Many expats come to Bulgaria with the idea to start a new business or move the one that they have in their home country and take advantage of the favorable tax (10% corporate tax) and business climate for a Bulgarian company formation.
Bulgaria has a simplified process of registering companies for foreign businesses. Note that you can register a company here from another country without necessarily coming to Bulgaria. This can be done through the power of attorney.
it’s important to note that foreigners face legal restrictions on buying land in Bulgaria. However, these restrictions do not apply to foreign firms. On the contrary, foreign firms can buy and own land in Bulgaria without any legal restrictions. With respect to company operations, the firm does not incur any cost after its registration unless it is operational.
Before you start the registration procedure you will need to think about these requirements:
- Your company must have an address in Bulgaria;
- Your company needs to have initial company capital which has to be deposited in a local bank;
- You must choose a name and scope of activity for your company.
Very important: Choose your Legal Business Form
There are several options that can be chosen as the most common of them are, this decision will affect the way you do business, and how you can operate your company, your company liability:
- “Single person Limited Liability Company ” (EOOD) – an entity with one single owner with limited responsibility
- “Private Limited Liability Company” (OOD)– owned by two or more partners with limited responsibility
- “Sole Owner” (ET) – a simplified entity form which is appropriate for very small ventures (full owner’s responsibility)
- “Freelance” – a personalized individual registration
- “Public Limited Company” (AD) – joint-stock company – a commercial company with share capital owned by its members
- “Branch in Bulgaria” – Foreign legal entities registered abroad can register a branch in Bulgaria
Step 1: Name of the Company
You must pick a name of the company which will identify your venture on the market as well as before government institutions. Certain name parameters must be taken into account. The name itself could be chosen and occupied prior to the entire registration process (the latter is not compulsory but could represent a useful move in some cases).
Step 2: Escrow Bank Account Registration
You will be required to register a special escrow account in some Bulgarian bank for the purposes of the entity’s equity and legal registration. The initial bank account registration is a mandatory step according to the Bulgarian rules and regulations.
Step 3: Business Address Registration
The address registration is the next mandatory step in the process of your company’s setup. Your company will need to have a Bulgarian address.
Step 4: Registration in the Government Official Register
According to Bulgarian laws, every new business venture must be registered in the publicly available Official Commercial Register.
Step 5: Stamp Registration
Each newly registered business venture need an official stamp that can be used for endorsement of its formal activities. Despite being an additional after-registration step, the stamp registration has basically an obligatory function for the business set up in Bulgaria.
The procedure for registration of a company in Bulgaria does not differ when local or foreign persons are part or owners of the company.
Under Bulgarian law there are no restrictions as to the size of the foreign participation in the capital of a Bulgarian company and, therefore, up to 100% of the registered capital of a local company can be held by foreign persons.
The minimum capital to register a limited liability company in Bulgaria is 2 BGN (1 EUR), and it usually takes up to 2 weeks only to register the company.
It is essential to note that Bulgarian corporate laws do not discriminate against foreign firms. In line with this, a foreigner who registers a company Bulgaria enjoys the same privileges and is subjected to the same corporate terms as that of locally-owned companies.
Do your homework before you choose a consultant to help you register your company, and don’t forget to ask for references of their work and services.
