Your Three Options: Liquidation, Sale, or Dormancy
You have a Bulgarian EOOD you no longer need. Maybe your business model changed, you're leaving Bulgaria, or the company simply ran its course. Whatever the reason, you can't just walk away — there are legal obligations and real consequences for getting this wrong.
You have three options, each suited to different situations:
| Option | Timeline | Best When |
|---|---|---|
| Voluntary Liquidation | 8–10 months minimum | Company has no buyer, you want a clean permanent closure |
| Sale of EOOD | 2–4 weeks | Company has value (VAT registration, contracts, clean history) |
| Dormancy | Immediate | You might reactivate later; temporary pause |
Most common choice: Voluntary liquidation is the standard route for foreign entrepreneurs closing a Bulgarian EOOD. It's the only option that permanently removes the company from the Commercial Register and ends all ongoing obligations. If you don't plan to use the company again and can't find a buyer, this is the path.
Voluntary Liquidation: Step-by-Step Process
Voluntary liquidation (доброволна ликвидация) is governed by the Bulgarian Commercial Act (Търговски закон), Articles 266–274. Here's exactly what happens:
Shareholder Decision to Liquidate
As the sole owner of the EOOD, you adopt a written decision to dissolve the company and appoint a liquidator (ликвидатор). The liquidator can be you (the owner), the current manager (управител), or a third-party professional. The decision must include the liquidation start date and the liquidator's details. This decision needs to be notarized.
File with Commercial Register + Publish in Commercial Gazette
File an application (Form B6) with the Commercial Register (Търговски регистър) at the Registry Agency. The filing includes: the dissolution decision, liquidator appointment, specimen signature of the liquidator, and a declaration under Article 142 of the Commercial Act. Upon registration, the company name changes to include "в ликвидация" (in liquidation). A notice is also published in the Commercial Gazette inviting creditors to submit their claims.
6-Month Creditor Notification Period
This is the part that makes liquidation slow. From the date the invitation to creditors is published in the Commercial Gazette, you must wait a minimum of 6 months before proceeding. During this period, the liquidator must also notify all known creditors individually by written notice. Any creditor claims received must be addressed — either paid or disputed. This period cannot be shortened.
Final Balance Sheet and Asset Distribution
After the 6-month period expires, the liquidator prepares a final liquidation balance sheet, a report on the liquidation activity, and a proposal for distribution of remaining assets. All outstanding liabilities must be settled first. Only then can the remaining assets (if any) be distributed to the owner. The owner must approve these documents.
NRA Tax Clearance (данъчна ревизия при ликвидация)
Before the company can be deregistered, the NRA (National Revenue Agency) must issue a certificate confirming no outstanding tax obligations. Under Article 77 of ДОПК (Tax and Social Insurance Procedure Code), the NRA is notified of the liquidation and typically initiates a tax review covering all open tax years. This review can take 2–6 months. If the NRA finds underpaid taxes, you must settle them before proceeding.
Deregistration from Commercial Register
With the NRA clearance certificate, final balance sheet, and proof that all creditors have been addressed, the liquidator files a final application with the Commercial Register to strike off the company. Once approved, the EOOD ceases to exist as a legal entity. All books and records must be archived for the statutory retention period.
