Opening a company in Bulgaria is an option that so far has been little explored by foreign capital investors. However, registering a company in Bulgaria represents an opportunity in a country with a favorable geographical position (access to the Black Sea, proximity to the Mediterranean through Greece and neighboring Turkey) and with the chance of being in a country that is a member of the EU.

On the other hand, the country is also characterized by a cheap labor force and a very low cost of living compared to other European countries. In addition to strategic sectors in its economy where foreign investment is welcome (telecommunications, transportation, hydrocarbons, etc.).

In our article we will explain to you the types of companies that can be registered in Bulgaria and how to do it. 

Legal Framework

The law that is responsible for governing the types, business structures and administration of companies, as well as the requirements for establishing a company in Bulgaria, is the Trade Act of 1991. On the other hand, the Commercial Registration Act of 2008 regulates requirements and the procedure for centralized electronic registration with the authority in charge of collecting information on companies: the Commercial Register. 

Other relevant laws governing corporate matters include the Corporate Tax Law of 2006, the VAT Law of 2006, the Investment Promotion Law of 1997, the BULSTAT Registration Law of 2005, the Social Security Code of 1999, the Tax and Social Security Procedure Code of 2005 and the Data Protection Law of 2002.

Types of Companies 

The following types of companies are permitted under the Bulgarian legislature:

- Limited liability company,

- Joint Stock Company

- General Partnership

- Limited Partnership

- Company limited by shares.

And the types of business organizations mostly used for foreign investment are:

- LLC (Limited Liability Company)

- JSC (Joint Stock Company) 

- Branch office 

- TRO (Foreign Representative Office)

According to the legislature, all commercial companies would be set up as legal entities independent of their founders. There are no exceptions regarding the nationality of the company's founder, all of them are considered legal subjects governed under Bulgarian law.

On the other hand, the foreign investment in a Bulgarian company can be 100%. The incorporated structures have legal status from the first moment they are registered in the Commercial Register.

Consequently, the time required for registration or liquidation of a company will be completed within three days after the administrative procedure is completed.

How to Register a Company?

All companies are registered with the Commercial Registry of the country. This in turn works in conjunction with the Ministry of Justice to supervise full compliance with the administrative processes.

1. Limited Liability Company

The limited liability company is the most commonly used type of organization in Bulgaria due to the low amount of capital required to establish it and the simplicity of its organizational structure. 

It can be established by one or more persons or legal entities. Also, its members may be nationals or foreigners. 

Requirements:

- Minimum opening capital: 2 BGN. 

- Application for registration

- Articles of Incorporation

- Articles of Incorporation of a company

- Notarized signatures of all appointed general directors.

- Certificate of the deposited capital issued by the bank

- Resolution of the body managing and representing a member that is a legal entity

- Extract from the relevant company register in respect of a member that is a foreign legal entity

- Document evidencing payment of the state fee for incorporation of a limited liability company.

Fee

- In case of electronic registration of the company with the commercial register, the fee is between 80 or 160 BGN. 

- For the reservation of the company name the fee is 50 BGN.

Administrative Structure

- General shareholders meeting

- Manager(s) who administers and represents the company before third parties.

Joint Stock Company

The joint-stock company is another common type of company in Bulgaria. It is preferred because of the low regulation of the transfer of shares and the non-liability of its founders for administrative tasks.

Requirements

- Minimum opening capital: BGN 50,000 (approximately EUR 26,000).

- Application for registration

- Articles of Incorporation

- Minutes of the Shareholders' Incorporation Meeting 

- List of attendance at the incorporation meeting

- List of subscribers of shares at the incorporation meeting

- Minutes of a meeting of the Board of Directors

- Certificate of deposited capital issued by the bank

- Resolution of the management body representing a shareholder that is a legal entity Extract from the relevant commercial register of a shareholder that is a foreign legal entity

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Fee

- In case of electronic registration of the company with the commercial register, the fee is between 80 or 160 BGN. 

- For the reservation of the company name the fee is 50 BGN.

Organizational structure

- General meeting of shareholders

- Board of Directors

Branch

The branch is the preferred type of company for foreign capital. It is a legal entity with the capacity to carry out commercial activity. It does not require any paid-up capital or any separate administrative structure. The assets owned by this subject are considered assets of the parent company.

Requirements

- Official registration document of the foreign person issued by the corresponding competent authority according to its national legislation.

- Registration in the Bulstat Register (authority in charge of registering foreign investment).

- Official document of the persons managing and representing the foreign person.

- Resolution of the managing entity of the foreign person for the opening of a representative office in Bulgaria

- Original special power of attorney issued by the person(s) representing the company to the person authorized to register and manage the representative office in Bulgaria

- Original copy of the signature of the person who is the representative in Bulgaria

- Document certifying the payment of the fee for registration of the representative office

Fee

The fee for registration of a branch office is BGN 40.

Organizational structure

- Manager

Commercial Representative Office

It is a foreign person or entity with the capacity and right to conduct business on behalf of the parent company provided it is authorized by the home national legislation. These commercial representative offices have the right to conduct activities that may not be related to the business activity of the parent company. 

Requirements

- Official registration document of the foreign person issued by the relevant competent authority according to its national legislation.

- Registration in the Bulstat Register (authority in charge of registering foreign investment).

- Official document of the persons managing and representing the foreign person.

- Resolution of the managing entity of the foreign person for the opening of a representative office in Bulgaria

- Original special power of attorney issued by the person(s) representing the company to the person authorized to register and manage the representative office in Bulgaria

- Original copy of the signature of the person who is the representative in Bulgaria

- Document certifying the payment of the fee for registration of the representative office

Fee

The fee for registration of a foreign representative office is 70 BGN.

If you are interested in setting up a company or a branch in Bulgaria, we at Mundo are ready to help you. Don't hesitate to contact our experts.

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