Setting Up a Business in Bulgaria
All persons wishing to undertake economic activity through a local company in Bulgaria have to apply to the Bulgarian District Court for registration at the special Commercial Register kept by the Court.
Authorization to conduct economic activity is given from the date of entry in the Commercial Register.
Foreign entities may operate through joint-ventures, wholly owned subsidiaries and branches in Bulgaria.
Foreigners may own buildings and limited rights over immovable property. Nevertheless, direct ownership of land is prohibited and ownership of agricultural land by foreign persons is restricted.
Organisational Forms of Doing Business
The organisational forms of doing business are stipulated for in the Bulgarian Commercial Code. It was enacted in 1991 and draws on the principles and practice of German law.
A “merchant” is such an individual or an entity that executes business transactions on a regular basis and for profit. Farmers and self-employed professionals (artisans, doctors, lawyers, etc.) are excluded from the scope of the law.
Business Forms in Bulgaria
The Bulgarian Commercial law allows for the following types of business organizations:
Unlimited (general) partnership;
Private limited company;
Single person private limited company;
Public limited company (joint stock company);
Public limited partnership;
The most appropriate types of companies for carrying out business in Bulgaria are: a private limited company, a public limited company, a single-person private limited company, a holding, a branch, and a representative office. All of these (with the exception of a representative office) have to be entered into the commercial register kept with the relevant district court.
Private Limited Liability Company in Bulgaria – “OOD”
Private Limited Company (a limited liability company) – “OOD” – it is a commercial company with share capital owned by its members whose liability is limited to the amount of the capital subscribed. The minimum foundation capital is 1 Euro and at 100% of the capital must be paid up on foundation. Contributions to the foundation capital may be paid in cash or via wire transfer. The statutory bodies of the private limited companies are the general meeting of shareholders, which must be held at least once a year, and the managing director or board of directors.
Single Person Private Limited Liability Company in Bulgaria – (EOOD)
Single Person Private Limited Company (a limited liability company) – “OOD” – it is a commercial company with share capital owned by its single member whose liability is limited to the amount of the capital subscribed. It may be established by one or more persons, including foreign natural or legal persons. The minimum foundation capital is 1 Euro and 100% of the capital must be paid up on foundation. Contributions to the foundation capital may be paid in cash or in kind. The statutory bodies of the private limited companies are the general meeting of shareholders, which must be held at least once a year, and the managing director.
Public Limited Liability Company in Bulgaria – (AD)
Public Limited Company (a joint stock company) – “AD” – it is a commercial company with share capital owned by its members whose liability is limited to the amount of the capital they subscribe. Two or more persons, including foreign individuals or legal persons can found a joint stock company. The minimum required capital of a joint stock company is BGN 50,000, increasing to BGN 100,000 if the capital is raised by a public offer. There are different requirements for establishment of banks, insurance companies and investment companies.
Representative Office in Bulgaria
Foreign persons who are entitled to engage in business activity under the legislation of their own countries may set up a representative office which is registered with the Bulgarian Chamber of Commerce and Industry. Representative offices are not legal persons and may not engage in economic activity.
Holding Public Limited Liability Company in Bulgaria
As defined in the Commercial Code, holding is a public limited company, a public limited partnership or a private limited company with the purpose to participate in whatever form in other companies or in their management. At least 25% of the capital of a holding has to be entered directly in subsidiaries. A subsidiary, according to the local law, means a company in which the holding owns or controls directly or indirectly at least 25% of the stocks or shares, or can appoint directly or indirectly more than 50% of the members of the managing body. The Commercial Code explicitly names the activities, which a holding is allowed to perform and those, which it is not allowed to perform.
Branch Company in Bulgaria
Foreign legal entities registered abroad, as well as foreign individuals and other entities, can register a branch in Bulgaria provided they are registered as commercial entities in accordance with the relevant legislation in their home country. No authorized capital is required to found a branch. A branch is not a legal entity, it is part of the company – founder. However, branches are obliged to maintain accounts as an independent company. A branch of a foreign company must prepare a balance sheet..
Joint Venture Company in Bulgaria
Joint Venture is a company formed jointly by a Bulgarian and a foreign partner. The size of the foreign participation in a joint venture is not limited. Joint ventures must take one of the forms of business entities pursuant to the Bulgarian Commercial Code. Establishment of a joint venture is one of the most popular forms for investing in Bulgaria..
Sole Proprietor Company in Bulgaria
Any individual residing in the country has the right to register himself as a sole proprietor. The liability is unlimited.
