Business in Bulgaria
Registration of a company in Bulgaria
If you intend to start your own business in Bulgaria, you must determine its form as follows:
Types of companies in Bulgaria
1. Sole proprietor(SP)
2. General Partnership (GP)
3. Limited Partnership (LP)
4. Limited Liability Company (LLC)
5. Single-member limited liability company (Ltd.)
6. Joint Stock Company (JSC)
7. Partnership limited by shares (PLS)
Each of these forms has its own peculiarities. It is necessary to choose which of these forms is the most appropriate for your intentions. For this purpose, you can contact our lawyers – they will advise you on the best option.
For the registration of a legal entity is required:
– A copy of the passport of the founder (co-founder of the company)
– A company name
– Minimum share capital – 2 lev.
The main documents of the company are:
– Decision by the registering authority
– Act of incorporation
– Management contract
Registration of the Commercial Representation in Bulgaria:
Each foreign company with the right to perform a commercial activity in their country has the right to register a Commercial Representation office in Bulgaria.
The whole package of the necessary documents must be translated into Bulgarian language and legalized in the Consular offices of Bulgaria.
Documents, required for registration of Commercial Representation offices of foreign legal entity, are:
1. completed application form and information sheet of the BCC;
2. an official document for registration of the foreign company, issued by the competent authority in accordance with the national legislation;
3. an official document issued by the authority from the previous point, which indicates the persons, who manage and represent the foreign entity;
4. the decision of the Board of Directors of the foreign company to register a Commercial Representation office in Bulgaria;
5. original, special, notarized power of attorney to the person entitled to register and manage the Commercial Representation in Bulgaria and the scope of the granted rights (also can be presented an original true certified copy);
6. The originals of the specimen of the signatures of the representatives in Republic of Bulgaria – by right or by special powers, which are notary certified or made on a special declaration form of BCC, before an authorized official of the bureau “Commercial Register” of the BCC;
7. document for paid registration fee;
Corporate tax in Bulgaria
The Corporate tax on the annual tax profit is 10%.
Taxpayers are local business entities, including the unincorporated organizations, which have commercial activity in the country, and the tax is payable on their profits and incomes from all sources in Bulgaria and abroad.
Foreign business entities are taxed on the profits, which are received from the place of the business activity in Republic of Bulgaria or from disposition of property in Bulgaria, as well as on all their income sources in Bulgaria.
The Corporate Income Tax Act contains specific provisions for the minimum and regional state aid as a tax relief. For example, the corporate tax shall not be paid by the taxpayers to an amount up to 100%, if the latter have a profit from the performance of production activities, including toll manufacturing, in municipalities with unemployment higher than the average for the country. The taxpayer must conduct manufacturing activities only in municipalities, where the previous year, before the current one, the unemployment rate is 35% or higher than the average unemployment for the country for the same period.
It is provided a tax relief, as a state aid to farmers. In this case, the corporate tax may not be paid and may be held to the amount up to 60% by the taxpayers, who are registered as farmers. This state aid may be provided for the profit from the farmers’ activity producing unprocessed plant and animal production.
The Act contains provisions for tax incentives for hiring unemployed persons as well as for enterprises employing persons with disabilities.
Exempted from the corporate tax are the UCITS that are admitted for public offering in Bulgaria and the licensed investment companies of the closed type, according to the Law of the operation of the UCITS and other enterprises for collective investment, the companies with special investment as well as the Bulgarian Red Cross.