About:
Bulgaria is located in the southeast of Europe. It is one of the nine countries that make up the historic and famous region of the Balkans. It is bordered to the north by Romania, to the south by Greece and Turkey, to the west by Serbia and North Macedonia, and to the east by the warm and beautiful Black Sea.
It is a territory with a low population density. It has only 6,916,548 inhabitants, most of whom are Christians.
The capital is Sofia, where most of the population lives and where the political, economic and cultural activity of the country is concentrated.
In terms of geography, Bulgaria is quite diverse. The landscape is composed of snow-capped peaks in the Balkan Mountains (Rila and Pirin). To the east of the territory the coast is watered by the waters of the Black Sea, which in most of the year the weather is warm and sunny.
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Companies and Structures
Opening a company in Bulgaria is an option that so far has been little explored by foreign capital investors. However, registering a company in Bulgaria represents an opportunity in a country with a favorable geographical position (access to the Black Sea, proximity to the Mediterranean through Greece and neighboring Turkey) and with the chance of being in a country that is a member of the EU.
On the other hand, the country is also characterized by a cheap labor force and a very low cost of living compared to other European countries. In addition to strategic sectors in its economy where foreign investment is welcome (telecommunications, transportation, hydrocarbons, etc.).
In our article we will explain to you the types of companies that can be registered in Bulgaria and how to do it.
Legal Framework
The law that is responsible for governing the types, business structures and administration of companies, as well as the requirements for establishing a company in Bulgaria, is the Trade Act of 1991. On the other hand, the Commercial Registration Act of 2008 regulates requirements and the procedure for centralized electronic registration with the authority in charge of collecting information on companies: the Commercial Register.
Other relevant laws governing corporate matters include the Corporate Tax Law of 2006, the VAT Law of 2006, the Investment Promotion Law of 1997, the BULSTAT Registration Law of 2005, the Social Security Code of 1999, the Tax and Social Security Procedure Code of 2005 and the Data Protection Law of 2002.
Types of Companies
The following types of companies are permitted under the Bulgarian legislature:
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Limited liability company,
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Joint Stock Company
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General Partnership
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Limited Partnership
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Company limited by shares.
And the types of business organizations mostly used for foreign investment are:
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LLC (Limited Liability Company)
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JSC (Joint Stock Company)
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Branch office
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TRO (Foreign Representative Office)
According to the legislature, all commercial companies would be set up as legal entities independent of their founders. There are no exceptions regarding the nationality of the company’s founder, all of them are considered legal subjects governed under Bulgarian law.
On the other hand, the foreign investment in a Bulgarian company can be 100%. The incorporated structures have legal status from the first moment they are registered in the Commercial Register.
Consequently, the time required for registration or liquidation of a company will be completed within three days after the administrative procedure is completed.
How to Register a Company?
All companies are registered with the Commercial Registry of the country. This in turn works in conjunction with the Ministry of Justice to supervise full compliance with the administrative processes.
1. Limited Liability Company
The limited liability company is the most commonly used type of organization in Bulgaria due to the low amount of capital required to establish it and the simplicity of its organizational structure.
It can be established by one or more persons or legal entities. Also, its members may be nationals or foreigners.
Requirements:
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Minimum opening capital: 2 BGN.
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Application for registration
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Articles of Incorporation
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Articles of Incorporation of a company
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Notarized signatures of all appointed general directors.
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Certificate of the deposited capital issued by the bank
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Resolution of the body managing and representing a member that is a legal entity
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Extract from the relevant company register in respect of a member that is a foreign legal entity
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Document evidencing payment of the state fee for incorporation of a limited liability company.
Fee
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In case of electronic registration of the company with the commercial register, the fee is between 80 or 160 BGN.
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For the reservation of the company name the fee is 50 BGN.
Administrative Structure
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General shareholders meeting
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Manager(s) who administers and represents the company before third parties.
Joint Stock Company
The joint-stock company is another common type of company in Bulgaria. It is preferred because of the low regulation of the transfer of shares and the non-liability of its founders for administrative tasks.
Requirements
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Minimum opening capital: BGN 50,000 (approximately EUR 26,000).
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Application for registration
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Articles of Incorporation
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Minutes of the Shareholders’ Incorporation Meeting
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List of attendance at the incorporation meeting
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List of subscribers of shares at the incorporation meeting
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Minutes of a meeting of the Board of Directors
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Certificate of deposited capital issued by the bank
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Resolution of the management body representing a shareholder that is a legal entity Extract from the relevant commercial register of a shareholder that is a foreign legal entity.
Fee
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In case of electronic registration of the company with the commercial register, the fee is between 80 or 160 BGN.
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For the reservation of the company name the fee is 50 BGN.
Organizational structure
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General meeting of shareholders
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Board of Directors
Branch
The branch is the preferred type of company for foreign capital. It is a legal entity with the capacity to carry out commercial activity. It does not require any paid-up capital or any separate administrative structure. The assets owned by this subject are considered assets of the parent company.
Requirements
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Official registration document of the foreign person issued by the corresponding competent authority according to its national legislation.
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Registration in the Bulstat Register (authority in charge of registering foreign investment).
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Official document of the persons managing and representing the foreign person.
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Resolution of the managing entity of the foreign person for the opening of a representative office in Bulgaria
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Original special power of attorney issued by the person(s) representing the company to the person authorized to register and manage the representative office in Bulgaria
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Original copy of the signature of the person who is the representative in Bulgaria
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Document certifying the payment of the fee for registration of the representative office
Fee
The fee for registration of a branch office is BGN 40.
