The companies which decided to outsource their business to the capital of Bulgaria and those foreign citizens who registered companies in Sofia are obliged to obey the legal requirements of the country. They have to be strict with the laws and to be responsible for the welfare of their personnel, just like all the other companies formed by Bulgarian citizens do. The basic requirements for employment relations in the country are arranged in the Labor Code. Here are also set the regulations that concern the working time and the breaks, as well as the holidays. All investors who decide to register a company in Bulgaria and hire employees should be aware of these rules and regulations. There is also the so called Social Security Code, which covers the issues with social security in case of general sickness, maternity leaves, cases of occupational illness and different accidents at work, unemployment situation and so on.
Absolutely compulsory in Bulgaria are the health insurance and the social security. There is also an option for supplementary health insurance and social insurance. The amount due for social and health insurance depend on the income of the employees and are covered by the employers. In addition to that, employers are the one to provide safe and healthy environment that will be pleasant for the people who will work there. The modern office buildings are arranged in accordance to these requirements and usually the registered companies have just to rent one of the office units to secure the requested healthy and safe environment. Today in the capital Sofia are to be found many modern business centers, special office centers and separate offices in commercial and residential blocks. There are a few business areas that are quite popular among the companies thanks to their location and these are the administrative zone of the city center, Lozenets district, the Business Park Sofia placed in Mladost district, and of course the new business area along the southern part of the ring road.
Besides registering a company in Bulgaria and finding a safe office with healthy working conditions, the employers have to follow a few social rules for equal opportunities of the employees, non-discrimination and gender equality. There is a so called Discrimination protection low, which gives the standards and protects the right of individuals to work and secures for equal working conditions and equal payment for same work done. It also secures equal opportunities for career development and training. Foreign investors who have formed companies in Bulgaria should also be aware of the Disabled People Integration Law. According to that law, the employers who offer job to disabled people will be stimulated by the government. At the same time, the employers should be obliged to adapt the working environment for the people with special needs. In case of disputes between the employer and the employees working in the registered company shall be applied the Collective Labor Resolving Disputes Law. It sets the methods for solving the collective disputes between the company employer and the employees. The disputes might be regarding the working conditions or the insurance conditions. The disputes should be arranged through a process of mediation or arbitration by the organizations of the employers and the trade unions, as well as by the National Arbitration and Conciliation Institute.
Foreign companies and citizens that have an intention to run a business in Sofia should set up their own companies. The conditions for them to do so are the same ones that are applied to the Bulgarian citizens and are set in the Bulgarian Commercial Code. The legal forms of starting a business that are most popular are limited liability companies and joint stock companies, though there are other options too like sole traders, holdings, etc. In order to be successful, the newly registered companies should have a secure financing and a solid commercial strategy. Before starting its business, the company has to go through a commercial registration at the Central Register and through a registration for VAT, which is mandatory if the turnover of the company is more than 50 000 BGN.
Investors who wish to register the so called public company, also known as joint stock company, shall go through specific procedures. These include for their company prospect to be received and approved by the Financial Supervision Commission. This commission is the one that issues permits for the companies that can operate as investment companies, companies with special investment aims, management companies, companies that manage mutual funds, etc. There are certain companies that operate on the capital markets, which have special requirements that concern their capital, their activities and the way of management. They work in close proximity with the Financial Supervision Commission.
Good news for all people that want to start doing business or to offer temporary services in a foreign country like Bulgaria, for example, is that there is a European law called Services Directive. Its purpose is to make registration of a company easier and to offer more services on the territory of the European Union, which includes all its twenty seven member states, as well as Norway, Lichtenstein and Iceland. This special Services Directive makes the member states reduce the level of bureaucracy and to simplify the formalities that are necessary to start a company, as well as to make the entire public administration work in a more efficient way. As a result of the efforts made and the Directive issued, the member states of the European Union had to organize online government portals and thus arrange all these administrative procedures in an easy and fast way. These special electronic government portals provide a lot of useful and practical information on all administrative issues that concern the start or the expansion of the business services in the country. Bulgaria is no exception to that and Sofia is proud of its online government portal. There one might find information and advice on every aspect of doing business, getting permits, applying for a license and so on. This online system allows for sending online applications to the authority that is in charge. In addition to all that, the online government portals in the countries that are members of the European Union are connected in one main network, which is also quite useful.
