Bulgaria has become an attractive destination for foreign entrepreneurs due to its favorable tax rates, strategic location, and simplified business setup process. Whether you are an investor, freelancer, or entrepreneur looking to expand in Europe, starting a business in Bulgaria can be a great opportunity. Below is a step-by-step guide to the company registration process for foreigners.
- Choose the Right Business Structure
Before proceeding with company formation in Bulgaria, you need to decide on the most suitable legal entity for your business. The most common types include:
- Sole Proprietorship (ET) – Ideal for small businesses and freelancers.
- Limited Liability Company (OOD) – The most preferred structure for foreign investors due to its flexibility and limited liability.
- Joint-Stock Company (AD) – Suitable for large enterprises requiring significant capital.
- Branch or Trade Representation – For companies that want to operate in Bulgaria without establishing a separate legal entity.
For most foreign entrepreneurs, the Limited Liability Company (OOD) is the best option due to its ease of incorporation and limited liability for shareholders.
- Choose a Company Name and Verify Availability
Your business must have a unique name that is not already registered. You can check the availability of your desired company name through the Bulgarian Commercial Register. If the name is available, it must be reserved before proceeding with the registration.
- Appoint a Director and Define Share Capital
To register a company in Bulgaria, you need at least one director and a minimum share capital of 2 BGN (for OOD companies). Shareholders can be individuals or corporate entities, and there are no restrictions on foreign ownership.
- Open a Corporate Bank Account
A Bulgarian bank account is required to deposit the minimum share capital and facilitate financial transactions. You will need:
- A valid passport (for foreigners).
- The company’s founding documents.
- Proof of company registration (after incorporation).
- Prepare and Notarize the Required Documents
The following documents must be prepared and submitted for company registration in Bulgaria:
- Articles of Association or Memorandum of Incorporation (for multiple shareholders).
- A notarized specimen signature of the managing director.
- Bank certificate proving share capital deposit.
- Declaration of compliance with the Bulgarian Commerce Act.
- Application form for company registration.
These documents must be notarized and submitted to the Bulgarian Commercial Register.
- Register the Company with the Bulgarian Commercial Register
The official registration process takes place at the Bulgarian Registry Agency. The application is submitted online or in person, and upon approval, the company receives a unique identification number (UIC). The entire process usually takes 3 to 7 business days.
- Register for Taxes and VAT (If Required)
After incorporation, your company must be registered with the National Revenue Agency (NRA) for taxation. VAT registration is required if:
- The company’s annual turnover exceeds 100,000 BGN.
- You plan to engage in EU cross-border transactions.
Bulgaria offers one of the lowest corporate tax rates in the EU (10%), making it a tax-efficient location for businesses.
- Obtain Business Licenses (If Applicable)
Some industries, such as finance, healthcare, and construction, may require special permits or licenses before operating legally. Check with the relevant regulatory authorities to ensure compliance.
- Hire Employees and Register for Social Security
If your business requires employees, you must register them with the National Social Security Institute (NSSI). Employers in Bulgaria must contribute to social security and health insurance for their employees.
- Maintain Compliance and Annual Reporting
Once your company is operational, it must comply with Bulgarian regulations, including:
- Annual financial statements and tax declarations.
- VAT reporting (if applicable).
- Corporate and social security contributions.
Setting up a business in Bulgaria is a straightforward process with low start-up costs, investor-friendly policies, and favorable tax conditions. By following these legal steps, foreign entrepreneurs can efficiently complete company registration and start operations in Bulgaria (company formation for foreigners). If necessary, working with a local legal or accounting firm can simplify the process and ensure compliance with local laws.
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