Whether you’re a local or overseas investor, the steps and regulations to setting up a business in Bulgaria are identical. However, foreign investors must adhere to visa requirements and apply for residency when they plan on settling down in the country for an extended period while managing their enterprise.
Bulgaria has streamlined the company formation process, making it easier than ever to incorporate a business. This one-stop shop eliminates any unnecessary hassle and allows for rapid incorporation! Despite the language being a barrier, international investors who plan to explore the various investment opportunities in Bulgaria may benefit from specialized assistance. Those wishing to open a company in Sofia or another Bulgarian city can contact a law firm located within the country.
Types of Businesses in Bulgaria
Bulgaria recognizes the following business structures: unlimited (general) partnerships, limited partnerships, private limited companies, single-person private limited companies, public limited partnerships, public limited companies (joint-stock companies), sole traders, joint ventures, branches, holding companies, corporations, and representative offices.
The Private Limited Company, the most common business type, needs at least two associates. A single chairperson is required in the case of a single-person private limited company. Shares must cost a minimum of 1,95581 BGN per share and have a minimum capital requirement of 50,000 leva (1 Euro). Liabilities of partners are restricted to the amount contributed.
For the corporation, there must be at least two shareholders. A minimum investment requirement is 1 million leva, and a public subscription requirement is 5 million leva. The business is accountable for its possessions and to its creditors.
A minimum of two partners are needed to form a partnership company. Liabilities are joint and several, and a capital requirement of 2 BGN is necessary.
A minimum of two members are required to form a limited partnership company: a sponsor and a partner. No minimum capital requirement exists, and joint and several liabilities apply to partners. Sponsors’ obligations are restricted to the contributions made.
And finally, at least three sponsors and two partners are needed for a partnership limited by shares. Sponsors and partners must contribute a minimum of 1 million leva, and their obligations are only as great as what they have contributed.
Requirements to start a business in Bulgaria
According to the Bulgarian Commercial Code, establishing a business in Bulgaria is just as straightforward for foreign investors as it is for local ones. Except when registering a joint-stock company, there are no exceptional requirements. The least amount of share capital needed to fund this type of corporation is 50,000 BGN; however, if the company is listed on the Stock Exchange, then that number escalates to 100,000 BGN. Limited liability companies can have one shareholder and director at minimum, but joint-stock firms must involve two shareholders plus a management board.
For non-resident foreign investors, EU entrepreneurs need not worry about obtaining a visa to stay in Bulgaria – they can enter the country using their identity card or passport and remain for up to three months. This is normally enough time for international company owners to manage their business affairs. For third-country nationals, the general visa requirements in other European Union countries also hold for Bulgaria. Nevertheless, investors from these nations can procure a permanent resident status by investing substantially in Bulgarian assets such as company stocks and bonds. Our Bulgarian attorneys can offer more information if you want to gain permanent residency through this investment method.
5 Steps to company registration in Bulgaria
Step 1: Choose a Name for the Company
Choosing the right name for your business is crucial in launching your venture. It must be memorable, distinct, and available to register before you begin the registration process (which isn’t mandatory but could be beneficial). Before settling on a company name, certain parameters should also be considered.
Step 2: Escrow Bank Account Registration
To properly register your legal entity, you must open an escrow account at a Bulgarian bank. This initial step is necessary and by the country’s laws and regulations.
Step 3: Business Address
The next integral step in establishing your company is registering the address. This must be a Bulgarian one for it to meet legal requirements.
Step 4: Registration in the Government Official Register
As per Bulgarian regulations, all new businesses must be documented in the public Official Commercial Register to ensure legal compliance.
Step 5: Stamp Registration
After officially registering your business in Bulgaria, having a stamp of approval is essential and mandatory. The stamp is an official endorsement for all the formal activities associated with your venture. Although it’s an extra step after you’ve registered, this registration process is necessary to ensure smooth operations and success.
Whether local or foreign persons are part of the ownership team, registering a company in Bulgaria follows the same procedure.
As per Bulgarian legislation, there are no limitations regarding the amount of foreign ownership in a local business. Consequently, up to 100% of the capital associated with a Bulgarian enterprise can be owned and operated by international entities.
Registering a limited liability company in Bulgaria requires only 2 BGN (1 EUR) of capital, and the entire process is finished within two weeks.
It is essential to note that Bulgaria does not discriminate against foreign firms regarding corporate laws. Thus, a foreigner who registers a company here enjoys the same benefits and has access to the same opportunities as any locally owned company. This demonstrates that no unfair practices are being applied in this country, helping you feel reassured knowing your business will be treated equitably regardless of ownership or origin.
Before hiring a consultant to assist you with registering your business, take the time to do some research and make sure they have experience in this field. As an extra precaution, ask for their work and services references to ensure you make the right decision.
In Bulgaria, establishing a business typically takes one to three weeks. Partners must first gather before a public notary to define the company’s status, adopt the company constitution, and establish the hierarchy. The founder will then sign the notarized contract. The declaration of incorporation will then be made into a certified copy. There are 5 leva in fees. Keep in mind that these formalities must be finished in one day.
The company’s founder or any other authorized person must open a business bank account in the company’s name. The paid capital is put on hold until the Commercial Register approves the company’s formation. The Commercial Register must see the receipt issued upon opening the bank account. Be aware that depending on the bank chosen, fees for opening a bank account can range from 10 to 30 leva.
The company must then complete an A4 registration form with the Commercial Register. According to Articles 141 and 142, paragraph 8 of the Trade Act, and Article 13, paragraph 4 of the Commercial Registration Act, two affidavits signed by each director and notarized are also required.
Additionally, the following records will be required:
- the certificate of incorporation of the business
- the decree appointing cadres
- specimens of coworkers’ signatures that have been notarized
- the confirmation of account opening from the bank
Remember that you can submit these documents electronically for 80 leva or physically for 110 leva. A maximum of four days should pass between procedures.
These should take up to 15 days at the level of the Commercial Register.
Companies with a turnover of more than 50,000 BGN must register for Value Added Tax (VAT) with the Commercial Register, as this institution collaborates with the National Revenue Agency. As a result, pertinent data will be automatically shared between these two authorities.
The Accounting Act must be followed when reporting the company’s accounts. These have to adhere to Bulgarian tax laws.
- www.brra.bg Commercial Register
- www.investbg.government.bg is the website of the Invest Bulgaria Agency.
- Visit www.investbulgaria.com to invest in Bulgaria.