Why Open a Company in Bulgaria

At Danini Correct we are expanding our services to all investors, both local and foreign, who decide to establish a company in Bulgaria. Our goal is to guide you through the intriguing financial details of the business, ensuring compliance with the mandatory steps and regulations applicable to all investors.

Foreign investors planning prolonged stays in Bulgaria for business operations face additional requirements, such as obtaining the necessary visa and applying for permanent status if intending to stay in the country for an extended period. Our specialized assistance becomes crucial, especially for those facing difficulties due to the language barrier while exploring diverse investment opportunities in Bulgaria.

Our firm is geared to support entrepreneurs planning to open a company in Bulgaria, whether in Plovdiv, Sofia, or any other city in Bulgaria. Below, we explain the main types of companies in Bulgaria, as well as the general process for registering the chosen legal entity.

Types of Companies in Bulgaria

Foreign investors have the option to choose from various types of commercial organizations when opening a company in Bulgaria. Although the most popular type is a limited liability company, we provide detailed information on all other types of organizations that can be registered in Bulgaria:

  • Sole Proprietorship or Sole Trader
  • Limited Liability Company
  • Joint-Stock Company
  • Limited Partnership
  • General Partnership

Foreign companies can also establish a branch or representative office. Each type of commercial organization has its characteristics and advantages, depending on the nature and size of the business. The limited liability company (LLC) is the preferred type of business, as it has relatively low capital requirements, only two Bulgarian levs, distributed in shares of at least one Bulgarian lev. One of the peculiarities of this type of company is that its shares cannot be traded publicly, although this is possible with joint-stock companies. LLC is suitable for small and medium enterprises and, according to the law, must have a designated manager.

The joint-stock company is more suitable for those who want to start a business in Bulgaria as a large enterprise, as there are no restrictions on share transfer. However, this type of company has more complex management and different requirements for operations and transparency. It may have registered shares and ordinary shares and has different requirements for the minimum share capital, which is significantly larger, as described below by our lawyers.

Partnerships in Bulgaria are distinguished by the degree of partners' liability. In a general partnership, all involved parties share full responsibility, while in a limited partnership, only one must be subject to unlimited liability. Informed investors willing to share profits, as well as contribute their management skills to the business, may prefer this type of business.

The branch and representative office are two forms of business suitable for foreign companies wishing to enter the Bulgarian market. The actions of the representative office are limited and cannot engage in any trade or commercial activities but can be used for marketing and research purposes before the actual registration of the company in Bulgaria. The branch will remain dependent at all times on the parent company abroad and will usually have lighter management requirements in Bulgaria.

Requirements for Opening a Business in Bulgaria

According to the Bulgarian Commercial Code, foreign investors, including EU entrepreneurs, can start business ventures in Bulgaria, subject to the same requirements as local investors. Notable exceptions include the minimum share capital requirements for joint-stock companies.

Our teams assist in navigating the complexities of the registration process, including preparing and notarizing articles of association, depositing the share capital, submitting the application form to the Bulgarian Trade Registry, and managing VAT registration and social insurance obligations.

Upon successful registration, companies must obtain the necessary permits and licenses for their specific industry, a task our legal team adeptly handles on behalf of our clients.

Trading Name Reservation in Bulgaria

Choosing a trading name is a crucial first step in the registration procedure. We guide our clients through the requirements and reservation process, ensuring a swift and efficient company registration. Our lawyers can manage the procedure seamlessly, even in the client's absence, with appropriate power of attorney.

Bank Account Opening – A Mandatory Step!

Regardless of share capital requirements, establishing a Bulgarian corporate bank account is mandatory for conducting business operations. Our legal team provides advice on choosing a suitable bank, considering the financial operations of the business.

Whether you are initiating a company or seeking to open a bank account as a foreigner, our law firm offers comprehensive support and guidance throughout the process.

Legal Address Requirements in Bulgaria

Determining the legal address is a crucial task in the company establishment process. Our firm assists in navigating options, including rental agreements, owned properties, or cost-effective virtual office services. We streamline the submission of proof of the registered address, alleviating this time-consuming aspect of company formation.

