UPDATE 2022 This page aims to show you the types and procedures of starting different Company formations in Bulgaria. In general every foreigner is allowed to open a company in Bulgaria, no matter if he or she has a Bulgarian residency permit or not.
Start Company registration procedure in Bulgaria – Types of Company
Limited Liability Company (Ltd) – It is one of the most popular choices for small and medium businesses. An Ltd may be founded with one or more shareholders (individuals or companies) and managers (individuals). The lowest required founding capital of Limited Liability Company is 1 Euro.
Joint-stock company (JSC) – This option is suitable for large companies that want to start business in Bulgaria. The company formation should have one or more registered shareholders (individuals or companies) and minimum three members of the board of directors. The minimum founding capital is 25.565 Euro.
Start a Company in Bulgaria – Important Details ( Step by Step )
In order to prepare the relevant documents, we will need the following information in advance:
1. Passport details of the shareholder/s and manager/s
2. Suggestion regarding the name of the company : Here you can check Company Name Availability: public brra.bg CheckUps Verifications RightsOverCompany.ra Note: verification can only be done in Cyrillic
3. Activities of the company
The registration procedure takes 3 days. If the required notarized documents are notarized abroad (in case the manager/s decide not to come to Bulgaria) the procedure will be extended with the days required for legalization of the documents.
Owners of recently formed companies in Bulgaria should know that their company will be obligated to pay 10% flat income tax on the profit, no matter of total profit amount.
The companies in Bulgaria should submit their annual tax return for the previous calendar year by the end of March. This is required even when the company has not registered activity for the last year.
Cost: The exact calculation depends on the number of the documents that should be translated, legalized at the Ministry of Foreign Affairs and coordinated with the bank and Commercial Register
€ 600 – if the manager/s and shareholder/s are present in Bulgaria
€ 800 – if the manager/s and the shareholder/s will not be present in Bulgaria to notarize the relevant documents
from € 1200– if the owner of the company will be a foreign legal entity
All taxes and fees are included:
– Notary fees
– opening of an initial capital bank account
– Translation and legalization of the documents in the Ministry of Foreign Affairs
– Registration in the Registry Agency
– Commercial Register- Legal fees
Bank account opening: We should be informed in advance if the manager will be present personally or will be represented by a proxy with an exact power of attorney.
Cost: € 100 per account
for more information on setting up a company in Bulgaria or submit your request in the submission form on the left.
SEE ALSO: Accounting Services
The kinds of business organizations most typically used for establishment of international businesses in Bulgaria are the OOD, the AD, the branch and the TRO.
Limited Liability Company – ( OOD or EOOD )
The OOD company is the type of business organization most widely utilized by financiers because of the minimal capital demands and the simpleness of its corporate administration structure. An OOD can be established by several persons, people and/or legal entities. As a type of OOD, the entirely owned OOD is subject to the exact same guideline as the OOD, with particular exemptions relating to its specific framework of shareholding. Investors in an OOD may be Bulgarian and/or international individuals and/or legal entities.
The minimum share funding required by the Business Act for consolidation of an OOD is BGN 2, or2 Bulgarian Leva, which is equal to approximately one Euro, distributed in shares with value of not less than BGN 1 each.
The investors can make both money and in-kind contributions. The in-kind payment is subject to obligatory analysis by three independent specialists, designated by the Bulgarian Pc Registry Company.
The shares in an OOD are not tradable instruments. They might be moved by a notarised share transfer arrangement. The transfer of shares in between shareholders does not call for a resolution of the basic meeting, while a transfer of shares to a third party, in addition to the admission of the brand-new investor( s), requires such a resolution.
The business governance framework of an OOD contains: (i) a basic conference of the investors; and also (ii) several managers who take care of the business and also represent it vis-á-vis 3rd parties. Under Bulgarian legislation just an individual may be selected as a manager of the OOD. The manager can be a shareholder, as well as a third person, and there are no limitations for a foreign person to be appointed as supervisor of an OOD.
OOD (Ltd) Registration Documentation List
- A paid-up capital note that you can issue from a bank of your choice.
- Consent to accept management and specimen signature (specimen) – needs to be notarized and signed by the manager. There are two options: to have a specimen prepared that only needs notarisation or to ask the notary’s office to prepare it.
- Articles of incorporation
- Articles of Incorporation – The document must contain the decisions taken at the constituent assembly and the agenda of the meeting.
- Resolution appointing the sole owner of the capital as manager
- Application form A4 – the most important document!
- Declaration according to art. 141, par. 8, Commercial Companies Code. The manager declares that he/she meets the requirements of the law for a company manager. Signed.