Realistic Timeline
Don't plan for a quick exit. Here's what the timeline actually looks like:
| Phase | Duration | Notes |
|---|---|---|
| Owner decision + preparation | 1–2 weeks | Notarized decision, liquidator appointment, document preparation |
| Commercial Register filing | 3–7 business days | Registry Agency processing time |
| Creditor notification period | 6 months (mandatory) | Starts from Gazette publication date; cannot be shortened |
| NRA tax review | 2–6 months | Often runs in parallel with creditor period, but may extend beyond it |
| Final balance sheet + distribution | 2–4 weeks | After creditor period and NRA clearance |
| Deregistration filing | 3–7 business days | Final Commercial Register application |
| Total | 8–10 months (simple), 12–18 months (complex) | Complex = NRA findings, disputed creditor claims, or late filings |
Costs Breakdown
Liquidation involves both state fees and professional service fees. Here are the official state fees:
| State Fee | Cost (EUR approx.) | Notes |
|---|---|---|
| Commercial Register — liquidation entry | 40–50 | Electronic filing (reduced fee). Paper filing is double |
| Commercial Register — deregistration | 40–50 | Final deregistration after liquidation completes |
| Commercial Gazette publication | 15–20 | Mandatory creditor notification announcement |
| Notary fees | 30–60 | Notarization of owner's decision and liquidator signature specimen |
Professional fees (legal, accounting, liquidator): These depend on your specific situation — the complexity of the company's operations, whether it's VAT-registered, the state of the accounting records, and whether an NRA audit is triggered. We provide a detailed cost estimate after reviewing your case during a free initial consultation. Request a quote →
Tax Obligations During Liquidation
The company remains a taxpaying entity throughout the entire liquidation process. You can't stop filing just because you've decided to close:
Corporate Income Tax
- Final tax return: You must file a final corporate income tax return (годишна данъчна декларация) covering the period from January 1 to the date of deregistration. Due within 30 days of deregistration
- Advance tax payments: Continue quarterly advance corporate tax payments until the company is struck off — not until you decide to liquidate
- Liquidation profit: If the company distributes assets to the owner above the acquisition cost of their share, the difference is treated as a liquidation dividend and subject to the 5% dividend withholding tax
VAT Deregistration
- Mandatory deregistration: A company entering liquidation must deregister from VAT. The deregistration triggers deemed self-supply on all remaining assets — meaning you owe VAT on the market value of any assets still held by the company
- Final VAT return: Filed for the period ending on the date of VAT deregistration
- Asset disposal timing: Consider selling or disposing of assets before VAT deregistration to avoid the deemed self-supply charge
Social Security and Payroll
- Employees: All employees must be terminated before the company can be deregistered. Statutory notice periods, severance pay, and unused holiday compensation apply
- Self-insured owner (самоосигуряващо се лице): If you were self-insuring through the EOOD, you must deregister as a self-insured person with the NRA
- Final social security declarations: Must be filed covering the entire liquidation period
NRA Audit Risk: What to Expect
Let's be direct: liquidation almost always triggers an NRA review. The NRA treats company closures as their last chance to check your tax history — and they take it seriously.
Under Article 77 of the Tax and Social Insurance Procedure Code (ДОПК), the NRA must confirm there are no outstanding public obligations before the company can be deregistered. In practice, this means:
- Scope: The NRA typically reviews all open tax years (usually the past 5 years, or up to 10 years for suspected fraud)
- What they check: Corporate income tax declarations, VAT compliance, social security contributions, withholding tax on dividends, transfer pricing on related-party transactions, cash balances vs. declared revenue
- Duration: A straightforward review takes 2–3 months. Complex cases (multiple activities, significant revenue, intercompany transactions) can take 6+ months
- Findings: If the NRA identifies underpaid tax, they issue an assessment (ревизионен акт). You must pay the assessed amount (plus interest) before the liquidation can proceed. You can appeal, but that adds months
Prepare before you file: The single best thing you can do is get your books in perfect order before initiating liquidation. Reconcile all bank statements, ensure every invoice is accounted for, verify VAT filings match your accounting records, and resolve any inconsistencies. The cleaner your records, the faster the NRA review.
What Happens If You Just Abandon the EOOD
We regularly see clients who left Bulgaria and simply stopped dealing with their EOOD — no filings, no tax returns, no communication with the NRA. This is the worst possible approach.
Don't do this. Abandoning an active company in the Commercial Register creates compounding problems that are far more expensive to fix than a proper liquidation.