Share Capital Requirements for Business Registration

Understanding share capital requirements is pivotal when deciding to open a company in Bulgaria. Our team provides insights into the minimum amounts mandated by the Company Law, helping investors align their capital with business goals.

At present, only legal forms that require a minimum share capital are public limited liability companies, which must have at least 50,000 Bulgarian leva (or the equivalent in euros, approximately 26,000 euros) as capital.

There are also specific requirements for the share capital depending on the industry in which the company will operate. In this case, the minimum amount required is imposed by the government agency representing the respective industry. Nevertheless, it is recommended to create a business plan to determine how to establish the minimum amount needed to achieve your business goals.

Investors from non-EU countries, who wish to establish companies in Bulgaria, can also apply for the residency program through investments, allowing relocation to the country. You can rely on us if you are interested in immigration through investments here.

Low Corporate Taxes and Employment Costs

Bulgaria's advantageous tax regime, with a corporate income tax rate of 10%, positions it as an attractive destination for business. Our legal experts navigate the intricacies of corporate taxation, providing clarity on double taxation agreements and other considerations.

Furthermore, Bulgaria has signed agreements to avoid double taxation with countries such as the United Kingdom, Turkey, or Russia. This means that a company operating in both Bulgaria and another treaty country will only pay taxes in the country where the income originates.

Additional expenses related to opening a company in Bulgaria are associated with salaries and social insurance contributions for employees. However, the country has a lower minimum wage compared to other EU countries, as well as low social insurance costs, even for well-trained personnel (19.62% for the employer and 13.78% for the employee).

Support for Investments in Specific Sectors

Bulgaria is one of the Eastern European countries that has made significant progress in various industries. Examples include the information technology and tourism sectors. Both sectors, along with others, attract foreign direct investments, and entrepreneurs find that not only does the country offer favorable ownership regimes for foreign companies, but also lower business and employment costs compared to other European states.

The government provides incentives for initial investments in sectors such as renewable energy production, computer technology, research and development, education, or healthcare. These promotions aim to encourage foreign businesses to invest in these specific areas.

Other attractive sectors in the Bulgarian business market include electrical engineering, machinery, electronics, automotive parts manufacturing, and the chemical industry. Companies operating in these selected sectors may need to obtain specific permits. Examples of such sectors include the chemical industry, food and agriculture, tourism, machinery, and others.

Competitive Advantages of the Bulgarian Market

Bulgaria boasts numerous advantages that recommend it as a business-friendly destination, including:

  • One of the lowest operational costs in the EU.
  • Highly qualified labour force.
  • Very low overall monthly compensations.

Companies in Bulgaria often opt for current accounting practices due to the cost-effectiveness. However, it is common for businesses to choose annual accounting services, a practice allowed by Bulgarian legislation.

Why Open a Company in Bulgaria

The strategic location of Bulgaria, business opportunities, low costs, and a skilled workforce make it an attractive choice for investors. Our immigration lawyers are available to assist foreign investors interested in relocating to Bulgaria, providing guidance on various paths, including citizenship through investments.

Streamlined Registration Process

Danini Correct recognizes the importance of a simplified registration process. Our legal expertise ensures a smooth company registration experience, with minimal required capital and a defined timeline for efficiency.

Using power of attorney, we provide users with the flexibility to complete the registration process without physical presence in Bulgaria. We emphasize the lack of operational costs for inactive companies, along with a clear and easy process for annual tax declarations.

Investment and Economic Outlook in Bulgaria

Our firm acknowledges Bulgaria's resilience amidst global challenges, anticipating economic recovery and a reduction in unemployment. Projected GDP growth in the country makes it an opportune time for investments.

Opening a business in Bulgaria with assistance from Danini Correct provides access to a favourable financial environment, offering simplicity, low costs, and strategic accounting advantages. Our experts are dedicated to supporting your entrepreneurial journey and providing comprehensive assistance for your revenues at every level.

Follow the correct accounting advice on how to invest your budgets correctly in Bulgaria at www.daninicorrect.com

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