- Declaration under Article 142, Commercial Law (LC). Prohibition of competitive activity. Signed by the manager.
- Declaration under Article 13, paragraph 4, of the Commercial Register Act (CRA). It declares the truth of the stated circumstances. It shall be signed by the applicant.
- Declaration pursuant to Article 13(5) of the Commercial Companies Act. To be filed by the bearer. To be completed only when the applicant does not present the documents in person to the TR.
- Application for the retention of a company (D1), which is optional.
License or permit when the business of the company requires one.
Joint Stock Company ( AD )
The joint stock company is an additional commonly utilized kind of business organisation. It is favored because of the lack of legal limitations on the transfer of shares as well as the absence of individual engagement of the shareholders in the procedure of the business. However, the company administration structure is much more complex compared to the among the LLC as well as the Business Act sets forth necessary rules regulating the formation of a reserve fund, distribution of earnings and minority shareholders civil liberties. A JSC might be developed by one or more Bulgarian and/or foreign people and/or legal entities. As a kind of a JSC, the solely had JSC goes through the same guideline as the JSC, with specific exceptions associating with its specific structure of shareholding.
The minimal licensed funding needed for establishment and procedure of a JSC is BGN 50,000 (fifty thousand Bulgarian Lev), which equals to around EUR 26,000 (twenty six thousand Euros). Nevertheless, special legislation may need higher minimum share funding for carrying out certain kinds of tasks, as an example financial or insurance coverage activity. The share capital of a JSC should be distributed in shares with a nominal value of not less than BGN 1 (one Bulgarian Lev) each. At the time of unification of the firm and as a condition criterion for such consolidation, at the very least 25% of the nominal value (or issuance worth identified in the by-laws) of each share must be paid in and the rest of overall quantity of the capital will be paid in within two years. Similarly to the LLC, the shareholders of a JSC can likewise make both cash money and also in-kind payments.
The corporate governance framework of a JSC consists of: (i) a basic conference of the shareholders, as well as (ii) a board of directors (in the case of a one-tier administration system), or a managerial board and a managing board (when it comes to a two-tier administration system).
The shares of a JSC are tradable tools. The shares of a JSC might be: (i) signed up or bearer shares; (ii) usual or fortunate shares, (iii) happened or book-entry type shares.
Registered shares are transferred by recommendation, whereas bearer shares are transferred by simple delivery. The transfer of shares in the JSC is exempt to registration in the Commercial Register. The transfer of licensed shares should be participated in guide of investors of the JSC to have effect against the company. For the most part new investors might conveniently go into the JSC. However, restrictions on the transfer of shares may be attended to in the by-laws of the business, as well as such constraints shall be binding on the firm and on the investors. Limitations on transfer might relate to any kind of kind of shares.
The unification of a branch is just one of the options to the establishment of service procedures of an international firm in Bulgaria. International firms signed up abroad, as well as foreign people or persons that do not certify as legal entities can sign up a branch in Bulgaria, gave that they are properly included and/or qualified to carry out organisation under the nationwide law of their residence nation.
A branch of an international company is established using registration into the Commercial Register. After its proper registration according to Bulgarian regulation, the branch of a foreign firm, although not a different legal entity, has a particular level of self-reliance from the moms and dad business. Hence, it is required to maintain industrial publications as a separate service facility as well as prepare a separate annual report. Nonetheless, as the branch is not a separate legal entity, its assets as well as responsibilities are regarded to be assets and liabilities of the moms and dad company. For that reason, the branch is not called for to follow resources enrolment needs or to have separate by-laws or a distinct monitoring structure, besides a supervisor. From tax perspective a branch of a foreign firm is considered a “permanent facility” and it sets off company revenue tax obligation liability in Bulgaria for the foreign parent firm.
Trade Representative Office
A foreign individual/ entity can sign up a trade depictive workplace in Bulgaria, offered that it is entitled to carry out organisation under the national regulation of its residence nation. As pointed out over, a TRO is established by means of registration with the Bulgarian Chamber of Business and also Sector. A TRO is not a different legal entity and it may not carry out company tasks. Hence, a TRO is implied to perform non-proprietary tasks, such as arranging promos, exhibits or presentations, training or advertising of services or products, etc. Consequently, as a whole a TRO does not create revenue as well as is not subject to corporate revenue taxation in Bulgaria. However, must a TRO take part in organisation activities in the country, it would qualify as a “long-term facility” for tax functions and the foreign parent business will certainly be responsible in Bulgaria for corporate income tax on the profit made as a result of the business activity of the TRO.