• About Bulgaria
• Company Formation
  Company Formation Advantages Bulgaria
• Accounting and Audit
• Domicile Tax Residency

Forming a company in Bulgaria involves several steps and considerations. Here’s a general guide to help you understand the process:

Types of Companies

In Bulgaria, the most common types of companies are:

1. Limited Liability Company (OOD):

- Requires at least one shareholder and one manager (who can be the same person). - Minimum share capital of 1 BGN (approximately 0.51 EUR).

2. Joint-Stock Company (AD):

- Requires at least one shareholder and a management board.
- Minimum share capital of 50,000 BGN (approximately 25,565 EUR).

Steps to Form a Company

1. Choose a Company Name:

- Must be unique and not already in use.
- Can be checked and reserved online through the Bulgarian Commercial Register.

2. Draft Articles of Association:

- This document outlines the company's activities, structure, and management.

3. Deposit the Share Capital:

- For an OOD, the minimum share capital is 1 BGN.
- For an AD, the minimum share capital is 50,000 BGN.
- The capital must be deposited in a Bulgarian bank account.

4. Notarize Documents:

- The articles of association and other relevant documents must be notarized.

5. Register the Company:

- Submit the documents to the Bulgarian Commercial Register.
- Pay the necessary fees.

6. Tax Registration:

- Register with the National Revenue Agency for tax purposes.

7. Register for Social Security:

- Register the company and employees for social security contributions.

8. Obtain Licenses and Permits (if necessary):

- Depending on your business activity, you may need specific licenses or permits.

Required Documents

- Articles of Association.
- Notarized specimen signatures of the directors.
- Bank statement showing the deposit of the share capital.
- Application form for registration.
- Declaration of the legal address of the company.

Costs

- Registration fee: Approximately 120 BGN (61 EUR).
- Notary fees: Varies.
- Accounting and legal fees: Depending on the complexity, can vary.

Timeline

- The process typically takes around 1-2 weeks, assuming all documents are in order.

Additional Considerations

- Corporate Taxation: Bulgaria has a flat corporate tax rate of 10%.
- Accounting Requirements: Companies must keep proper accounting records and file annual financial statements.
- Residency Requirement: At least one manager must be a resident of the European Economic Area (EEA), or Bulgaria.
- Virtual Office: A registered office address in Bulgaria is required.

Foreign Direct Investment

On February 22, 2024, the Bulgarian parliament passed new legislation ("the Law") by virtue of which certain categories of foreign direct investment (FDI) will be subject to screening ( "FDI Screening"). While the Law entered into force on March 12, 2024, the relevant foreign investors' obligation to file for FDI clearance will not become effective until the executive branch will have instituted additional implementing regulations. Foreign investors obligation to file for investment clearance will become effective after implementing regulations are in place.

A foreign investor intending to make a covered FDI must file for the investment's prior clearance from a new inter-agency council (the "Screening Council"). Implementing a covered FDI without first having obtained the clearance exposes the foreign investor to a fine equal to 5 percent of the investment's amount, and in any event not less than BGN 50,000 (approximately €25,000). In such cases, the Screening Council may also impose investment unwinding and other appropriate measures.

Foreign direct investment in Bulgaria in the first seven months of the year stood at 604.3 million euro, the equivalent of 0.6 per cent of the gross domestic product (GDP), statistics from the Bulgarian National Bank (BNB) showed on September 19. In the same period of 2023, FDI was 2.51 billion euro, although BNB originally reported 2.06 billion euro, which was revised upward later.

Investment in equity, including in the real estate sector, was 236.9 million euro (compared to 423.2 million euro in January-July 2023) and the BNB figures showed 853.2 million euro in re-invested earnings (compared to 2.08 billion euro for the first seven months of last year.)

Conclusion

Forming a company in Bulgaria involves several administrative steps, but it is generally straightforward and cost-effective compared to other European countries. Establishing a business requires careful planning. Working with our experts can help streamline this process, providing valuable insights and tailored strategies to ensure successful outcome. Don’t hesitate any longer. Apply to become a client today to work with our experts on legal strategies to overcome barriers.
 

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