This article will explore the step-by-step process of setting up a company in Bulgaria, showing how this stunning Balkan country can revolutionize your financial and personal growth.
By the end of this article, you’ll understand the requirements, processes, and benefits of starting a company in this promising European state.
Bulgaria has quickly become a sought-after destination for savvy investors, entrepreneurs, and travelers. Its strategic location, growing economy, and favorable tax policies make it an attractive opportunity for those seeking to expand their business ventures and improve their lifestyle.
But why should you establish a business in Bulgaria? The country offers numerous advantages, such as low corporate tax rates, easy access to European markets, and a skilled labor force – all at a fraction of the cost of Western European countries.
Ready to unlock your business’s full potential and embrace the benefits of global expansion? Contact Nomad Capitalist, and our experts will guide you through establishing a robust international presence, paving the way for success in the worldwide market.
Bulgaria: An Overview
Bulgaria is a southeastern European country that shares borders with Romania, Serbia, North Macedonia, Greece, and Turkey. Its strategic location provides easy access to various markets, making it a desirable hub for business expansion.
The country has a population of approximately 7 million people with a diverse and highly skilled workforce ready to contribute to business growth. Bulgaria fosters entrepreneurship, innovation, and competitiveness, creating a favorable business climate.
Bulgaria’s stable macroeconomic indicators and promising GDP growth make it a popular destination for foreign investment. Factors that contribute to its attractiveness include low corporate tax rates, well-developed infrastructure, and a supportive legal framework for business owners.
Additionally, Bulgaria has a significantly lower cost of living and doing business compared to Western European countries.
These factors make Bulgaria an enticing destination for investors seeking to diversify their portfolios and establish a strong presence in the European market.
Is Bulgaria a Good Place to Start a Business?
Business Opportunities & Industry Sectors
Bulgaria is a popular jurisdiction for new company formation with many business opportunities. Popular industry sectors include the chemical industry, electronics, engineering, and human health care.
Ease of Setting Up a Company
You can create a joint stock company, limited liability company, or representative office with relative ease. Bulgarian law mirrors that of EU legislation, and company registration takes days rather than weeks.
Low Taxes and Social Insurance Costs
Bulgaria has the lowest corporate income taxes and social insurance costs in Europe. The country guarantees political stability, is a full member of the EU, WTO, and NATO, and has the second-lowest level of government debt in Europe.
Bulgaria offers affordable rents, excellent real estate bargains, and a skilled and multilingual workforce. The country’s strategic location and fast internet connections make it accessible from major European cities.
What Are the Requirements to Set Up a Company in Bulgaria?
To start a business in Bulgaria, you must follow the steps of the company incorporation procedure after confirming the availability of your chosen company name:
1.) Contact local lawyers
After executing the minutes of the constituent meeting of the shareholders in the Limited Liability Company (OOD in Bulgarian), you will need to get a notary-certified statement of consent and signature specimen of the manager and a certified copy of the articles of incorporation of the LLC.
Managers must sign and submit the following affidavits:
a.) Affidavit under Article 141 of the Commercial Act, declaring that:
- They have not been declared bankrupt or managed or been on the board of a company dissolved due to bankruptcy during the two years before the date of the resolution declaring the bankruptcy if there are unsatisfied creditors left.
- They have not managed or been on the board of a company that has failed to comply with their obligations for the establishment and storage of the determined levels of reserves under the Bulgarian Law on Reserves of Oil and Oil Products.
b.) Affidavit under Article 142 of the Commercial Act declaring that:
They will not, without the prior consent of the company, enter into commercial transactions either in his/her personal capacity or on behalf of third parties; participate in general partnerships, limited partnerships, or limited liability companies; or occupy positions in the managing bodies of other partnerships or companies where these activities are similar
to those of the company.
c.) Affidavit under Article 13, paragraph 4 of the Commercial Register and Register of Non-Profit Legal Entities Act declaring that:
- Their circumstances, as would be applied for registration in the Commercial Register, are genuine and true.
- This procedure takes a day to complete, and a law firm will charge you BGN 5 (€2.50 or $2.75) to process.
2.) Deposit capital in a local bank account
Keep in mind the following when depositing an amount in your bank account:
- Bank account must be opened by the manager or authorized person with notary-certified power of attorney.
- Company’s capital remains blocked in the bank account until registry decides on company registration.
- Minimum capital of BGN 2 (1€) required by Commercial Act to be deposited before incorporation.
- Bank issues certificate proving shareholders’ deposit of capital, which must be presented at registry.
- Setting up corporate bank account takes about a day and costs between BGN 10 and 30 (€5 and €15 or $5.51 and $16.52).
3.) Register with the Commercial Register at the Registry Agency
Secure company registration by using a Standard Application. Attach the following documents to the application:
- Articles of association
- Resolution for setting up a new company and appointing manager(s)
- Notary-certified consent and signature specimen of manager(s)
- In the case of a founding foreign legal entity, a certificate of good standing that its local registry has issued
- Bank certificate for deposited capital.
