Company incorporation in Bulgaria

Company formation in Bulgaria

Company formation in Bulgaria Varna Sofia Dobrich

*The founders of a Bulgarian company may come to Bulgaria only for one day to complete all paperwork for the bulgarian company registration.

*We can register a Bulgarian company remotely, the founders may ovoid visiting Bulgaria. Extra paperwork may be required in this case.

*Turn-key price for setting up a Bulgarian private company equal to 595 Euro includes all documents preparation and services, notary and bank taxes, initial escrow bank account opening and minimal capital paid in, government fees and taxes, obtaining the Certificate of company registration, the Company seal. Actually, the customer gets the company ready for commercial activity, obtaining land and real estate property, opening any current and deposit bank accounts, purchase of vehicles and vehicle registration. Normally this process takes 5-7 working days.

*In Bulgarian law there are no restrictions on foreigners setting up a company in Bulgaria: there are no special requirements for their participation in the establishing of a company such as a work permit or resident permit. There is an an exception to this rule which exists in connection with registering as a sole proprietor, the requirements are different: a foreigner who wants to be registered as a sole proprietor should have a residence in Bulgaria.

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Types of Business Structure

LTD/Limited Liability Company (or Sole-owned Limited Liability Company)

An LTD/LLC is formed by one or more physical persons or legal entities, which are liable for the obligations of the company up to the amount of their contributions to the subscribed capital of the company. If a foreign legal entity participates in the company, its certificate of registration must be presented.

Under Bulgarian law, the minimum required capital to open a limited company is €1.

The "Turnkey" price of a Bulgarian company (Ltd/LLC type) registration service is 595 EURO.

The price is the same for registration of a company with one or several founders/shareholders.

This price includes:

- company name verification;
- preparation of all statutory documents and declarations;
- arrangement of a visit of the founders of the company to the local notary;
- assistance in escrow bank account opening;
- submission of the company documents to the Commercial Register/Trade Register (similar to Companies House in UK);
- provision of the company registration certificate.
- provision of one company seal.

Normal duration of the registration process at the Trade Register: one week.

The founders are required to be present in Varna during one day. (Optional: remote registration of a company is available, therefore visiting Bulgaria is not obligatory)

The founders are required to hold a valid passport, other documents are not necessary.

The founders may be of any nationality.

The founders may be appointed as the directors of the company.

The directors may be of any nationality.

Minimal number of directors: one.

Allowed minimal share capital is 1 EURO.

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Joint Stock Company (or Sole-owned Joint Stock Company)

A JSC is formed by one or more physical persons or legal entities. The company is liable for its obligations with its assets. If a foreign legal entity participates in the company, its certificate of registration must be presented. The minimum required capital of the JSC company under Bulgarian law is 50,000 Bulgarian leva (approximately 25,565 Euro). At the time of establishing a limited liability company, at least 25 percent or 12,500 Bulgarian leva (about 6,391 Euro) of the subscribed capital is paid in. The remaining 75 percent of the capital must be paid within the following two years.

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Sole proprietor

This is formed by one person only, who is resident in Bulgaria. The sole proprietor is a physical person and a trader, and their liability is unlimited.

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Branch of a foreign company

This bulgarian business structure is formed by a foreign company incororatered elsewhere outside Bulgaria. The branch can trade like a normal bulgarian company and its liability is guaranteed by the foreign company.

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Property Purchase Restrictions and Company Set Up

Bulgaria has restrictions on the acquisition of land by foreign individuals: a foreigner is required to register a company in Bulgaria in order to acquire land (or a building with land attached). The most adequate and commonly used type of company for that purpose is the Limited Liability Company (LLC); the Joint Stock Company (JSC) is also often used as it provides other opportunities and confidentiality. Bearer shares are allowed.

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The Legal Process of Starting a Business

According to Bulgarian legislation, all companies are registered at the Commercial Register part of the Registry Agency. The registration has effect from the entry of the company into the Commercial Register, which takes place at the submission of an application form. The application for registration needs to be reviewed and the registration in the Commercial Register completed not later than the end of the first working day following the acceptance of the application form (in practice it could take longer for this process to be completed).

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Basic steps for establishing a company:

Hold a general meeting of the partners of the company at which:

- Resolutions are passed for establishing the company;

- Articles of Association/Statute is adopted;

- management bodies are elected;

- Adopt and sign Articles of Association/Statute of the company. In accordance with the type of the business structure, the Articles of Association/Statute may have different content. Generally it includes:

- information about the name of the company (which has to be unique for the territory of the Republic of Bulgaria);
- the address of management;
- the sphere of activity of the company;
- the amount of the subscribed capital and the amount of the capital paid in the names of the partners and the way shares are distributed between them.

Pay the capital of the company into an escrow account and in the amount stated above. A banking document proving that the capital has been paid in is presented in the Commercial Register.

Submit an application for registration and a package of documents in the Commercial Register (in accordance with Bulgarian law).

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The registration is done by entering the company in the Commercial Register, which is an electronic register available online.

On registration, the company receives a unified identification code, which is unique for the territory of Bulgaria.

It is not necessary to register a company for tax or statistical purposes in order to register it with the Commercial Register because The National Revenue Agency and the Commercial Register exchange information and the trader is entered into the general register of The National Revenue Agency without the need for a separate application and paperwork.

 

After registration, the company prepares accounting documents in accordance with the Accounting act and must abide by Bulgarian tax legislation.

The Bulgarian financial year ends on 31 December and an annual tax declaration should be submitted by 31 March of the next year. The rate of the corporate tax, levied on the company's annual profit is 10 percent.


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Bulgarian company incorporation, registration, provision of legal address, formation of a representative, a branch of a foreign company, a holding, bearer shares stocks allowed, EU VAT tax number