Company Registration Procedures
Registration of a Limited Liability Company
The Limited Liability Company is founded or owned by one or more persons, including foreign natural or legal persons. The minimum authorized capital is BGN 5,000. The basic steps in the formation process are, as follows:
Reservation of the name of the company and issuance of a certificate for uniqueness of the name;
Composing articles of association or founding a deed for a single-member LTD;
Formation of company’s share capital (at least BGN 5,000;
Issuance of bank deed certifying that at least 1 BGN of the registered capital has been paid Appointment of managing body;
Registration in the commercial register of the relevant district court by the appointed manager who possesses representative power;
Issuance of a permit from the competent body for performing specific commercial activity before entry into the commercial register (e.g. investment broker);
Completion of the establishment: court decision for entry into the commercial register;
Publication of the registration into the state gazette;
Registration at the respective territorial division of the Registry Agency;
The necessary documents for registration of a limited liability company in the Commercial Register are, as follows:
Application for registration
Memorandum of association
Constituent meeting minutes
Notary certified consent with specimen of signature for each of the managers
Declaration in compliance with art. 142 CA (Commercial Act)
Bank document of capital deposited
Company name uniqueness certificate
Certificate for actual status of a shareholder-legal person
Decision of the managing body of a shareholder-legal person
Receipt for paid state taxes
Receipt for paid state tax for publishing in the State Gazette
Registration of a Joint-Stock Company
Persons entitled to request registration-only the relevant managing body of the company could request registration in the Commercial register. The basic steps in the formation process are, as follows:
Reservation of company name and obtaining a certificate for uniqueness of the company name
Holding a Constitutive Meeting, where the memorandum of association is accepted and the managing bodies are voted. At the meeting all shares of the JSC capital should be subscribed;
Founders Contributions, which must be made by the founders-in money or non-cash;
The necessary documents for registration in the Commercial Register are as follows:
Application signed by all members of the managing body;
Memorandum of association, accepted on the constitutive meeting;
Minutes of the constitutive meeting, drawn in compliance with the terms and conditions of at.232 and subsequent from Commercial Law;
List of the persons, subscribing shares upon the incorporation (founders) attested by the managing body;
Bank document for pecuniary contributions, installed by the subscribers;
Written consent with a notary certified signature of the contributor of a non-cash contribution;
Notary certified signature specimens of the persons, who shall represent the company;
Founders’ declarations (if natural persons) stating that they are not declared insolvent and court certificates for the founders-legal persons are not declared insolvent;
Declarations of the members of the managing authorities that they agree to become members of the relevant authority;
Experts’ statement duly admitted by the district court if non-cash contributions are made;
For founder-legal person-registration judgment, certificate for actual status, managing body resolution for participation in the joint-stock company and an express notary certified power of attorney of the person who represents the legal person at the constitutive meeting;
Receipt for paid state taxes;
Receipt for paid fee for publishing in the State Gazette;
Registration of Trade Representative Office of a Foreign Person
The required documents and procedure for registration of trade representative office of a foreign person are as follows:
Application form with a registration request filed with the Bulgarian Chamber of Commerce and Industry;
Official document for the registration of the foreign person, issued by the competent authority in compliance with the person’s national legislation;
Resolution of the managing body of the foreign person to open a trade representation office in Bulgaria:
Special power or attorney in the original, notary attested issued by the person in item 2 to the person authorised to register and govern the representation office. As well as the volume of permitted rights;
Official document indicating the persons representing and binding the foreign person;
Original specimens of the persons, representatives in the Republic of Bulgaria by right or by special powers, notary attested;
Document for paid fee for registration in BCCI;
Filled-in registration card for the information system of BCCI;
- 1 Setting Up a Business in Bulgaria
- 1.1 Only 3 days to incorporate Only EUR 1 minimum start-up capital Directors can be of any nationality Shareholders can be private individuals or legal entity
- 1.2 Organisational Forms of Doing Business
- 1.3 Business Forms in Bulgaria
- 1.4 Private Limited Liability Company in Bulgaria – “OOD”
- 1.5 Single Person Private Limited Liability Company in Bulgaria – (EOOD)
- 1.6 Public Limited Liability Company in Bulgaria – (AD)
- 1.7 Representative Office in Bulgaria
- 1.8 Holding Public Limited Liability Company in Bulgaria
- 1.9 Branch Company in Bulgaria
- 1.10 Joint Venture Company in Bulgaria
- 1.11 Sole Proprietor Company in Bulgaria
- 1.12 Company Registration Procedures Registration of a Limited Liability Company
- 1.13 Registration of a Joint-Stock Company
- 1.14 Registration of Trade Representative Office of a Foreign Person
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