Conversion of Share Capital Into Euro – Legal Assistance

How Does a Conversion of Share Capital into Euro Occur?

With the approaching introduction of the euro in the Republic of Bulgaria, an increasing number of company owners and managers are asking how this fundamental change will affect their companies’ capital, internal relations, and obligations towards state institutions. The conversion of share capital is not merely a formal accounting operation – it has clearly defined legal consequences and requires timely action by businesses, similar to other key corporate processes discussed in the analysis How To Close Company in Bulgaria (Liquidation Procedure).

Lack of awareness of the rules or underestimation of the deadlines may lead to sanctions, refusals of registration by the Commercial Register, and practical difficulties in transactions involving shares, loans, or investors.

In this comprehensive article we will examine:

• Which companies are required to perform the conversion and which are not affected;
• What happens automatically and which actions remain the responsibility of the companies themselves;
• The legal basis of the process and where it is regulated;
• Specific deadlines, practical examples, and risks of delay;
• How SofiaOffices can assist you with comprehensive legal and administrative support.

1. Is Conversion Required and for Which “Companies”?

Yes – the conversion of share capital is mandatory for all capital commercial companies incorporated and registered under Bulgarian commercial law. It does not matter whether the company is active, has minimal activity, or is temporarily without commercial operations. The obligation applies equally to local and foreign owners, including companies operating through leased offices in various market segments, analyzed in Offices in Sofia Under €13/sq.m: 7 Excellent Choices.

Scope of the Obligation

• Limited Liability Companies (OOD and EOOD);
• Joint-Stock Companies (AD and EAD);
• Partnerships Limited by Shares (KDA).

On 1 January 2026 – the official date for the introduction of the euro – the capital registered in the Commercial Register will be automatically converted from BGN into EUR at the fixed and irrevocable exchange rate:

1 EUR = 1.95583 BGN

The conversion covers both the total amount of the capital and the nominal value of the shares and stocks, as registered at that moment.

What Does This Mean in Practice?

The conversion itself is carried out ex officio by the Registry Agency, without the need to file an application and without payment of state fees. This facilitates businesses and follows the logic of other automated administrative processes described in the article The Modern Sofia Offices.

It is important to emphasize that the conversion does not constitute an increase or decrease of capital within the meaning of the Commercial Act. The percentage participation of partners and shareholders remains unchanged, as do their rights in the company.

Any differences arising as a result of rounding to the second decimal place are recorded for accounting purposes as retained earnings or uncovered loss, without affecting the ownership interests.

2. Where Is the Conversion Regulated?

The legal framework of the entire process is clearly regulated in:

The Act on the Introduction of the Euro in the Republic of Bulgaria (AIERB), adopted by the 50th National Assembly on 7 August 2024 and promulgated in the State Gazette, issue No. 70 of 20 August 2024.

Main Statutory Provisions

• Art. 31–32 AIERB – define the method of conversion, the fixed exchange rate, and the rounding rules;
• Art. 33 AIERB – introduces the ex officio conversion by the Registry Agency.

These rules create legal certainty for businesses and are part of the broader regulatory environment, also analyzed in materials such as Sofia Offices: Good Location and Many Facilities.

3. What Are the Deadlines for Actions by Companies?

The law clearly distinguishes between actions performed automatically and those that require active steps by the companies.

3.1 Automatic Ex Officio Conversion

On 1 January 2026, the capital of all affected companies will be converted ex officio into euro in the Commercial Register.

3.2 Amendment of Constitutive Documents

By 31 December 2026, each company is required to update its articles of association, statutes, or deed of incorporation so that the capital is expressed in euro, and to file the documents for registration.

This requirement is often overlooked, but it is precisely the key to avoiding future legal and administrative problems.

4. Example

A company with capital of BGN 5,000 will have capital of approximately EUR 2,556.46 after conversion.

The partners retain the same percentage of participation, regardless of the resulting amount.

5. Risks of Non-Compliance

Failure to meet the deadline for updating the constitutive documents may lead to:

• refusals to register future changes;
• difficulties in selling shares or attracting investors;
• administrative sanctions.

6. Tax and Accounting Aspects

The conversion itself does not give rise to new tax liabilities. Nevertheless, it requires proper accounting treatment and synchronization between the Commercial Register, accounting records, and financial statements.

7. How Can SofiaOffices Help?

SofiaOffices offers comprehensive assistance – from legal analysis and preparation of updated constitutive documents to filing and monitoring registrations. For more useful materials and practical guidance, visit the SofiaOffices Blog.

8. Conclusion

The conversion of capital is an inevitable but fully manageable step with timely planning and professional support. Preparation now saves time, costs, and future legal risks.