Company registration in Bulgaria

Company registration in Bulgaria and possible difficulties during the process

January 29, 2019

Since joining the European Union in 2007, Bulgaria has become one of the most attractive countries in Europe for foreign investors, who are planning to expand their business activities. The lowest corporate tax in the EU in the amount of 10%, the lower salaries and wages and the fast-growing market in real estate, production and IT sectors have been attracting the attention of many investors in recent years.

Registration of a limited liability company (the most commonly used type of company registration in Bulgaria) is an easy and low-cost process, which however has been encountering some difficulties in recent months. The Commercial Act of Bulgaria and all acts, which stipulate the work and procedures of the Commercial Registry in Bulgaria, were amended in the last years in order to reduce the bureaucracy and to speed up all procedure of starting a new business. The minimal founding capital is only 1.00 (one) Euro, equal to 2.00 BGN. Here we have to point out that merchants also enjoy other benefits, such as limited liability towards creditors up to the amount of the raising capital, respectively, up to the amount of the company shares, and lower property taxes for immovable, owned by local companies in comparison to the property taxes in other countries of the European Union.

From legal point of view, if you wish to start your business in Bulgaria, there are several points you should decide on, such as:

– What will be the business activity of the new company?

– Who will be the shareholder/s of the new company and in what amount their individual shares will be?

– What will be the total amount of the raising capital of the new company?

– Who will act as a manager/s of the new company?

– What will be the trade name of the new company?

– Where will be situated the official seat and registered office of the company?

The whole process of company registration in Bulgaria approximately takes up to 7 days, depending on how quickly the Bulgarian Commercial Registry reviews all submitted documents and officially announces the requested registration of the company. In some cases, it is possible the registration procedure of a new limited liability company (LLC) to be completed within 3-4 days in total.

 “Yosifova, Petrov and Ivanov” Law Office, as a law office, which is specialized in Commerce Law, provides the full scope of services, related to company registration in Bulgaria. This includes the following:

– A consultation with the client, where we shall determine what is the most appropriate legal form of a company to be registered, which can meet the legal and financial interests of the client;

– Preparation of the full set of documents for the company registration in Bulgaria and sending all documents to the client for signing. If the client is abroad and all the communication is performed online, we shall also provide you with full instructions and explanation on how to sign the documents and how to sign, certify and legalize documents that need additional certifications;

– Opening a capital account of the new company in local Bulgarian bank. If the client is abroad, we can perform this step on his behalf on the basis of Notary certified power of attorney;

– Submission of the full set of documents before the Commercial Registry and obtaining registration within 3 days after submission of the documents;

– If the client requests, we can provide the Rent of Registered Office service, where the company can be set up and which can be used for communication with third natural and legal persons and state/municipal bodies in Bulgaria (in return  for an additional fee). The Rent of Registered Office service, also known as “Virtual office” enables clients to have a business address in Bulgaria without having to rent a place and employ administrative staff.

– If requested by the client, we can also assist in opening a standard payment account in the name of the new company, as well with setting the online banking option. Hence the client can then control and operate with his Bulgarian company account online from abroad.

           The company registration in Bulgaria may be a simple process in terms of documents and related expenses, but in recent months many foreigners have encountered serious difficulties, especially while opening  accumulation bank accounts in local banks. Following the entry into force of the new Measures against Money Laundering Act in 2018, Bulgarian banks became very strict towards all applications by foreign citizens for opening of new bank accounts. Currently, there are a number of banks that charge clients with a fee of between 300 and 700.00 BGN just for reviewing the application of the client for opening a capital bank account of a new company. This review of the application approximately takesone week to be completed by the bank. During the review process, banks usually ask for different information about future business plans of the new company, information about the shareholders, etc. Due to its successful work in the past years with some local banks, “Yosifova, Petrov and Ivanov” Law Office has established good relations with several Bulgarian banks, thereby allowing our Clients to receive the best possible services within short terms and at no additional expenses.

         Within addition to the company registration in Bulgaria and ensuring all legal aspects of the process, we can assist you for the accountancy of your new company.  Accounting is an extremely important element in starting a new business and having a good accountant can save you time, money and unpleasant surprises. “Yosifova, Petrov and Ivanov” Law Office works with several respected local accounting companies, which can provide you with the full range of accounting services that your company may need.

If you are planning registration of a new company in Bulgaria, please do not hesitate to contact us, using the Contacts section of our website.

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