Monthly Archives: January 2018

Company Formation Bulgaria – What You Need to Know

Mina Boycheva 30/01/2018

We created this article in help of all investors who want to start their business in Bulgaria. It provides all essential details that need to be known about company formations and their registration in Bulgaria.

In general, every foreigner is allowed to start a business in Bulgaria, no matter if he/she has a Bulgarian residency permit or not. The establishment of a company formation in Bulgaria is easy and straightforward. There are several types of company formations that can be registered in the country. Each of them has its individual specifics that are listed below.

Types of Company Formations in Bulgaria

An important precondition for starting a business in Bulgaria is a registration of the company in the Bulgarian Commercial Register. The Commercial Register is a single, centralized, electronic database that aims to facilitate business start-ups in the country and reduce corruption.

In accordance with the Bulgarian law the following types of company formations are present:

Lіmіtеd Lіаbіlіtу Cоmраnу

The Limited Liability company (Bulgarian: Дружество с ограничена oтговорност, short: ООД) is probably the most common and popular form of doing business in Bulgaria. The formation is also known as LLC in the USA and Ltd. in the United Kingdom. This type of company can be established by one or more shareholders who have liability limited to the amount of their deposits in the company. The Limited Liability company is a preferred type of business formation because of the minimum capital requirement of 2 BGN which is about 1 EUR.

An alternative of LLC is a single-member Limited Liability business formation (Bulgarian: Еднолично дружество с ограничена отговорност, short: ЕООД). In this case, one of the partners is holding the entire capital of the company. Foreigners can be designated as business managers.

In any case, to establish a Bulgarian LLC formation it is good to consider the following issues:

    Name of the company
    Partner/s
    Scope of company’s activity
    Registered address
    Amount of initial capital
    Manager/s

The registration procedure of Limited Liability Company formation requires the following:

    A partnership agreement in writing form. It must be signed personally by the founders or by a representative with explicit power of attorney.
    Listing in the Bulgarian Commercial Register.
    A deposit of the initial capital. A bank account opening is required.
    An appointed manager of the company.
    Registration in the Bulgarian Registry Agency.

Јоіnt-ѕtосk Cоmраnу Formation

The Joint-stock company formation (Bulgarian: Акционерно дружество, short: АД) is preferred mainly by capital companies. This option is suitable for large companies that want to start a business in Bulgaria.

The minimum capital for opening a Joint-stock in Bulgaria is 50 000 BGN (approximately 26 000 EUR). The capital is divided into shares whose owners can be both individuals and businesses. Each share certifies that its holder/s participate/s with its nominal value in the company’s capital and grants one vote for the general meeting of the shareholders.

The Joint-stock Company is liable to its creditors with its property. The company formation should have one or more registered shareholders (individuals or companies) and minimum three members of the board of directors. Shareholders are not obligated to participate in the management. As regards their responsibilities, they are regulated by the (Articles of Incorporation/Commercial Law)

For the management of a Joint-stock company are required:

    1. General meeting of the shareholders;
    2. Board of Directors (in case of single-staged managing system) or Supervisory Board and Management Board (when the managing system is two-stage)

To register a Joint-stock company in Bulgaria, the following is necessary:

    An election of an available business name.
    A Meeting of Incorporation.
    Election of the Board of Directors, respectively Supervisory and Management Boards.
    Deposit of the company’s capital into an opened bank account.
    Listing the company in the Bulgarian Commercial Register.
    Registration in the Bulgarian Registry Agency.

General Partnership

General Partnership (Bulgarian: Събирателно дружество, short: “с-ие”) is a type of company established by two or more persons who want to manage efficient business transactions under a shred registered trade name. The trade name should contain the family name of one or more of the partners or the trade names of their existing companies.

In general, a General Partnership formation is characterized by shared ownership, shared returns and risks, and shared governance. Thus, the partners are liable with all their assets. They may have either material or nonmaterial rights and obligations. The foremost step to register a General Partnership is to list the company in the Bulgarian Commercial Register.

Limited Partnership

Limited Partnership (Bulgarian: Kомандитно дружество, short: “КД”) type of business formation can be established by two or more persons who want to manage efficient business transactions under a shred registered trade name. A Limited Partnership is founded on the basis of a partnership contract.

The way that partners can participate in a Limited partnership is the main difference between this company formation and General Partnership. In a Limited Partnership one or more of the partners are solidary and unlimitedly liable for the company’s liabilities and the others are responsible for the amount of the contracted contribution. So partners can be general partners – the ones that bear unlimited responsibility and limited partners – the ones that have limited liabilities.

The trade name of the partnership must contain the name of at least one of the limited partners. Only general partners can register the Limited Partnership in the Bulgarian Commercial Register.

Why Starting a Business in Bulgaria

There are a lot of benefits of having an active company in Bulgaria. The country is a member of the European Union which is considered to be one of most influential economic areas in the world. As an official member, Bulgaria makes use of all the economic, political, legal, labor, environmental and consumer benefits of the union.

The tахеѕ іn Вulgаrіа аrе аmоng thе lоwеѕt іn thе ЕU whісh mаkеѕ іt оnе оf thе mоѕt favored соuntrіеѕ for business. The country has an excellent reputation for its low flat rate on the corporate and personal income which is 10%. It offers affordable setup fees and social security contributions. The value-added tax (VAT) rate at 0% within the EU is yet another good advantage of setting a company in Bulgaria. Regarding the standard VAT rate here it is 20% and the tax on dividends from company’s profit is 5%.

