Financial Institution Registration (Art. 3a of the Credit Institutions Act)

What Is a Financial Institution under Art. 3a CIA?

A financial institution is not a bank and cannot accept deposits from the public. Unlike credit institutions, financial institutions are subject to a registration-based, not license-based regime — they do not receive a banking license but are entered in the BNB register following a compliance assessment.

The legal framework is contained in Art. 3a of the CIA and BNB Ordinance No. 26 on financial institutions. Registration is mandatory when the financial activity constitutes a significant (material) part of the company’s activity.

When is the activity considered "significant"?

Under Ordinance No. 26, the activity is considered significant when revenue from financial activities under Art. 3a of the CIA represents 30% or more of the total revenue of the company for the preceding financial year, or when the volume of financial assets exceeds 30% of total assets. For newly established companies, the assessment is made on the basis of the business plan.

Permitted Activities (11 types)

Under Art. 3a(2) of the CIA, the financial institution may carry out one or more of the following activities:

• 1. Financial leasing — leasing assets with an option to purchase or transfer ownership
• 2. Guarantee transactions — issuance and confirmation of guarantees and assumption of other commitments
• 3. Trading in foreign currency and precious metals — buying and selling currency and gold/silver for own account or on behalf of clients
• 4. Currency brokerage — brokerage activity on the foreign exchange market
• 5. Factoring and forfaiting — acquisition of receivables arising from the supply of goods or provision of services, and assumption of the risk of their collection
• 6. Issuance of electronic money — subject to PSPSA requirements (requires an additional EMI license)
• 7. Acquisition of shareholdings — acquisition of shares or stakes for investment purposes
• 8. Granting of loans with funds not raised through public deposit-taking — lending with non-bank funds (peer-to-peer lending, microlending)
• 9. Payment services — within the meaning of the PSPSA (requires an additional PI license)
• 10. Traveller's cheques, letters of credit, and bills of exchange — issuance and management of traditional payment instruments
• 11. Investment services — under the Financial Instruments Markets Act

Capital Requirements

The minimum capital varies depending on the type of activity, pursuant to Ordinance No. 26:

The capital must be fully paid in cash. For a combination of activities, the higher capital threshold applies. For newly established companies carrying out several types of financial activities, the overall minimum capital is BGN 1,000,000.

Legal Form and Management Requirements

Permitted Legal Forms

• LLC / SLLC — Limited Liability Company / Single-Member Limited Liability Company
• JSC — Joint-Stock Company
• LPS — Limited Partnership with Shares

Requirements for Management Members

Under Ordinance No. 26, members of the management body of the financial institution must meet the following requirements:

• Higher education in the field of economics, law, finance, or information technology
• At least 3 years of professional experience in the field of economics, finance, law, or information technology
• Clean criminal record — no convictions for intentional crimes of a general nature
• No declaration of insolvency in the last 2 years
• Must not appear on counter-terrorism lists under the Counter-Terrorism Financing Act

Registration Procedure

The registration application is filed with the Deputy Governor of the BNB heading the Banking Supervision Department, under Ordinance No. 26. Documents are submitted in electronic and hard copy.

Required Documents

• Application form as per the BNB template
• Articles of Association / Partnership Agreement (certified copy)
• Certificate of current registration from the Commercial Register
• Ultimate beneficial owner (UBO) documents and ownership structure
• Management CVs and qualification documents
• Business plan with description of activities and financial projections
• Internal rules for the prevention of money laundering under the Anti-Money Laundering Act
• Source of capital documents
• Criminal record certificates
• Declarations as per the BNB template

Fee

The application review fee is BGN 3,000 (three thousand leva), deposited into the BNB’s account.

Review and Decision

The application is reviewed by the Banking Supervision Department of the BNB. In the event of deficiencies or irregularities, the BNB sends a request for additional information. Following a positive opinion, the financial institution is entered in the public register of financial institutions maintained by the BNB.

Ongoing Obligations after Registration

Reporting to the BNB

• Quarterly financial reports — filed electronically with a qualified electronic signature (QES)
• Annual financial report — certified by a registered auditor, filed by 30 June of the following year
• Annual activity report — includes information on the volume of transactions, number of clients, risk indicators
• Electronic filing — all reports are filed through the BNB’s information system using a QES

BNB Inspections

The BNB has the right to conduct on-site inspections (verification inspections) to verify compliance with regulatory requirements. Inspections may be scheduled or unscheduled.

Notification of Changes

The financial institution is obliged to notify the BNB of any change in the circumstances under which the registration was carried out — change of management, ownership, address, type of activity, etc.

Differences from Banks and Payment Institutions

The public register of financial institutions is available on the BNB website and contains up-to-date information on all registered companies, their activities, and management bodies.

Frequently asked questions