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When looking to establish a company overseas, many look to the famed tax haven. Yet, there are business environments in Europe that offer just as many compelling reasons to set up there. Estonia, Hungary, Romania, and Georgia all have their perks, but opting for a company formation in Bulgaria might just be your best choice.
Situated in southeast Europe, Bulgaria offers an incredibly strategic location and comes with the added benefits of being an EU member and having a very business-friendly tax regime. With a growing economy and many cost-effective business options, choosing to base your company formation in Bulgaria could be ideal.
A company setup in Bulgaria can reap many rewards. All-in, you get expansive market access, cost-effective business infrastructure to tap into, a great location, and low taxation. The list of reasons to go to Bulgaria to setup a company is expansive, with these elements being the headline selling points:
Entrepreneurs looking to register a business abroad do so wanting to gain more benefits than if they were to form on home soil. The strategic geographic location and EU market access combine for one of the big reasons to commit to a company setup in Bulgaria. To the north is Romania, and to the east is the Black Sea and its access to Türkiye and Georgia.
More locally, Bulgaria has a very business-friendly environment, a growing economy, and is actively seeking to encourage foreign investment through programs like tax breaks, financial aid, and support for infrastructure projects. Also helping in this regard is the government’s efforts to simplify business regulations and administrative procedures.
Further, Bulgaria’s a rather cheap country for company taxation, hiring labor, living costs, and real estate costs. Within the EU, Bulgaria stands among the most attractive for its low corporate tax rate and the flat personal income tax rate. For many, these are among the key selling points to having a company setup in Bulgaria.
Achieving company registration in Bulgaria requires completing many steps, but overall, it’s a relatively straightforward process. This is the general overview of the necessary legal and administrative procedures that you’ll need to complete:
Additional Investor Documents: Depending on your legal form, you may also need to provide translated and notarised documents from your foreign investors.
The process of company formation Bulgaria has setup involves several different expenses along the way. This isn’t dissimilar to the process in other countries, but it is worth knowing where the charges will come from before you get started. So, these are the expenses that your company should budget for:
Translations and Legalization Fees: Foreign investors will need to provide documents to the regulators, but will need those forms to be translated into Bulgarian and legalized.
From helping you to tick all of the boxes for company setup Bulgaria has laid out to providing ongoing legal support, InteliumLaw has an expert team ready to make the process as straightforward as possible.
There are many benefits to completing your Bulgaria company formation, from low costs and taxes to an encouraging business environment that links to the EU market, so it’s not a surprise that you’re intrigued by the prospect of setting up in the country. To get the ball rolling, all you need to do is drop us a message.
In Bulgaria, various company structures are available to suit different business needs. Limited Liability Companies (OOD/EOOD) are popular among small to medium-sized businesses, with EOOD being a variant for a single shareholder. For larger enterprises, Joint Stock Companies (AD) are preferable, allowing the issuance of shares but requiring higher minimum capital. Sole Proprietorships (ET) are ideal for individual entrepreneurs, although they come with personal liability. General Partnerships (SD) involve two or more individuals sharing unlimited liability, while Limited Partnerships (KD) combine general partners with unlimited liability and limited partners whose liability is restricted to their contributions. Additionally, foreign companies can establish branches in Bulgaria to conduct business activities, acting as extensions of the parent company rather than separate legal entities. Each type offers distinct legal and financial characteristics, catering to a range of business objectives and scales.
Yes, a non-EU person can be both a director and a shareholder in a Bulgarian company. Bulgaria does not impose restrictions on the nationality of shareholders or managers/directors in companies. Therefore, individuals from outside the European Union can hold shares in a Bulgarian company and can also be appointed to management positions, such as a director or a manager.
Yes, in Bulgaria, a single person can be both the sole shareholder and the director of a company. This is particularly common in the case of a Single-Member Limited Liability Company (EOOD), where one individual (or legal entity) holds all the shares of the company and can also act as the company's director or manager.
This arrangement allows for simplicity and flexibility, making it a popular choice for small business owners and entrepreneurs who wish to operate their businesses individually. However, even in this structure, the individual must comply with all legal obligations, including those related to company management, reporting, and taxation.
No, it is not necessary to physically travel to Bulgaria to open a company there. The company formation process can typically be handled remotely.
If you want to set up company in Bulgaria, the process of forming involves deciding on the business structure, reserving a unique company name, preparing and notarizing incorporation documents, opening a corporate bank account to deposit the minimum capital, registering the company with the Bulgarian Commercial Register, obtaining a Tax Identification Number, and registering for social security and health insurance if hiring employees. Depending on the business type, additional steps like VAT registration and acquiring industry-specific licenses may be required. The process is relatively straightforward and can often be facilitated by legal professionals, especially for foreign investors.
The duration for completing company registration in Bulgaria can vary depending on several factors such as the type of company being established, the completeness and accuracy of the submitted documents, and the efficiency of the Bulgarian Commercial Register at the time of application.
Generally, the process of registering a company in Bulgaria can take anywhere from a few days to a couple of weeks.
This includes reserving the company name, preparing and notarizing documents, opening a bank account, and completing the registration with the Commercial Register. It's important to note that additional time may be required for tasks such as obtaining necessary licenses or permits, especially if the business is in a regulated industry. For foreign investors or those unfamiliar with the Bulgarian system, the process may take longer, and seeking assistance from legal professionals is advisable to ensure a smooth and timely registration.
The costs associated with company formation in Bulgaria include fees for reserving the company name, minimum capital deposits (varies by company type), registration fees with the Bulgarian Commercial Register, notary fees for legal documents, legal and professional fees if you hire experts, and potentially bank account opening fees. Additional costs might arise from translation and legalization of documents for foreign investors, as well as licenses or permits depending on your business. While some costs are fixed, others like legal and professional fees can vary widely.
The minimum capital required is 2 BGN (Bulgarian Lev), which is approximately 1 EUR, for the standard limited liability company (OOD).
Yes, having a registered business address in Bulgaria is required when forming a company. This address serves as the official domicile of the company and is used for legal and administrative purposes, such as receiving official correspondence and government notifications. It must be a physical address within Bulgaria, not a P.O. Box.
For some entrepreneurs, especially those based outside of Bulgaria or without a physical office, a common solution is to use a virtual office service. These services provide a legitimate business address, along with additional services like mail handling, and can fulfill the requirement for a registered business address.
It's important to ensure that the address is kept up-to-date in the Commercial Register and other official records. Any changes to the company’s registered address must be reported and registered accordingly.
Yes, Bulgaria offers several tax benefits that make it an attractive location for forming a company. The country is known for having one of the lowest corporate income tax rates in the European Union, which is set at a flat rate of 10%. This low corporate tax rate is beneficial for businesses looking to maximize their profit.
Additionally, Bulgaria has a favorable outgoing dividend tax rate, set at 5%, which is appealing to foreign investors and business owners. For companies engaged in certain activities or operating in specific regions, there might be additional tax incentives or reductions.
Moreover, Bulgaria has a wide network of double taxation treaties with numerous countries, which can help prevent double taxation of income for businesses operating internationally.
In Bulgaria, not all companies are required to register as VAT (Value Added Tax) payers immediately upon incorporation. Whether or not a company must register for VAT depends on its taxable turnover and the nature of its transactions. Under general rule, a company must register for VAT if its taxable turnover exceeds or is expected to exceed BGN 100 000 over a 12-month period. This is roughly equivalent to about EUR 51 130. Also, the company will need to register as a VAT payer in case it carries out taxable supplies to other EU countries.
The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.
By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.
The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.
By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.