How to Start Business in Bulgaria

Contact us and take advantage of our incorporation services to start your company in Bulgaria. We will be glad to help you choose the most suitable company formation for your business in compliance with the Bulgarian Commercial Law.

Our team of professionals can take care of:

    Preparing all necessary documents and represent you during the registration procedure
    Opening a company account at bank of your choice
    Administering the process of receiving Tax ID and Value Added Tax Identification number

In addition, our accountancy department can manage your financing and the preparation of all the needed reports so that you can concentrate exclusively on your business.

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Five Big Office Building Projects Will Transform Sofia by 2020

Mina Boycheva 29/01/2018

Year 2017 that just ended can be defined as the year of the tall buildings in the capital of Bulgaria. The skyscraper projects provoked numerous disputes, protests, and debates about the need for such tall buildings in Sofia and the chosen location for them.

In February 2017 one of the biggest projects – Grand Kanyon Sofia received a building permission. The event was followed by more plans for constructing big office buildings in Sofia including a multi-functional building (215 m) near a large mall, a project for a residential building with offices (100 m) in Lozenets and an office building project (80 m) next to Bulgaria Blvd in Borovo District. In the autumn of 2017, it was reported that there is a serious struggle against the construction of an office building (150 m) in Strelbishte District due to lack of all the necessary documents.

Conversely other two tall office buildings has gained their building permissions and both are currently under construction. One of these office buildings is located on Tsarigradsko shosse Blvd while the other is rising up in the heart of the city on Macedonia Square. The increased demand for business offices in the capital have led to the renewal of several old projects for office buildings as well. In general, the largest office building projects of 2017 in Sofia are mainly focused on good infrastructure and fast transport links, with the new metro lines which are currently in development, being the main factor.

The Today’s Office Building Projects in Sofia

Which are the present worth mention office building projects in Sofia and what will they offer us as work area and environment? Let’s take a look on them.

Grand Kanyon Sofia

Grand Kanyon Sofia is one of the biggest office building projects that will be constructed in Mladost 2 District. The building is situated right next to Alexander Malinov metro station which grants quick access to almost each city point. The investor of this huge project is the Turkish company Garanti Koza.

The project includes modern offices, two residential buildings with 700 apartments, a hotel from an international brand, an entertainment and commercial center with a cinema complex, a spa area, and a park. The investment is expected to reach 120 million leva and the launch of the site is planned for 2020.

Grand Kanyon Sofia sofiaoffices

Advance Business Center

Advance Business Center is an administrative building on 11 floors in Mladost 4 District. It is built near the Business Park and is expected to be the tallest building in the area. The project has been financed by the foreign investor Global Trade Center. The company plan to open an area of around 14,500 sq. m. with Class A offices right after the first stage of the project is completed.

The investment for the entire project is 54 million euros, and the first building is expected to be finished in April 2019. The second part of the project is awaiting a building permit.

Advance Business Center sofiaoffices

Hyatt Hotel

In the very heart of Sofia, only a few meters away from the Levski monument, a hotel of a famous international hotel chain is under construction. In addition to the countless five-star luxury rooms and suites, two restaurants, two bars, and a huge spa center, the Hyatt hotel will offer a large conference hall with an area of 600 sq.m as well as five smaller meeting rooms. The common space for the organization of various business meetings and events will be 1300 sq. m. The company owner of Hyatt Hotel project is Terra Tour Service. It plans an investment of 30 million euros that will support finalizing the project during the first half of 2019.

Hyatt Hotel sofiaoffices

Building Office A

Located near Tsarigradsko shosse Blvd, this office building will provide office space of the highest Class A. The building will also feature a restaurant, a café and an underground parking area. The investment is 10 million leva and the expected date of completion is December 2018.

Office A sofiaoffices

Office Building 15

The company Arko Real Property Holding will locate its Office building 15 in the eastern part of Business Park Sofia, not far from the lake. The building features an interesting architecture and offers five levels of offices and two levels of parking lots, as well as a ground floor with shops and restaurants. The roof space will be organized as a small park. The project value is about 30 million leva and the expected date of its completion is December 2018.

office building 15 sofiaoffices

Interest in Class B Office Space in Sofia

The optimistic forecasts of the business and the good economic performance in 2017 affected the office property market in Sofia. Along with the new class A office projects the interest in Class B office spaces in Sofia has also revived.

Available Office Premises and New Office Projects in Sofia

The volume of new office rents has increased by 14% in 2017 compared to the previous year 2016. The offices of class A and B available at the end of 2017 are approx. 187,000 sq.m. Under construction are approx. 340 000 sq. m. of office space that are to be completed in the current year of 2018. At the same time, in 2017 were issued building permits for offices with approx. size of 110 000 sq.m. The experts expect that by 2020-2021 another 300,000 sq. m. will be completed.

There is a slight increase in the rental rates, reaching 7-10 euro/sq.m. for Class B offices and 12-14 EUR/sq.m for Class A offices.

Business Locations

The preferred business locations in Sofia remain the same. The interest is towards office buildings located in the districts of Lozenets, Hladilnika, near the Business Park Sofia, around Tsarigradsko shosse Blvd., Todor Alexandrov Blvd and Bulgaria Blvd. These areas have a high percentage of already rented office space at an early stage of the projects. The demand comes from well-established companies that expand their business and from emerging companies that are starting their business in Bulgaria.

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