Do you intend to establish a business in Bulgaria?
Here is a list of prerequisites to fulfil and associated steps to take.
It is best to be knowledgeable about the requirements to be met and the associated processes when it comes to opening a business in a foreign country. South-East European nation Bulgaria is very welcoming to foreign investment. Over the years, numerous foreign nationals, particularly those from European countries, have built successful enterprises in China as a result of financial assistance and simple regulations. Foreign investment is actually not restricted, but you must have a tax address to be authorized to do so. In actuality, after the company has been established, the tax address can be changed or created by a third party.
Types of businesses
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 type of business, needs a minimum of two associates. A single chair person 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. There is no minimum capital requirement, and joint and several liability applies 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.
Nice to know
For their part, auto-entrepreneurs must establish a limited liability company, and to do so, they must have a monthly income of at least 420 leva.
In Bulgaria, establishing a business typically takes two to three weeks. In order to jointly define the status of the company, adopt the company constitution, and establish the hierarchy, partners must first gather in front of a public notary. The notarized contract will then be signed by the founder. 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 founder of the company or any other authorized person must then open a business bank account in the company’s name. The paid capital is then put on hold until the Commercial Register approves the company’s formation. The Commercial Register must see the receipt that was 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 in order to register 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.