Foreign investors, whether individuals or entities, have the same opportunities as local residents to establish various types of companies in Bulgaria. There are no legal restrictions for foreign investors, whether they are from EU member states or non-EU countries. Each type of company in Bulgaria has unique characteristics and benefits, for which we will give you detailed information in this article.
Types of business entities in Bulgaria
Choosing the legal form for your business depends on various factors, including your business goals, the number of partners, and tax considerations. The most common legal forms in Bulgaria are:
- Sole Proprietorship
- Limited Liability Company
- Joint-Stock Company
Sole proprietorship: A sole proprietorship (SP) in Bulgaria can be established by any Bulgarian or foreign individual residing in the country. The SP’s trade name must include their full first and last names, or first and middle names, and must be unique nationwide. This is the simplest legal form, with no capital requirement and no need for partners.
Limited Liability Company in Bulgaria can be formed by one or more Bulgarian or foreign individuals or legal entities. The company’s name must include “Limited Liability Company” or “Ltd.” and be unique nationally. The company is managed by a General Assembly of shareholders and one or more managers, who must be individuals. Foreigners can also serve as managers. The minimum capital requirement for an Ltd. is BGN 2, with each partner’s share being at least BGN 1. Partners can make both cash and non-cash contributions, with non-cash contributions needing valuation by three independent experts.
Joint stock company: A Joint-Stock Company in Bulgaria has a capital stock divided into shares, with a minimum capital of BGN 50,000. Founders can be individuals or legal entities. Registration requires a minimum 25% capital payment.
Company Registration Procedure
The Commercial Registry in the country is administered by the Registry Agency operating under the Ministry of Justice. The business registration requirements and procedures for the companies are uniform irrespective of whether the company shareholders are Bulgarian or foreign citizens. Applications for inclusion in the Commercial Register can be submitted through paper or electronic forms, following the conditions outlined in the Law on Electronic Documents and Electronic Signatures.
All applications and their attachments must be presented in Bulgarian. However, documents in any official language of the European Union are accepted, provided they are accompanied by a certified translation into Bulgarian.
Benefits of registering a company in Bulgaria
Opening a company in Bulgaria provides advantages such as low corporate tax rates (10%), EU membership for access to the single market, and a stable currency (Bulgarian Lev). The country’s strategic location at the crossroads of Europe and Asia offers business opportunities, supported by well-developed transportation infrastructure. Bulgaria’s lower cost of living results in reduced operational expenses, and its skilled workforce, particularly in IT and engineering, offers competitive costs.
The government offers various incentives for foreign investment, and the simplified company formation process eases administrative burdens. English proficiency in the business community facilitates communication, while the country’s high quality of life and cultural richness make it an attractive location for investment.
There are numerous factors to take into account before establishing a foreign company. Our office offers comprehensive guidance and recommendations, considering all relevant aspects, and provides professional support throughout the entire process.