Since Sofia is the capital of Bulgaria, it is no surprise that most of the big companies head to this city when they decide to start a business in the country. The other cities they usually choose are Plovdiv, Varna and Bourgas. These companies have two options to start. Usually the smaller companies prefer to try the market at first and use the services of the virtual offices that are provided in Sofia. In this way for a certain period of time they can process their correspondence without physically being here, they can present the services of their company on the market, arrange meetings and job interviews, etc. The bigger companies tend to make their research well before they actually establish themselves in Sofia, so that when they actually open an office in Sofia, they have already done their math’s.
All companies that decide to start business in Sofia city will be pleasantly surprised to find real professionals in the spheres of legal services and consulting, Bulgarian company registration and taxation, financing, etc. These companies will be able to choose from several types of legal forms depending on their business. These could be sole trader enterprises, joint stock companies, limited liability companies, holdings, etc. For the registration of a company in Bulgaria one needs to fill in a set of documents arranged according to the laws in the country. The first thing is for a company name to be chosen, reserved and registered. Once this is done, there are certain documents that have to be prepared like an agreement of the association, a specimen of the signature of the managers, resolution from the meeting of the managers, etc. After that a company bank account is to be open by the manager or by a person who is authorized by that manager with a power of attorney signed in front of a Notary Public. Several other registrations need to be made as well – with the National Statistical Institute, with the National Insurance Institute, with the Local Tax Authority, with the Commercial Register, the personal data protection and the labor inspection committees, etc.
After the documentation is organized or along with its organization, the investors could look for an office. The city of Sofia has excellent business areas with modern business centers of class A, where the offices come with top location and are supplied with all facilities required for an efficient working process. In addition are available meeting and conference halls for different events with the coworkers and employees. Offices could be fully equipped and furnished to meet the needs of your business. They could be set in the center of Sofia or in the main business areas like Business Park Sofia in Mladost District, several large business areas near the southern part of the ring road of the capital and the office zone in Lozenets District, which is also set near the center and is served by the new line of the metro.
Using a Virtual Office in Bulgaria is easy, comfortable and not expensive as you might have initially thought. The virtual offices have emerged as a modern way of doing business and getting professional representation of your business in Sofia when you are still becoming acquainted with the business atmosphere here and are not yet sure if you want to open a regular office and to hire personnel. By getting a virtual office one can get a business presence with no need of physical presence. Further, one can have plenty of professional services at a very low cost than the one for the traditional offices services. This is also a way to check the market and the local economic situation and not to lose too much finance or register a company, if things happen not to work properly for you here as you have previously planned.
The services that the virtual offices present are numerous and are all dedicated to the professional presentation of your company and business in Bulgaria. They might include, but are not limited to the services enumerated below. The most useful service is a receptionist that will answer the calls directed to your company in a professional way with the name of your company. Then, the receptionist will transfer the call to your office or mobile or will leave a message for you with information, so that you can contact the person who wanted to speak with you later. Thus, the clients receive the services for a full-time receptionist that will present your company in the way you want it. The receptionist will be in charge of processing your calls and also of distributing your correspondence. The calls for your company will come through a direct telephone line that will be used only for the purposes of your company. You as a client will have full access to that telephone number, but it will not interrupt your meetings and your work. In addition to that, there will be a voice mail, so that no call or message are lost if they are received after the regular business hours. The calls and the messages will be taken by the receptionist and then forwarded to you at the end of the day or at the end of the week – this depends on you.
Besides own telephone number and a professional receptionist, clients who have virtual offices will get a reputable business address, usually in the very center of Sofia city. This will be an official company address, which can be used on your business cards, brochures advertising your business, etc. The emails, the mail and the packages from the couriers to your company can be forwarded to you in the way you want it. In case that you need to meet with potential partners, arrange interviews to recruit people or make a presentation, then your company can have access to a meeting room with all facilities needed, including a wireless connection. You can use these services as long as you want until you decide to register your own company in Bulgaria.
Like in every other country in the world, registering a company in Bulgaria and making business here, also means paying taxes. The taxes in the country are dealt with by the National Revenue Agency. The tax system includes direct and indirect taxation, custom duties and local taxation. All companies which are registered in Bulgaria are obliged to pay corporation tax to the amount of 10 %. This tax is also applied to foreign entities that trade in the country. The companies who are not registered in Bulgaria and do not operate in the country pay just a tax on the earnings that are generated here. Corporation tax should also be paid by legal persons on profits made from rental of immovable or movable property.
