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Registration and Formation of a Company in Bulgaria

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.

Conclusion

Forming a company in Bulgaria involves several administrative steps, but it is generally straightforward and cost-effective compared to other European countries. It's advisable to consult with a local attorney or accountant to ensure compliance with all legal and tax requirements.

Additional details and considerations for forming a company in Bulgaria:

Shareholders and Directors

- Shareholders: Can be individuals or legal entities, Bulgarian or foreign.
- Directors: At least one manager (director) is required for an OOD, and a management board is required for an AD.
- Residency: For OODs, the manager does not need to be a Bulgarian resident. For ADs, at least half of the members of the management board must be EEA residents, including Bulgaria.

Annual Obligations

- Annual General Meeting: Required for ADs.
- Annual Financial Statements: Must be prepared and filed with the Bulgarian Commercial Register.
- Tax Returns: Corporate tax returns must be filed annually.

Virtual Office and Registered Address

- Registered Address: Required for official communications and must be in Bulgaria.
- Virtual Office: Services are available for non-resident companies to fulfill the registered address requirement.

Business Environment

- Labor Market: Bulgaria offers a skilled labor force at competitive rates.
- Infrastructure: Modern infrastructure and telecommunications services are available.
- EU Membership: Bulgaria is a member of the European Union, facilitating trade and investment.

Advantages of Doing Business in Bulgaria

- Low Taxes: Flat corporate tax rate of 10%.
- EU Membership: Access to the EU single market.
- Cost-effective: Lower operational costs compared to Western Europe.
- Strategic Location: Located at the crossroads of Europe, Asia, and the Middle East.

Disadvantages and Challenges

- Bureaucracy: Administrative processes can be cumbersome.
- Language: Bulgarian is the official language, but English is widely spoken in business circles.
- Legal and Regulatory Changes: Keeping up with changes in regulations can be challenging.

Additional Services and Support

- Legal and Accounting Services: Available to help with compliance and business setup.
- Investment Incentives: Some sectors may offer incentives for foreign investment.
- Banking: Bulgaria has a stable banking sector with both local and international banks operating.

Exit Strategies

- Liquidation: A company can be dissolved through voluntary liquidation.
- Transfer of Shares: Shares can be transferred to new owners.

Summary

Forming a company in Bulgaria offers several advantages, particularly for entrepreneurs looking to establish a presence in the European Union. With a favorable tax regime, skilled labor force, and strategic location, Bulgaria provides opportunities for various types of businesses. It's essential to work with local professionals to navigate the legal and regulatory requirements effectively.
 
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