In 2007, having become a full member of the EU, Bulgaria began to create favorable investment conditions and provide all possible support for the development of business by foreigners. Today, Bulgaria has a transparent company registration system and simplified taxation of foreign companies, and the income tax rate of 10% is the lowest in Europe. The most common form for registering a company in Bulgaria is a limited liability company.
The owners (shareholders) of a company in Bulgaria can be both individuals and legal entities of any residence. When registering a Bulgarian company, the owners sign the Memorandum of Association and the Articles of Association of the company and appoint a director.
The liability of the owners is limited to the authorized capital of the company.
The minimum authorized capital of a Bulgarian company is 2 BGN. (1 EUR), but it is recommended to deposit at least 1000 EUR as capital. At the time of registration of a Bulgarian company, the authorized capital must be fully deposited into the company's account in a local bank. After registering a company, the authorized capital can be used for the needs of the company.
A Bulgarian company must have at least one director, but only an individual. The director of a company in Bulgaria can be a resident of any country. Since Bulgaria is not an offshore company, Bulgarian legislation does not recognize such a thing as a “nominee director or shareholder”. As a hired director, it is possible to use the services of a local real director, but the director of a Bulgarian company must have full information about all events taking place in the company. Also, the director must have the right to manage the company's bank account and receive bank statements.
Bulgarian directors do not issue a general power of attorney, but only special powers of attorney for certain operations (conducting negotiations, signing contracts, opening subsidiaries, etc.), excluding the opening and management of company bank accounts. When using the services of a local director, the client enters into a separate agreement on administrative services for 1 year. If you yourself plan to act as a director of a Bulgarian company, it is important that you speak English very well, since Russian and Ukrainian are not common in Bulgaria. Also, when opening an account in a Bulgarian bank, the director must personally come to the bank and sign everything documents for opening an account.
Before registering a company in Bulgaria, it is necessary to carefully consider the structure of the company, namely, who will be the director and owner of the company. According to EU directives, if the director and owner of the company are the same person, he will have to pay social contributions on the salary corresponding to the director's salary, even if no salary is actually paid. To avoid paying social contributions, you need to structure the company in such a way that the director and owner are different people.
Taxation of Companies in Bulgaria.
Despite the fact that Bulgaria is a European country, tax rates for non-resident companies are the lowest. The profit tax of Bulgarian companies is only 10%. The tax rate is uniform and applies regardless of the amount of profit. After the first year of registration, depending on the company’s turnover, either a monthly advance payment of tax is made on the expected profit (for a turnover up to 300,000 levs) or a quarterly payment of tax (for a turnover above 300,000 levs).
The tax on dividends received by a Bulgarian company from its subsidiaries is 5%. The tax on dividends transferred by a Bulgarian company to its owners is 5% or 10% depending on the specific double tax treaties with the state to which the dividends are transferred. Dividends received by a Bulgarian company are not included in the tax base.
A huge advantage of a company in Bulgaria is that a VAT number can be obtained immediately after registering the company. The VAT rate in Bulgaria is 20%. After receiving a VAT number, the company is required to submit a VAT report on a monthly basis, regardless of whether the company carried out any activities with VAT. We recommend obtaining a VAT number immediately after registering the company, since if VAT is required for a certain transaction, obtain it later it will be more difficult.
A Bulgarian company must maintain accounting records and submit financial statements annually. To do this, you must use the services of a local licensed accountant. Financial reports are signed by the director and accountant. Financial reports are submitted even if the company did not conduct any activities - there is no such category as a dormant company in Bulgaria.
The process of registering a company in Bulgaria.
Registration of a Bulgarian company, unlike an offshore company, is a non-standard procedure with many subtleties. Previously, at the stage of preparing the statutory documents, it is necessary to agree on the exact types of activities with the shareholder of the Bulgarian company. It is possible to register a Bulgarian company with several types of activities or add new types of activities by making appropriate amendments to the company's Charter. Preparation of statutory documents by a lawyer takes from 3 to 7 working days, then the process of state registration of a Bulgarian company takes place and takes from 5 to 10 working days.
To register a company in Bulgaria, a personal visit of the company owners and director to Bulgaria is required, since the company's constituent documents must be signed by the owners and director in the presence of a notary. After signing the constituent documents of the Bulgarian company, a temporary company account is opened in a local bank, into which the founding capital is deposited. This must be done personally by the director, since the power of attorney is most often not accepted by banks.
The general period for registering a company in Bulgaria is 2-3 weeks, depending on the workload of the Trade Register. After completing registration, if not required, you can apply for a VAT number.
Also, after registering a Bulgarian company, it is necessary to open a bank account for the company in a local bank. The director of the company must personally arrive at the bank to sign documents and deposit the authorized capital.
A prerequisite for opening a company in Bulgaria is to have 1 bank account in the national currency Lev. The presence of such an account greatly simplifies the work of a Bulgarian company with government authorities (payment of taxes, settlements with an accountant, etc.)
A Bulgarian company can have several bank accounts in any currency.
The most common question when registering a company in Bulgaria is the price? Registering a Bulgarian company costs about 2000 - 2500 Euro.
Opening a company in Bulgaria provides a number of advantages, and the main one is the right to conduct business in the EU. And, given the low tax rates, MaIra Consult specialists recommend using a company registered in Bulgaria as a holding company to protect assets and own corporate rights, receive dividends; for international trade and export-import operations in EU countries; as well as for transactions with intellectual property (for example, receiving royalties).
