Currently in the city of Sofia could be found more than 330 000 sq.m of offices available for rent. Among the office buildings there are some business centers which can not find long term tenants because of their poor location or lack of parking spaces. At the same time there is a strong interest in green offices and the high quality offices, which have provoked the interested of the international companies that have entered the Bulgarian business market. That is why the vacant offices of the highest class A are not many. This creates a niche for building of Class A office building projects, that are expected to be easily rented or purchased in the near future.
The available offices in Sofia are suitable for those companies who are looking for interesting design, guaranteed comfort and efficiency. Often, the companies have a choice of three or four locations to pick from that offer high quality office environment. The market for Sofia offices is quite active, where the demand is for ones in the city center and in the business districts. The location is the main criteria, followed by the quality and the type of the office. Since the companies’ budgets for the rent of offices is reduced, these companies are trying to optimize the area available and to use their resources in a rational way. Overall, the number of the transactions made is higher than the one in the previous two years. The interest in the virtual offices in Bulgaria remains stable.
The serious supply of office buildings in the city of Sofia in the last few years formed several different segments in that sphere of the real estate business. Several projects of office buildings of the highest quality are being preferred by the companies, while other projects are turning into outsiders. Those investors who have been smart enough to put their efforts on the planning and have carefully chosen the location of their office buildings, and have further insisted on the easy access, the good technical characteristics and the available parking options are now attracting the attention of the companies.
Currently, the companies can choose from more than 350 000 sq.m of available offices for rent or approximately thirty percent of all offices in Sofia. A great part of these offices are located in organized business centers in the outskirts of the capital. The prognoses are that the high-quality office buildings will get tenants in the next two years and will keep their popularity. At the same time, it is expected that the offices of the highest class when it comes to location and amenities will face an increase in the rental levels. Part of the business companies that are still hesitating whether to open offices in the country are currently using the option of the virtual offices in Bulgaria. Once they start to feel more secure they will most probably open offices in some of the high-class office buildings in Sofia.
The city of Sofia is among the European capitals with the greatest number of available offices of the highest class A. In the last year 2011, the rental levels of the offices have been stable. The same tendency could be seen at the office markets in Central and Western Europe, as well as in Russia. The office markets in Moscow and London have faced an increase in the rental levels of approximately ten per cent, while the office markets in Sofia, Athens and Dubai has underwent a decrease of eight per cent. The reasons for that for the city of Sofia is not the lack of interest but the increased number of offices available for rent. The tendencies for Sofia city are for a great number of the available offices and stable return levels of the investment.
Approximately 1.4 million square meters is the overall area of the offices in Sofia with more than 27 000 sq.m of new offices being completed in the last months of the previous year. The rental market is still in a slow phase and there are not many contracts sign. Those, which show interest in renting a new office, are usually companies that want to relocate and have access to better conditions and more extras in the office buildings of class A in Sofia. More than 150 000 sq.m of offices are to become completed and functional until the end of year 2012. The rental levels of the offices are expected to remain stable. The interest in the virtual offices in Bulgaria is also keeping its good levels and many companies are choosing that formula for making successful business in the country.
The offices in the Sofia business centers offer stable rental levels. The prices of the office premises of the prestigious class “A” cost about 12 euros per square meter for rent, while those of class “B” cost approximately 8 Euros per square meter. There are many companies that are trying to renegotiate and thus to reduce the level of their rent. There are also companies that benefit from lower prices and move from lower to higher class offices, mainly in the offices of the class “A” type. The available offices in the capital are about 25%.
The demand for offices along the major boulevards in the capital, as well as in the center has slightly decreased. The same applies to the demand for office space in the business centers of Sofia, which are in placed in other parts of the capital. At the same time, there is interest in the virtual offices, which provide flexible solutions for companies with specific needs.
For some time now, the offices in Sofia are in the focus of interest of the major outsourcing companies. These companies provide many new jobs in Bulgaria, and are renting a great part of the office space in the capital. The large companies usually register companies according to the requirements of the local laws, and thus step on the local market. They often create new job positions by taking advantage of the difference in the levels of wages in Sofia and those in the more developed economies. This, of course, is very good for the office market in Sofia at a time when most Bulgarian companies are shrinking their consumption and staff and transfer to smaller offices in less prestigious areas. Of course, there are small foreign companies in the IT outsourcing sector, which closed their offices in Sofia and opened virtual offices or moved to other countries where their costs will be even lower.
Most of the outsourcing companies in Sofia, however, have concentrated their activities in Bulgaria and occupy less than 40 percent or approximately 30,000 sq.m of office space from the beginning of this year until now. In other words, these big companies have very good influence on the labor market and the office market. Currently, large office projects such as the European Trade Center to “Tsarigradsko shosse” Blvd. is three quarters full and all of its five buildings are open. This is just one example of the many available commercial buildings in Sofia city.