The indirect taxation or the so called VAT is applied on various spheres – supply of goods and services, vehicles imported in the country, etc. When the trade is between members of the European Union, then the terms used are intra-community acquisition and intra-community supply. The VAT basic rate is 20 per cent, but it can change for certain supplies. Then come the Custom duties, which are arranged by the Excise and Bonded Warehouses Law in Bulgaria. They are applied on alcohol and tobacco products, on coffee, on electricity and cars. The date of registration under the VAT requirements is the date of the registration certificate. When a foreign entity that is not registered as a company in Bulgaria wants to enter the market, then this entity shall register under the VAT requirements. The local taxation are those taxes that are collected by the municipalities. These include the property taxes, which concern those investors that plan to buy an office in Sofia or any other country in Bulgaria, the vehicle taxes which concern the companies that plan to use cars here, charges for domestic waste, administrative and technical service, pavements, markets, child care facilities, etc. The local taxes are collected by the local authorities and differ for each region.
Companies which are registered in Bulgaria and own an office in Sofia for example, plots of land, buildings and other immovable property shall pay an annual property tax. Persons who are required to pay VAT tax include the owners of such properties, but also concessionaires. When a new property is acquired, the persons who are required to pay a tax shall also complete a declaration according to article 14 of the Law for Local Taxes and Charges. This declaration shall be presented within two months of acquisition. The companies which have been registered most probably will acquire vehicles and naturally they have to pay taxes on these vehicles. The vehicles that have to be paid taxes on are vehicles which are registered to be used on the road system of Bulgaria, as well as vessels that are registered at the Bulgarian ports and airplanes with registration at the Aircraft State Register. The vehicles bought should also be declared within a period of two months after the purchase. The vehicles taxes are established by the municipal councils and they depend on the engine and year of manufacturing.
Bulgaria, and especially its capital Sofia, is among the tempting destinations for the big companies that want to outsource their business in order to reduce the expenses and increase their profit. The process of outsourcing is not new and the general idea is for the big companies to move to emerging countries with stable economy. Since Bulgaria has very solid economy factors, the country faces an increased market share of the outsourcing companies. All of these outsourcing companies are focused on cost efficiency and the minimum risk, aiming at knowledgeable, highly-educated people who can work for them for a salary much lower than they could expect from the workers in the well developed economies. It seems that people living in the capital Sofia, as well as those in the other big cities of the country answer to all these criteria.
Companies that want to outsource their business to Bulgaria are pleased to find out that here they can count on professional services such as fast company formation, audit and accounting when needed, tax advises, payroll administrations, as well as human resources, regular office services, virtual offices, etc. By using these services in Sofia and other big cities of the country, big companies get increased flexibility in making business, planning strategies and arranging the costs. They also get the chance to make changes in the capacity of work. Thanks to that flexibility, these companies are ready to respond to the main changes on the market.
Of course, there is much more to the outsourcing process than that. Most of the companies, both small and big enterprises, move their business practices to Bulgaria as they have fewer expenses for people and equipment. People in Bulgaria are not only eager to work, but they are also well-educated and they make efforts to improve and add to their knowledge through various professional trainings, computer and language courses. The good education of the people in Bulgaria is a national policy. Thus, the companies that decide to outsource their business to Sofia and register a company here according to the Bulgarian company formation regulations will eventually become more competitive on the market and will allow them to enjoy a better market value.
The outsourcing companies are now able to try the local market at first by using a virtual office. Once they figure out how the business here works, they are welcome to rent one of the available Sofia offices in the big business centers. Another option for them is to buy such an office. However, if they do not plan to work in the country for long years and if they do not know how much they will expand, a better way is to rent an office in Sofia and move to a bigger one if needed. The business centers that are available in the capital are numerous, all of them being very modern and equipped with all necessary facilities for a smooth working process.
Company registration in Bulgaria could be easily arranged by following a few practical steps. The easiest way, however, is to use the qualified services, which are offered by the professionals dealing with company registration. The Commercial law in Bulgaria allows for the setting up of several types of companies including corporation limited liability company, joint stock company, a sole-proprietorship company, a charity organization, local branch of a foreign company, shelf company, a holding, and so on. The so called re-registration service of already existing companies is also available. The process of re-registration with the Bulgarian Trade Register is done for companies who have been established as such before year 2007 when that register was set and is in operation ever since.
