Incorporation of companies
In Bulgarian law there are no restrictions on foreigners setting up a company in Bulgaria: there are no special requirements for their participation in the establishing of a company such as a work permit or resident permit. There is an an exception to this rule which exists in connection with registering as a sole proprietor, the requirements are different: a foreigner who wants to be registered as a sole proprietor should have a residence in Bulgaria.
Types of Business Structure
Property Purchase Restrictions and Company Set Up
The Legal Process of Starting a Business
According to Bulgarian legislation, all companies are registered in the Commercial Register at the Registry Agency.
Basic steps for establishing a company:
Hold a general meeting of the partners of the company at which:
resolutions are passed for establishing the company;
Articles of Association/Statute is adopted;
management bodies are elected;
Adopt and sign Articles of Association/Statute of the company. In accordance with the type of the business structure, the Articles of Association/Statute may have different content. Generally it includes:
information about the name of the company (which has to be unique for the territory of the Republic of Bulgaria);
the address of management;
the sphere of activity of the company;
the amount of the subscribed capital and the amount of the capital paid in the names of the partners and the way shares are distributed between them.
Pay the capital of the company into an escrow account and in the amount stated above. A banking document proving that the capital has been paid in is presented in the Commercial Register.
Submit an application for registration and a package of documents in the Commercial Register (in accordance with Bulgarian law).
The registration is done by entering the company in the Commercial Register, which is an electronic register available online.
On registration, the company receives a unified identification code, which is unique for the territory of Bulgaria.
It is not necessary to register a company for tax or statistical purposes in order to register it with the Commercial Register because The National Revenue Agency and the Commercial Register exchange information and the trader is entered into the general register of The National Revenue Agency without the need for a separate application.
After registration, the company prepares accounting documents in accordance with the Accounting act and must abide by Bulgarian tax legislation.
The Bulgarian financial year ends on 31 December and an annual tax declaration should be submitted by 31 March of the next year. The rate of the corporate tax, levied on the company's annual profit is 10 percent.
VAT registration (Valued Added Tax registration)
If a company fulfills the special requirements under the Value Added Tax Act, it must be registered in a special register for the purposes of the Valued Added Tax Act.