According to the market research, Bulgaria ranks fourth in this part of Europe as a good place for investment and outsourcing. Aside from the financial side of things, the low taxes and the stable economy, Bulgaria attracts with its well-organized and stable business environment. In the offices of the outsourcing companies in Bulgaria work employees with good education and high work culture that are paid reasonably.
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.
By the end of June 2010 all Bulgarian companies registered in the Registry Agency must submit their financial reports for 2009, which is done in the Bulgarian Trade Register of the Registry Agency.
The companies that do not submit their annual financial reports on time are facing penalties from 2000 up to 3000 leva. There are more than 27000 such companies in Bulgaria for 2008.
The list of those companies has already been prepared by the Bulgarian Registry Agency and the National Revenue Agency. The deadline for submitting those reports was June 2009 so they are almost one year late with that.
The good news is for those who even though have missed the deadline have submitted the reports with some delay. For them the penalties will be significantly lower, the National Revenue Agency promised.
Each operating company must make and submit an annual financial report on the results of its activities during the reporting year by 31st of March of the following year. After completion of the annual balance of the accounts, for the company is being drawn up an annual financial report for the activity, which provides summary information about the accounting to the moment under the company's accounting policies during the past fiscal year. The relevant accounting policy of each company include the bases for evaluation when preparing the annual financial statements and is an important part of the corporate accounting, determining the manner for the formation of the company's financial results.
The annual financial statements are based on the international accounting standards and are the final stage of the accounting through the entire year. At preparing the annual financial statement must be taken into account that, although independent from one another, the details of the report at the beginning of the current reporting period should coincide with the data from the end of the previous reporting period. This annual report is made towards 31 December of the year and should fairly present the financial and property status of the company, the changes in the cash flows and the capital.
According to the Law on Accounting, the proposed annual financial statement must meet several important conditions, namely: to be understandable and useful, to give an opportunity to be evaluated past, present and future events, to be clear of mistakes and the information from various years to be comparable. The items which compose the annual financial statements include a balance sheet and cash flow report, income and expenditure accounts report, report for the capital and several appendixes. When submitting the annual financial statements of trade companies should be prepared several documents, namely: a certificate of company accounts, balance, minutes of general meeting, the sole act of the owner and power of attorney certified by a notary, in case that the documents are submitted by accountant representing the company.
When the annual financial statement has been prepared, the company should prepare its annual tax declaration according to the Law on the Corporate Income Tax, while the individuals must submit an annual tax declaration for income tax on individuals. Namely, the aforementioned annual tax declaration shall be filed by all persons who are taxable and this shall be done according to the deadlines set by law. The information should be accurate and the deadlines must be met to avoid fines. After the annual balance of accounts are to be prepared the opening balances for the next year and to be made a comprehensive statement of the Company for the year under review. This annual balance of accounts is based on changes in the law for the reporting period.
The annual tax declaration of the individuals include information concerning the income acquired during the year from employment, other business, rent or granting rights or property, income from the sale or exchange of property, as well as other sources such as benefits, awards and more. The annual tax declaration of individuals is made regardless of the amount of the declared income received during the previous fiscal year. The deadline for submission of the annual tax declaration of individuals is by the end of April each year. When individuals submit their tax declarations until early February, they enjoy a discount of five percent on the paid part of the tax. When the declaration is filed electronically the five percent discount applies until the end of April. The annual tax declarations of the individuals shall be filed in the Territorial Directorate of NRA in accordance with the permanent address of the person. When the individual is a foreign national, the annual tax declaration is submitted by the representative of Directorate of NRA where the proxy resides.
The annual financial statement shall be drawn by:
– Individuals in their role of accountants
– Specialized accounting houses and businesses
The annual financial report contains:
– Signature of the head of the business or an authorized individual
– Company stamp (if the report is for a company and not for an individual)
The annual financial report shall be published in economic journals and on the iInternet from:
– companies that are not re-registered by the end of May 2009 and are subject to independent financial audit
– civil associations
– legal persons who are not traders
– foreign entities doing business in the country
The penalties associated with the annual financial statements of companies and individuals include:
– the individuals who have not filed their annual financial statements in time shall be punished by a fine or penalty of up to 500 leva. When there is a repeat offense, the fine is up to 1000 leva.
– the individuals who have filed false information in their annual financial statements shall be punished by a fine or penalty of up to 1000 leva. When there is a repeat offense, the fine is up to 2000 leva.
– sole traders who do not submit their annual financial statement together with their annual tax declaration or do not make it on time, are to be fined to an amount of up to 500 leva. When there is a repeat offense, the fine is up to 1000 leva.
– sole traders, for whom the annual financial statements are subject to compulsory financial audit and does not submit a copy of the report under the law for independent financial audit or does not meet the deadline are fined to the amount of up to 2000 leva. When there is a repeat offense, the fine is up to 4000 leva.
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