We all live in a busy world, where one of the most cherished assets is the time. Thus, there are professionals who can help you set up a company in Bulgaria and save you not only precious hours and days, but also contact with the local administration system, the Registry Agency, banks, etc. Nowadays, setting up a company is easy and it does not require your physical presence. The first thing that is there to be decided upon is the form of the company you wish to set up. If you decide to go for a professional help, you will have a reputable team that will advise you on the type of company that is most suitable for the business you wish to make in Bulgaria. As stated above, there are several options available and with the help you will get, you will be able to pick the legal form that best matches your interests in terms of taxation, accounting and other. Usually, people who want to set up a company have a vision of what they want to achieve, thus the company formation process should be easy.
The documents that one needs to present in order to register a limited liability company in the commercial register include a completed application form for the registration, a memorandum of association and a constituent meeting minutes. Further are required a consent with specimen of signature that is certified by a notary public and this is required for each of the managers. Then, one will also need a declaration in compliance with art.142 of the Commercial Act, a reservation of the company name which should be unique, a document from the bank of the capital deposited as well as a receipt of the paid state taxes. In addition are required a certificate for the actual status of the shareholders and a decision of the managing body. When the company is set up, there are some other registrations that are quite important and need to be arranged. These may include VAT registration and registration at the National Insurance Agency if the company plans to employ other people, pay them salaries, etc. These registrations are complex as well and the best way to arrange them is by using professional advice and presentation.
Now that the deadline for the company re-registration in Bulgaria is near, many company owners in the country should act quickly and arrange that procedure. Otherwise, they will have serious troubles with the ownership of their properties. All the companies, which are not included in this new online register according to the regulations of the Trade Register Law, shall be removed from the register of companies in the country. This will also result in a loss of the company assets, which includes properties as well. This is so, because the companies that have not went through the re-registration process shall be blocked and will not be able to sell their properties.
How can you re-register your company? This you can do in two ways – you can either come to Bulgaria or arrange everything from abroad. Since travelling can be time and money consuming, you can send a signed Power of Attorney to our lawyer, who can represent you and do that for you. The lawyer will prepare all the necessary documents ad will send them to you for a signature. Since the deadline is near, make sure to act quickly and arrange everything on time. Once the company is re-registered, all its financial reports since year 2007 should be published in the online register. The deadline for this is three months and that service, as well as other tax advisory services in Bulgaria are also offered by our company.
The deadline for the process of re-registration of companies in Bulgaria is at the end of the year or 31st December 2011. In case of failure to complete that procedure, the owners of companies might lose them and also lose the properties that are bought on the name of the company that is not re-registered.
This is important information for all those investors, who have purchased properties by company registration in Bulgaria before year 2008. According to the Trade Register Law, which is applicable to the Bulgarian companies, requires that all existing companies must go through the process of registration into the new online register by the end of this year.
According to the regulations of that law, which came into force in the beginning of year 2008, the companies which are not added to the new online register shall be removed from the register of companies in the country and will lose their assets, which includes properties as well. The companies that are not re-registered shall be blocked and will not be able to perform any activities at all, including sale of their properties.
The deadline for the re-registration of companies in Bulgaria will be extended for another six months and thus the process should be completed by June 30, 2011. According to the Ministry and the Registry Agency of the Bulgarian companies at until 1st October 2010, nearly 900 thousand companies have omitted to apply for re-registration. The extension is granted also with the purpose of introducing paid access to the registry, which will help to better protect the company data and prevent theft of companies. Under the new requirements, the access to the commercial register will be given when you present electronic signature or credit card. Information can also be obtained on site, in the Registry Agency after the presentation of identity card.
The project provides the only information to remain free and public to be the company name and date of registration, the headquarters and the registered address. List of acts announced by the company could be seen, but in order to be read, a fee shall be paid. The proposal is considered to be unreasonable and contrary to basic legal principles, according to the members of the “Access to Information Program”. They believe that publicity of company data is of great importance for the security of the business, which in first place led to the creation of the unified electronic commercial register, to which everyone has unlimited access.
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