Company registration in Bulgaria

The limited liability company is a preferred form of business entity because of the minimum capital requirement of BGN 2, the limited liability of the shareholders to the amount of the registered capital and simplified corporate governance structure. Shares may be transferred and inherited. The transfer of company shares to third parties requires the prior approval of the company general meeting. Transfer of shares should be performed by means of a notarized contract entered in the commercial register.

The governance structure of a limited liability company consists of: General meeting of shareholders;Manager(s) who manage and represent the company before third parties. There are no restrictions for foreigners to be appointed managers of the company.

Legal framework – The Commerce Act; Commercial Register Act

Competent authority – The Commercial Register with the Registry Agency

Procedure:

1. Check in the electronic register of the Commercial Register and/or reservation of a business name;
2. Holding of an Incorporation Meeting, adoption of a Memorandum of Association or an Act of Incorporation, appointment of managing director/s;
3. Depositing the company capital into a special capital raising account (the minimum capital amount is BGN 2)
4. In case of any specific business, an authorisation by the competent authority shall be provided when filing the documents with the Commercial Register.

Required documents:

Application for registration; Memorandum of Association or Act of Incorporation; Minutes of the Meeting of Incorporation of a company; notarized specimen signatures of all appointed managing directors; declaration pursuant to Article 142 of the Commerce Act signed by each of the appointed managing directors; declaration pursuant to Article 141, paragraph 8 of the Commerce Act signed by each of the appointed managing directors; certificate of the deposited capital issued by the bank; resolution of the body managing and representing a member who is a legal entity; excerpt from the relevant business register regarding a member who is a foreign legal entity; document evidencing payment of the state fee for incorporation of a limited-liability company; declaration under Article 13, paragraph 4 of the Commercial Register Act signed by the applying managing director; the relevant license or permit according to any special law on the performance of a specific business.

The minimum registered capital required for the formation of joint-stock company of BGN 50,000 (approximately 26,000 Euros). A typical feature of the joint-stock company is the lack of regulations on the transfer of shares and the lack of ownership of the shareholders in the company. The corporate governance structure of the joint-stock company consists of: General meeting of shareholders; Board of directors (in case of a one-tier management system) or a Supervisory board and Management board (in case of a two-tier system). There are no restrictions for foreigners to be appointed managers of the company. The time required for entry or deletion in the commercial register of commercial companies is the end of the first working day following filing of the required documents. On requests for registration of new circumstances, the registrars are obliged to act immediately.

Legal framework – The Commerce Act; the Commercial Register Act

Competent authority – The Commercial Register with the Registry Agency

Procedure:

1. Check in the electronic registry of the Commercial Register and/or reservation of a business name;
2. Holding of a Meeting of Incorporation, subscription of shares by the founders, adoption of Articles of Association or an Act of Incorporation, election of a Supervisory and Managing Boards, respectively of a Board of Directors;
3. Depositing the company capital into a special capital raising account (the minimum capital amount is BGN 50 000);
4. In case of any specific business, an authorisation or license by the competent authority shall be provided when filing the documents with the Commercial Register.

Required documents:

Application for registration; Articles of Association or Act of Incorporation; Minutes of the shareholders’ Meeting of Incorporation; attendance list of the incorporation meeting; list of the subscribers of shares at the incorporation meeting; declaration pursuant to Article 160, paragraph 2 of the Commerce Act; specimen signature of an executive director; declaration under Article 234, paragraph  2 and paragraph 3 of the Commerce Act; declaration under Article 237 of the Commerce Act; minutes from a meeting of the Board of Directors; certificate of the deposited capital issued by the bank; resolution of the managing body representing a shareholder who is a legal entity; excerpt from the relevant business register regarding a shareholder who is a foreign legal entity; document evidencing payment of the state fee for incorporation of a company; declaration under Article 13, paragraph 4 of the Commercial Register Act signed by the applying managing director; the relevant license or permit according to any special law on the performance of a specific business.

A commercial legal entity who has the right to perform commercial activity under their national law may register a branch in the Commercial Register. The branch is not considered a separate legal entity. The branch is not required to have any paid up capital or separate governance structure. Its assets and liabilities are considered assets and liabilities of the mother company.

Foreign persons authorized to do business under their national law, may establish a representative offices in Bulgaria. A representative office is registered at the Bulgarian Chamber of Commerce. The representative office is not a separate legal entity and can not carry on business activity. Thus, the purpose of the representative office is to perform activities such as promotions, exhibitions, demonstrations, training and advertising of products or services.

Legal framework – The Investment Promotion Act

Competent authority – The registration body is the Bulgarian Chamber of Commerce and Industry.

Procedure and required documents:

Official registration document of the foreign person issued by the relevant competent authority as per its national legislation; official document regarding the persons managing and representing the foreign person; resolution of the managing body of the foreign person for opening a representative office in Bulgaria; special notarized original power of attorney issued by the person/s/ representing the company for the person authorised to register and manage the representative office in Bulgaria specifying the powers granted to the latter; original specimen/s/ of the signature/s/ of the person/s/ being representative/s/ in Bulgaria, whether by virtue of law or by special authorisations, certified by a notary public; document evidencing payment of the registration fee for the representative office; completed registration card for the IT system of the Bulgarian Chamber of Commerce and Industry.

Legal framework – The Bulstat Register Act

Competent authority – The registration offices of the Registry Agency seated at the district courts

Procedure and required documents:

The Bulstat Register is used for registration of branches of foreign persons that are not business entities, representative offices of foreign persons registered at the Bulgarian Chamber of Commerce and Industry. The documents required for the registration are the following: certificate of registration/registration with the Bulgarian Chamber of Commerce and Industry; copy of the resolution for appointment of the person managing and representing the entity; filled in application form for registration provided by the Bulstat Register.

The following categories of foreign persons are also subject to registration and shall be issued the ID card and ID code (Bulstat code):

– foreign legal entities which carry out a business in Bulgaria or whose effective management is located within the country, or that own real property in the country; as well as

– foreign natural persons who have no Bulgarian personal ID number or a foreigner’s personal ID number and conduct a business or provide independent private services in Bulgaria, including by a permanent establishment, or own real property in the country, or are social security contributors;

Source: Invest Bulgaria Agency

Bulgaria offers one of the most favorable tax regime in the European Union.

• 10 % corporate tax; 0% in high unemployment regions;
• 10% personal income tax;
• 2 – year VAT exemption on equipment imports for investment projects over € 5 million and projects creating at least 50 jobs;
• 2 -year amortization of computers and new production facilities;
• deductibility of costs for research and development;
• 5% withholding tax on dividends and liquidation quotas (0% for EU companies);

All registered companies in Bulgaria have the opportunity to benefit from these advantages, which contributes highly for foreign investors who want to create business in the country.