Organizational structure
- Manager
Commercial Representative Office
It is a foreign person or entity with the capacity and right to conduct business on behalf of the parent company provided it is authorized by the home national legislation. These commercial representative offices have the right to conduct activities that may not be related to the business activity of the parent company.
Requirements
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Official registration document of the foreign person issued by the relevant competent authority according to its national legislation.
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Registration in the Bulstat Register (authority in charge of registering foreign investment).
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Official document of the persons managing and representing the foreign person.
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Resolution of the managing entity of the foreign person for the opening of a representative office in Bulgaria
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Original special power of attorney issued by the person(s) representing the company to the person authorized to register and manage the representative office in Bulgaria
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Original copy of the signature of the person who is the representative in Bulgaria
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Document certifying the payment of the fee for registration of the representative office
Fee
The fee for registration of a foreign representative office is 70 BGN.
If you are interested in setting up a company or a branch in Bulgaria, we at Privatus Maximus are ready to help you. Don’t hesitate to contact our experts.
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- Banking Services
In MUNDO we have already told you about the little explored land of opportunities that Bulgaria represents in the field of business and tourism.
If you have made the decision to visit the country or to invest money in it, it is important that you take a look at the banking system that the Balkan country possesses.
Current Situation with the Banks
Bulgaria has a fairly liberal banking system in terms of fees and access to its services. Thus, opening a personal bank account is a matter of minutes or a few hours.
On the other hand, different types of banks have branches in the main cities of the country. In total, there are 25 banking entities operating within the financial system, including foreign banks.
Also, according to data from the Banking Supervision Department of the BNB, in 2021 there are about five banks holding 66.6% of the assets within the Bulgarian banking system.
When visiting the country you will find three types of banks in Bulgaria:
-Commercial banks
-Postal banks
-International banks
Banks such as the Postal Bank are commonly used and have a presence throughout the country. They also have payment and withdrawal counters in post offices. Therefore, it is common to find a teller window in the postal services offering their services. The latter is more common in rural areas.
International banks are common among tourists or travelers. Since in them they are able to exchange foreign currencies to the local one in a much faster way.
Finally, the Bulgarian banking system is considered stable, profitable, with high levels of capital adequacy and liquidity. They are currently undergoing an acceleration of technological adaptation due to the demands of their users for remote services. Bulgaria is on the way to having a modern and innovative banking system.
Services Offered by Banks in Bulgaria
The vast majority of banks in the country offer. The opportunity to open your account in local currency or in foreign currency. In fact, you can do it in both. All tailored to your needs. Thus, you can make much easier and faster transfers from one bank to another.
Moreover, banks in Bulgaria offer good credit lines for both individuals and legal entities. The interest rates fluctuate according to the agency where you apply for your credit.
There are savings accounts, current accounts with or without remuneration, electronic accounts if you wish to do everything via the web and accounts for companies.
Existing payment methods in Bulgaria
According to recent data from the Bulgarian National Bank, the country is moving towards the use of electronic payment methods. Whether they are part of banks or not, Bulgarians are making more electronic transfers as the internet and smartphones penetrate the society.
During 2020 electronic transactions accounted for 66% of payments across the country. While 34% were made by cash, debit cards or bank transactions.
Other people also make use of the SMS payment method. Especially in rural areas where there is no or very little internet access.
So these are the existing payment methods in Bulgaria and their percentage of use among the population:
-Mobile applications: 80%
-Credit cards: 16%.
-E-wallets: 2%
-Debit cards: 1%.
-Bank transfers: 1%.
How to Open a Personal Account in Bulgaria
Indeed, having an account in the country, if in your case you are going to spend some time in the territory, will facilitate many things such as payments for services, transactions with other people, access to cash or exchange from one currency to another.
In addition, you do not need to be a national of the country to access a bank account. But we can say that the situation is getting a bit difficult nowadays for foreigners with all the restrictions in place. Not as easy as it was before.
Normally, to open a personal bank account in Bulgaria you do not need a big pile of documents. You will only need:
-Present a personal document (preferably passport).
-Proof of address
In addition to this we must inform you that the procedures are completely free of charge. Some banks may require a minimum amount to open your account. You can do it in Levas or Euros. This will depend on the service you need.
Bank Accounts for Companies
Since August 2019 there is a restriction for foreign companies on opening accounts in domestic banks in Bulgaria.
So in order to open a bank account for your company on Bulgarian territory you will need to have a Bulgarian residence card. This will also serve for tax residence in the country.
However, like the personal account, it is not necessary for you to be in the country to do the procedure.
This type of account is offered with debit cards to access ATMs or points of sale. It is delivered to your personal address or to your company’s address.
Opening a bank account for your company will also facilitate the establishment of a Bulgarian limited company or branch office.
If you wish to open an account for your company in this country, MUNDO will be glad to provide you with expert assistance. We have a long track record in terms of business and ensure a comfortable and safe experience for your business.
Requirements
Just like a personal account, opening a business bank account for a local is a simple and quick process. To open a business account, you would only need:
-A valid passport or identification card from your home country.
-A Bulgarian residence card.
-A mobile address for correspondence services with the bank.
-A minimum deposit amount to activate the account (10 BGN).
-Certificate of good standing.
Upon activation of your bank account you will be provided with your web access data. On the other hand, the debit card will be delivered personally or it can be sent to your home address within the country or abroad.
If at the end of this article it is still within your wishes or expectations to get an account in Bulgaria, please contact us. We will try to assist you in any possible way or offer you a decent alternative.
- Banking Services