Setting up a Business in Bulgaria by Foreign Entrepreneurs
In the heart of the Balkans, Bulgaria stands as a favorable destination for foreign entrepreneurs aiming to establish a business. The process of setting up a business in Bulgaria is streamlined and offers a plethora of advantages including low corporate tax rates and a quick registration process. This guide elucidates the essential steps and benefits that foreign entrepreneurs can avail while setting up a business in Bulgaria.
Legal Framework and Company Types
Foreign nationals, irrespective of their EU citizenship status, can register a limited liability company (LLC) in Bulgaria. The LLC is denominated as “OOD” when it involves two or more partners, and “EOOD” when there is a sole owner of the capital. The company is liable for its obligations to the extent of its assets, safeguarding the personal assets of the owners.
- EOOD (Single Owner LLC)
- Sole ownership of the capital
- Liability limited to equity participation
- Ideal for freelancers, consultants, and IT professionals
- OOD (Multiple Partners LLC)
- Requires two or more partners
- Partners share liability up to their equity participation
- Suitable for small to medium-sized enterprises
- No residency requirement for foreign nationals
- Sole or multiple ownership possibilities
- Liability is limited to company assets
The registration procedure is swift, often culminating the next business day post document submission. The process can be facilitated both in-person and remotely, albeit it is recommended for the company’s manager to be present in Bulgaria for at least a day to simplify the procedure.
Steps to Register:
- Choosing a Unique Company Name: The chosen name should be distinctive to avoid resemblance with existing business names.
- Determining the Capital Amount: The minimum capital requirement is 2 BGN (approximately 1 EUR).
- Defining Business Activities: Clearly state the business activities the company intends to undertake.
- Appointing a Managing Director: The director can be a partner, the sole proprietor, or a third person, and is appointed by the sole owner or the general meeting of the partners.
- Preparing Necessary Documents: These include a notarized consent for management, memorandum of association, and a bank letter confirming capital deployment, among others.
Advantages of Setting up a Business in Bulgaria
Setting up a business in Bulgaria comes with a host of benefits including low corporate tax and social insurance contributions, and legal avenues to reduce net profit amount.
- Corporate Tax: A favorable rate of 10%.
- Dividend Tax: A low rate of 5% on dividends and liquidation shares.
- Capital: The shares of the company can be transferred and inherited, offering flexibility in business operations.
Remote Registration for Non-Bulgarian-Speaking Entrepreneurs
For entrepreneurs not proficient in Bulgarian, the documents can be translated into a language they are comfortable with, ensuring they comprehend the contents they are signing. This translation can be facilitated through a written bilingual format or an oral translation in the presence of a notary.
- Translation: Ensuring accurate translation to maintain legal sanctity.
- Certification: The translated documents need to be certified, incurring additional costs.
Post the registration process, the company needs to apply for an EU VAT number at the National Revenue Agency, a process taking approximately two weeks. Moreover, a contact person residing in Bulgaria needs to be appointed as per the Bulgarian Measures against Money Laundering Act in some cases (for example when the shareholder of the capital is a foreign entity).
- Accounting Services: Comprehensive accounting services to manage the tax affairs of your Bulgarian company efficiently.
- Virtual Office: If leasing an office in Bulgaria is not in your plans, a virtual office service can be availed for a nominal fee.
Setting up a business in Bulgaria as a foreign entrepreneur is a straightforward process, laden with benefits that promote business growth and sustainability. Leveraging the expertise of legal teams can further smoothen the process, allowing you to kickstart your business venture in Bulgaria with ease and efficiency. It is a pathway laden with opportunities, waiting to be seized by discerning entrepreneurs from across the globe.
At our esteemed law firm, we specialize in facilitating a seamless and swift process for foreign entrepreneurs eager to establish their business in Bulgaria. Leveraging our deep-rooted understanding of the Bulgarian legal landscape and a network of proficient experts, we are adept at navigating through every step of the company setup process, from the initial registration to the intricate post-registration formalities. Our comprehensive suite of services includes assistance with document preparation, translation services, and securing a virtual office, among others. We invite you to reach out to us to experience a hassle-free business setup in Bulgaria, tailored to meet your unique needs. Contact us today to embark on a journey of business success in Bulgaria, guided by a team that is committed to your vision and objectives.