Moving your business to Bulgaria
December 29, 2016
As part of the European Union, Bulgaria benefits from having access to the wide European market. Bulgarian companies benefit from friendly local taxation environment and only 10% flat Capital Gains tax (plus 5% dividend tax), which are the lowest tax rates within the EU. Therefore in the last couple of years, Bulgaria has become an attractive destination for business relocation and to do business for many international companies which have opened local outsourcing offices and producing factories here.
The cheaper qualified labor hand and prices of materials, together with the affordable real estate loan and sale prices have encouraged many overseas companies, freelancers, and self-employed individuals to relocate their business here in order to lower the staffing and reducing the cost of doing business, and reaching income increase.
Figures speak enough: According to the latest statistics for foreign investments in Bulgaria, as published on November 16th, 2016 by the Bulgarian National Bank, the real estate investments made by foreign investors rise with almost 20% in the period January-September 2016, compared to the same period in 2015. Most investments in the Bulgarian economy within the above detailed period came from the Netherlands, Germany and the United Kingdom.The local legislation is also very tolerant to foreign investors – it enables purchasing any real estate in the name of a formed local company. Many foreign investors have established corporate entities and purchased the needed buildings or parcels of land for starting their business and also personal properties for a living. Also, it is legally possible to hire foreign personnel for your local company.
Together with the affordable cost of living, the language barrier is not a burden as half of the local population speaks at least one foreign language, and most of the qualified local personnel speak English.
Also, Internet users in Bulgaria benefit from one of quickest online connections in the world, available to huge part of the citizens. More and more local businesses relate to usage of Internet for doing successful business. This fact, together with the modern online banking services offered by local banks, enable company representatives and company owners to operate easily with online trading and online wire transactions, even from abroad.
If you are planning to relocate your business, limited liability company or other corporation in Bulgaria, there are different legal ways to do it – via incorporating a new local company (dissolving the old company or setting up a parallel corporate structure), or a Bulgarian subsidiary (branch), or via merger / acquisition with a local company. The most convenient path depends on your particular intentions – to keep the connection with the country of origin, or to move the legal entity permanently.
The local Law usually requires the establishment of a local corporate entity registered in the Companies House, which entity could be taxed as the income arising from its business activity, performed in Bulgaria.
The flat taxation enables investors to make advanced calculation and prognoses for incomes and expenses, respectively to get a clear view of the possibilities to increase the profit via relocation of their business to Bulgaria. The accountancy (keeping the books of the company) also depends on the business performed and in theory is not much complicated, especially for companies with a single subject of trading and a limited number of trade deals.
If you wish to explore the possibility to relocate your business to Bulgaria, we can consult you on the most beneficial legal paths to do it as well on the legal aspects of performance of business activities in Bulgaria, in order to clear your view in advance on the related milestones of such procedure.
If you have decided to take this step, then we can assist you with the legal process where to perform the process of business relocation at the local Authorities.
Our scope of legal work associated to setting up a company or local branch in Bulgaria includes performance all the related registrations at the Authorities and obtaining the needed business licenses, as well preparation of the required documentation for business relocation. If you need then a local lawyer to maintain the proper legal status of your local company and to deal with the legal matters in your business relocation we can offer to you a subscription plan for our legal services.
See also: Benefits and advantages of obtaining residence permit in Bulgaria: http://lexsofia.com/2016/11/05/benefits-advantages-obtaining-residence-permit-bulgaria/