Company Incorporation in Bulgaria

Company incorporation in Bulgaria, Reinvent Consulting

For incorporating a company in Bulgaria, you need to follow the steps listed below:

  • Company name reservation. This task is being performed at the Minister of Justice’ Registration Agency. The reservation is valid for two months, during which - if you do not manage to incorporate the business - you still have the name protected.
  • Founding members’ board. None of the founding members must have had any bankruptcy experience.
  • Share capital contribution. Submission is being made in a bank account dedicated to this purpose, and the minimum capital is 2 BGN (1 EUR = 1.95 BGN), or 1 Euro.

Registration of the entity. The legal entity will be registered at the Central Commercial Register. The type of the entity must be chosen as well. You can register one of these types of entities: limited liability company (OOD), limited liability company with a sole founder (OOD), joint stock companies (AD), joint stock companies with a sole founder (EAD). The incorporation legal sentence will be published in the Official Gazette. After registering the company with the Registry, you must proceed to registration at the National Statistics Institute (from where you get the BULSTAT number ) - in three days since registering the company at local agency of National Social Security Institute and the territorial office for taxes and duties (in 14 days from the beginning). The procedure usually takes two to three weeks. 

Foreign citizens and foreign companies have the same rights as Bulgarian citizens.

Tariffs

 

Incorporate a company in Bulgaria: from 530 Euro + VAT

This amount does not include the share capital. In case the individuals do not wish to travel to Bulgaria, additional costs will be added.

Registered office hosting and secretarial services: 650 Euro / year +VAT

These services includes a physical address where the office will be hosted, where we will be receiving incoming mail and from where you will receive a notification about the correspondence on a monthly basis, to your other specified address. For more services (telephone, fax, secretarial services, and representation services) we will make an offer adapted to your needs.

Financial records and accounting services: from 170 Euro / month + VAT

This provides accounting and payroll services as well as initial consulting services. The service is provided by an English speaking accountant.

 

Do you want to start your own business in Bulgaria? Call a consultant: (021) 318.69.60.

 

Useful Information

 

Bulgaria joined the EU on 1 January 2007 and has about 7.2 million inhabitants. Bulgaria was ranked 65 in the world in 2008 based on the gross domestic product per capita.

Politics, demography, economy, language

The first Bulgarian democratic parliament was elected in 1990 after the fall of communism. Out of 7.2 million people, the overwhelming ethnic majority is Bulgarian, 9.6%, but also Turkish citizens, Romanian citizens 4.1%, and 1.8% have other citizenships. Bulgarian language is written in Cyrillic alphabet.

The GDP contracted in 2009 with 5% due to certain problems of corruption in the public administration, a judicial system with certain vulnerabilities, and problems that constitutes the largest challenge for Bulgarian government officials. The business environment has improved rapidly after the country entered the EU and after the European Commission increased the pressure to complete the reform. Bulgaria's workforce includes approximately 2.67 million people.

The employer-employee ratio

Contracts of employment are concluded in writing, with an equal notice period both for the employee and employer, with a working day of 8 hours and 40 hours of work per week. Each employee is entitled to at least 20 days’ vacation per year. The minimum employment age is 16 years, and the gross minimum wage is of 240 leva. Lately, temporary work contracts are becoming commonly used, especially by western companies that are recruiting on this basis.

Termination / completion of the work contract can be done in the following circumstances:

  • The project, the operation, and the activity for which a person was hired has been completed,
  • It is seasonal work,
  • Contract was signed solely for a particular task that was accomplished, or for some reason it cannot be fulfilled,
  • The employee can no longer work as a result of his health condition and the employer cannot provide a different position,
  • Other situations provided by Article 328 of the Bulgarian Labour Code.

Retirement age is 55 for women and 60 for men. Contributions paid by the employer are of 34%.

Tax and Value Added Tax in Bulgaria

Tax and personal income tax is only 10% in Bulgaria, the lowest of all EU countries. Companies in Bulgaria pay taxes to the State, local taxes and VAT taxes.

If:

  • you are a legal entity registered in Bulgaria
  • you receive income from business conducted in Bulgaria

Then you will pay 10% tax. To these are added a series of expenses and other revenue taxes specified by law (Corporate Income Tax Act).

If you are a registered company in another country and operate in Bulgaria, tax will be paid on profits made in Bulgaria. Companies need to open a dedicated VAT account. Any company with a turnover exceeding BGN 50,000 will have to register for VAT. The value added tax is 20% and an increase is possible in the near future. VAT is payable for goods and services in Bulgaria, but also for imports into Bulgaria. Financial and legal counselling services are exempt from VAT.

Tax on property not used for residential purpose is of 0.15%. Property transfer tax for buildings and vehicles is between 2 - 4%. Dividends are taxed at 5%.

Licenses and authorizations

In Bulgaria, businesses need operating licenses, import licenses, and - in the case of the construction industry - permits / authorizations; in connection with all these issues we can have them arranged with the Ministry of Economy and Energy.

 

Do you need help? Contact us!

Our consultants are at your service from Monday to Friday, 9.00 am - 17.30 pm. 

(021) 318.69.60