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Company Formation in Bulgaria. Main aspects to consider

How to register a company in Bulgaria?

Last several years, Bulgaria proved to be a desirable hub for foreign business owners and entrepreneurs. The country has seen a rise in company registrations within different economic sectors. 

Bulgaria offers good opportunities for lots of sectors. IT companies, transport and industrial businesses, manufacturers, telecommunication centres find the environment perspective. Bulgaria sets itself as a favoured investment destination. It is a developing market with low tax rates on the income and affordable accounting services. Bulgaria has easy access to the European market and expert professionals at hand.

If you also explore the possibility of opening a business in Bulgaria, this article will give you a basic idea about the company registration procedures and possibilities.

Who can register a company in Bulgaria?

Anyone who has 18 years of age can register a company in Bulgaria. Under Bulgarian law, there are no restrictions concerning once nationality. A foreign company may register its Bulgarian subsidiary. Thus the foreign equity participation in a Bulgarian company can be up to 100%. 

What are the possible corporate entities?

There are several options you can choose from when opening a business in Bulgaria. Under the Bulgarian law, you can open a company under one of the following forms of legal entities:

  • Limited liability company
  • Joint-stock company
  • General partnership
  • Limited partnership and
  • Partnership limited by shares

In this article, we will cover only two of those legal corporate forms. They proved to be popular among foreign investors. Businesses often display their products or services in Bulgaria through these corporate entities. They might as well be the best option for your needs, too.

Limited Liability Company or Sole-owner Limited Liability Company

This is suitable business entity for both small to medium investors and large companies for the required minimum of BGN 2 capital. The shareholders in LLC have limited liability to the amount of the registered capital. The corporate governance structure is fairly simple. It comprises a general meeting of shareholders and manager/s who represent it before third parties.

The fee for registering a limited liability company is BGN 110 BGN. If you or your lawyer submit the documents electronically, the fee is BGN 55. To reserve the name of your company, you must pay a fee of BGN 40 or BGN 20 if you send the application online. The responsible authority before which you should apply for registration is the Commercial Register.

Joint-Stock Company

The formation of a joint-stock company requires a registration capital of BGN 50,000. At least 25% of the capital has to be paid-in at the moment of registration. The joint-stock Company is more popular among large foreign investors. 

There are no regulations on transferring shares for joint-stock companies in Bulgaria. With joint-stock companies, the legal personality is separate from the shareholders, so there is no actual ownership. A shareholder can transfer or sell his company stock without an effect on the continued existence of the company. 

The fees for the registration of the joint-stock company are higher:  BGN 360 filed on paper or BGN 180 BGN if filed electronically. 

If your joint-stock company will provide bank or insurance services, the fees will be respectively BGN 1300 BGN or BGN 650 for online registration. The tax for a company name reservation is the same as for the LLC: BGN 40 or BGN 20 (for online reservation). 

What necessary legal steps should you take to open a company in Bulgaria?

The overall process of registering a Bulgarian company is not complicated. 

There are certain documents that you must file with the Commercial Register. You will need a Bulgarian bank account and a legal address. A legal practitioner or a law firm may help you with the documents. Some of the documents shall be verified by a notary public. 

The first thing to do is to confirm with the Commercial Register if your company’s name is free. Note that you can register a company in Bulgaria only with a name in Cyrillic. You can add a Latin name, but the Cyrillic one is obligatory. 

The following necessary steps are the same for both LLC and Joint-stock companies: the executives should hold a Meeting of Incorporation and deposit the company capital into a special capital raising account. If your business provides specific products or services in Bulgaria, you might need authorisation by the competent authority.

What possibilities do you have if you are not in Bulgaria?

If you are not present in Bulgaria, you can go to a Bulgarian embassy or consulate and authorise a third party to deposit the capital on your behalf. To do this, you must sign a power of attorney. You can sign the document before a notary or in the embassy/consulate. Depending on the country, if you sign the power of attorney before a notary, the document will require an apostille. 

Note that when certifying the power of attorney you have to certify the specimen of the signature of the director as well (its notarization is obligatory). 

Another important thing to remember is that you can grant the opening of a bank account to any thrusted person. It is not the same as with the power of attorney for company registration. You can authorise only a lawyer.

How long would it take to register a company in Bulgaria?

Typically, the company formation in Bulgaria takes up to three business days after the responsible legal body receives the application. 

If you look forward to starting a business in Bulgaria and need legal assistance, we will be happy to help you. Our team of legal experts has comprehensive experience in a wide variety of areas and we can assist you on the company incorporation. Read more about our services and contact us.

13 November 2019