Here's what actually happens when you stop filing:
- Annual fines for missing financial statements: The Registry Agency imposes fines of BGN 500–2,000 for each year you fail to submit annual financial statements. These accumulate every year
- NRA penalties for missing tax returns: Fines of BGN 500–3,000 per missing corporate tax return, plus interest on any estimated tax liability the NRA may assess in your absence
- Personal liability for the manager (управител): Under Article 19 of ДОПК, the manager (управител) of a company can be held personally liable for unpaid tax obligations if they caused or allowed the non-payment through their actions or inactions. This liability survives the company
- Compulsory strike-off (eventually): After 3 consecutive years without filings, the Registry Agency may initiate compulsory strike-off proceedings — but by then, you'll have accumulated thousands in fines
- Credit and legal complications: An active company with unpaid obligations can create problems for your personal tax situation, especially if Bulgarian tax authorities share information under EU exchange agreements
Common Mistakes When Closing an EOOD
| # | Mistake | Consequence |
|---|---|---|
| 1 | Not settling all liabilities before filing for deregistration | Commercial Register rejects the application; process restarts |
| 2 | Forgetting to deregister from VAT | Deemed self-supply on all remaining assets; unexpected VAT bill |
| 3 | Poor bookkeeping going into liquidation | NRA audit takes months longer; potential tax adjustments with interest and penalties |
| 4 | Not terminating employees properly | Labor inspection fines; severance claims; deregistration blocked |
| 5 | Distributing assets before paying all creditors | Personal liability for the liquidator; potential criminal liability for asset concealment |
| 6 | Abandoning the EOOD instead of liquidating | Accumulating fines, personal liability for the manager, credit complications |
Selling the EOOD: When It's the Better Option
Selling the company share (дружествен дял) is fundamentally different from liquidation — you're transferring ownership, not dissolving the entity. The EOOD continues to exist under a new owner.
When Selling Makes Sense
- The company has a valuable VAT registration: New companies must apply for VAT registration separately; an existing registration has value
- Active contracts or licenses: Contracts, permits, or licenses that are difficult or time-consuming to obtain independently
- Clean tax history: A company with no NRA issues and several years of clean filings is attractive to buyers starting a business in Bulgaria
- Speed matters: A sale can be completed in 2–4 weeks vs. 8–10 months for liquidation
- You want to avoid the NRA liquidation audit: A share transfer does not trigger the same mandatory NRA review as a liquidation (though the buyer inherits the company's tax history)
How It Works
- Find a buyer — through a business broker, legal network, or direct contacts
- Negotiate the price — based on net asset value, tax history, and any intangible value (VAT number, contracts)
- Sign a share transfer agreement — must be notarized with notarially certified signatures
- File with Commercial Register — register the ownership change (3–7 business days)
- Pay capital gains tax — the seller owes 10% tax on the gain (sale price minus acquisition cost of the share)
Buyer beware, seller beware: The buyer inherits the company's entire tax history. If the NRA later audits and finds underpaid taxes from before the sale, the company (now owned by the buyer) is liable. This is why buyers typically demand thorough due diligence and sellers may need to provide representations and warranties. Get legal counsel on both sides.
Keeping the EOOD Dormant
Dormancy means the company stays registered but stops trading. This is not a formal legal status in Bulgaria — there is no "dormant company" registration. The company simply has no activity.
You still must:
- File annual financial statements with the Commercial Register (even if they show zero activity)
- File an annual corporate income tax return with the NRA
- Maintain a registered address
- Keep the company's accounting records current
Annual cost of dormancy: Minimal — primarily accounting fees for zero-activity filings and registered address maintenance. Contact us for a specific estimate.
When dormancy makes sense: You're temporarily pausing but plan to reactivate within 1–2 years, and the annual maintenance cost is trivial compared to re-registering a new company later.
When it doesn't: If you have no realistic plan to reactivate, dormancy just delays the inevitable and adds ongoing costs. Liquidate or sell.
Need Help Closing Your EOOD?
We handle the full liquidation process — from the initial shareholder decision through NRA clearance and final deregistration. Legal and accounting support in English.
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