
  • the branch, subsidiary or representative office: Our Bulgarian offshore incorporation agents can help you set up branch offices, subsidiaries or representative offices for any type of foreign company.
There are important differences between these forms of organization for foreign entities, and it is advisable to talk to one of our agents when choosing the preferred one. In summary, these are:
  • the branch is an extension of the foreign company, it performs the same business activities and the foreign legal entity is liable for the branch’s debts and obligations in Bulgaria.  
  • the subsidiary is the same as a locally registered company, it can engage in the same business activities as the parent company and/or in other ones and the foreign legal entity owns shares in it but it is not liable for its Bulgarian subsidiary.
  • the representative office is only suitable for marketing or promotional activities on the Bulgarian market as it cannot be used to derive any type of profits or engage in commercial activities.

Bulgaria key facts

The tax regime in Bulgaria is one that is perceived as very advantageous for investors as the country has one of the lowest corporate income tax rates in Europe. This, coupled with the fact that the costs for managing a business and hiring employees are lower than in other Eastern European countries, represent two of the primary reasons why Bulgaria is considered an attractive business destination.
The main tax facts for companies in Bulgaria are:
  • the corporate tax in Bulgaria is 10%;
  • the Bulgarian standard VAT rate is set at 20%, but a 9% rate is applied to tourism facilities;
  • the dividend tax in Bulgaria is 5% and dividends paid to countries in the European Union are exempt from this tax.
  • the real property tax has varying values, between 0.01% and 0.45% for non-residential properties; the transfer tax is between 0.1% and 3% and it applies to the sale or exchange of immovable property as well as motor vehicles (imposed on a municipal level).
  • the social security contributions are between 18.92%-19.62% for the employer and they are based on the total income, with a cap at 2,600 BGN/month.

As far as tax compliance for companies is concerned, the tax year is the same as the calendar year and the tax returns as well as the final tax payments are due at the end of March, the year following the year of assessment. Companies are required to make advance payments, either or a monthly or quarterly basis, based on their taxable income recorded in the previous year.

Foreign investments in Bulgaria are welcomed and entrepreneurs from EU or non-EU countries have the same right to open a company and manage it as nationals. For those interested in obtaining permanent residency status, Bulgaria had a policy that targets those individuals who make investments of over 1 million BGN. 

An alternative to starting a company in Bulgaria is the option of acquiring an existing business or merging two business entities.

Our team of offshore company formation agents in Bulgaria can give foreign investors complete guidance during the course of company registration and further assistance and advice on running a business.

Please contact our consultants in European and offshore company setup matters for more information and prices when by opening a company in Bulgaria. If you need legal services in Bulgaria, you may set up an appointment with our local lawyers. 


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