The following affidavits by each of the appointed general managers of the company must also be attached:
- An affidavit under Article 141 paragraph 8 of the Commercial Act, an affidavit under Article 142 of the Commercial Act, and an affidavit under Article 13 paragraph 4 of the Commercial Register and Register of Non-Profit Legal Entities Act.
- The Bulgarian Measures against Money Laundering Act obligates all legal entities, including newly-established companies, to register their ultimate beneficial owner/s with public registries. Companies whose beneficial owners are physical persons registered as shareholders in the commercial register do not need to submit this special declaration about beneficial owners.
This registration procedure takes two days and costs BGN 55 (€28) for electronic registrations and BGN 110 (€56) for hard-copy applications.
4.) Register for VAT with the National Revenue Agency
Within a week of submission of the application for VAT registration, the Revenue Agency performs a check of the grounds for registration. Once the grounds for registration are examined, they issue a decision on VAT registration within 7 days.
In practice, VAT registration takes around 12 days.
There is no charge for this stage of the company formation process. VAT registration is mandatory where the 12-month turnover exceeds BGN 50,000 (€25,000 or $27,533.25) (this threshold will be raised in the near future to BGN 100,000 (€50,000 or $55,069.50).
5.) Purchase a cash register from an authorized seller and register this fiscal device
Once foreign investors have purchased the fiscal device from an authorized seller, representatives of the authorized seller install the device. After installation at the premises of the company in Bulgaria, the National Revenue Authority carries out an electronic registration of the cash register.
The price of this technology ranges from 50 BGN to 300 BGN (€25 to €150 or $22 to $165.21). This part of the company formation process takes two days.
6.) Register employment agreements with the National Revenue Agency (NRA)
The Bulgarian company needs to register employment agreements with the NRA within three days of the conclusion of the employment agreement. This new company in Bulgaria must include the following details:
- Employer’s name and Unified Identification Number (UIC), the number given by the NRA to the employer in its capacity as insurer
- Employee’s full name and Personal Identification Number, the Service Number given by the NRA
- The main terms of the employment agreement (legal grounds for the conclusion of the employment agreement, date of conclusion, term of the agreement (if any), basic salary, name of the position).
A private limited liability company owned by two or more partners can register employees with NRA either online, by post, or in person.
After these submissions, the NRA shall issue a reference note indicating those (if any) that have not been accepted, accompanied by the reason for non-acceptance.
The reference note shall be certified by an official of NRA and shall be presented to a representative of the employer, or it shall be sent by registered mail or email.
This process typically takes one day or less and may not involve any charges.
7.) Register Commercial Premises of the Limited Liability Company
In Bulgaria, companies are required to register the working hours of their commercial sites with the local mayor. This involves submitting various documents, including an opinion from the regional health inspectorate, as well as any other requirements specified by the mayor. These include a certificate for registration under the Foods Act if involved in the production or distribution of food.
Setting up a company in Bulgaria can prove an advantageous opportunity for entrepreneurs and investors seeking to expand their horizons. By leveraging the country’s strategic location, competitive tax environment, and skilled workforce, you can propel your business to new heights while enjoying its cultural richness and natural beauty.
This ultimate guide has provided valuable insights into establishing your company in Bulgaria. However, navigating the complexities of international business can be challenging. That’s where Nomad Capitalist can help.
As experts in the field, we specialize in helping entrepreneurs and investors internationalize their businesses, optimize their tax strategies, and embrace the global lifestyle. With our personalized approach and wealth of experience, we’ll guide you every step of the way, ensuring a seamless and efficient company setup process in Bulgaria.
Don’t miss out on the opportunity to grow your business and enhance your global lifestyle. Contact us today and let our team of professionals help you make the most of the nomad capitalist lifestyle.
Bulgarian Company Start-Ups FAQ
The LLC (OOD) and the single shareholder SMLLC (EEOOD). They are typically small and medium businesses.
A Joint Stock Company (JSC/AD) is another way of establishing a business in Bulgaria. There are no legal limitations on the transfer of shares and shareholders need not engage in the running of the business. The joint stock company is a better option for larger companies.
It is also the best way to protect personal assets. A sleeping partner can sleep easy on this front.
The minimum capital required for a closed joint stock company formation is 50,000 BGN (25.000€). Sole traders are known as ET and are natural persons with an extended business capacity. However, their personal assets are at risk in the event of insolvency.
A trade representative office is a way for a foreign company to operate in Bulgaria. Foreign investors can run their businesses abroad. Under the terms of the Bulgarian Trade Law, foreign companies can open branches in Bulgaria. The Bulgarian Chamber of Business charges a registration fee for these branches, which are an extension of the foreign legal entity.