Regardless of whether the investor is a local or foreigner, the process of registering a business in Bulgaria is the same for both. When planning to stay in the nation for an extended amount of time in order to do business, foreign investors must also comply with the conditions for obtaining a visa and submitting a residence application.
Company incorporation in Bulgaria has been streamlined to make the process easier and offer for the so-called “one-stop shop” that enables a speedy creation of a firm. However, due to the language barrier, international investors looking into various investment opportunities in Bulgaria may benefit from specialised guidance. Our legal firm in Bulgaria is available to entrepreneurs that wish to launch a business in Sofia or another Bulgarian city.
Requirements to start a business in Bulgaria
Foreign investors can create a business in Bulgaria under the Bulgarian Commercial Code, just like any other local investor. When registering a joint stock company in Bulgaria, there are no additional criteria. When establishing a joint stock company, the minimum share capital is 50,000 BGN, and the share capital requirements are increased to 100,000 BGN if the firm is listed on the Stock Market. Joint-stock firms, on the other hand, are required to have at least two shareholders and a board of directors in order to be incorporated as a limited liability company.
EU investors do not need a visa to stay in Bulgaria: they may enter the country using their ID card or passport and stay for a maximum of three months, which in most situations is adequate for foreign company owners to run their businesses. Investors from third-country nations are subject to the same visa restrictions as those in other EU countries, but if they invest a significant sum in Bulgarian shares, assets owned by a Bulgarian firm, bonds, treasury bills, and other instruments, they can become permanent residents. Investing in Bulgaria might lead to a permanent residency visa in the nation. One of our Bulgarian attorneys can provide further information.
Starting a business in Bulgaria
Investors who want to start a business in Bulgaria must follow the steps outlined above, as well as any additional rules that may come into effect in the future. The taxation of corporations is one of the most pressing topics.
Legal entities that are both Bulgarian residents and non-residents are subject to corporate tax in the country. Corporate tax rates in Bulgaria are among the lowest in Europe, at 10%, and businesses may take advantage of both general advantages and specific regional tax benefits. EORI registration is necessary for investors who want to supply intra-community services.
As a result of both its economic benefits and its evident tax and human resources advantages over other European nations, Bulgaria has emerged as an intriguing option for starting a firm.
Starting a business in Bulgaria has a number of advantages, including:
- Bulgaria has a strategic location in Europe because of its proximity to the Black Sea, Romania to the north, Serbia and Macedonia to the east, Greece and Turkey to the west, and Greece and Turkey to the south. As the 14th biggest European country with a landmass of 110,994 square kilometres, it is positioned in southeast Europe.
- A massive population of nearly 7 million people means that Bulgaria’s commercial and cultural activities revolve around Sofia, the country’s capital and the country’s most populous city. Economic sectors that rely heavily on natural resources include agriculture, power engineering, and heavy industries. Because of its EU, NATO, and Council of Europe membership and membership in these organisations, Bulgaria benefits from EU-wide legal standards as well as political and economic stability.
- The country boasts one of the lowest corporate income taxes in Europe, as well as a low personal income tax; labour expenses are also competitive when compared to those in Germany, Belgium, France, or other European Union countries.
- In addition to cheap labour expenses, the country’s workforce is highly competent and multilingual.
A simplified registration process
When it comes to starting a business in Bulgaria, there are a lot of advantages, like a symbolic minimum required capital of 2 BGN for a private limited liability company and a simple registration process. Most of the time, it will only take a few days or even a few weeks for a company to register in Bulgaria. In very rare cases, it can take as many as two weeks.
A limited liability company, a joint-stock company, and a branch of a company from another country are the most common types of businesses in Bulgaria (an extension of the foreign legal entity). People who run businesses have to register them with the Commercial Register, and there will be fees for this process.
One of our lawyers in Bulgaria can tell you everything you need to know about the different types of legal entities and how to start a business in Bulgaria.
When you start a business in Bulgaria, you can use a power of attorney to open the company, and the beneficial owner doesn’t have to be in Bulgaria when the company is registered. Our team can tell you more about how we can help you.
If the company was set up, but it doesn’t do anything, it doesn’t have to pay money. However, the legal entity must still submit an annual tax return, which is a very simple process that can be done either by the company’s manager or through accounting services.
Companies can be set up quickly and easily. Investors should keep in mind that there are other rules that must be met, such as EORI registration, in some situations.
Low taxes for businesses and low costs for workers
In Bulgaria, a company is taxed based on its profit, which is different from turnover. For example, the tax is paid on the profit that a company makes after all expenses have been taken out of the total amount. There is a 10% tax on the amount of money you make.
With countries like the UK, Turkey, and Russia, Bulgaria has signed agreements to avoid double taxation. This means that a company that has operations in both Bulgaria and another signatory country will only pay taxes in the country where that income comes from.
When you open a business in Bulgaria, there are also costs to pay employees’ salaries and pay for their health insurance and other benefits. Because of this, the country has a very low minimum wage and very low social insurance costs, even if the staff is well-trained (19.62% for the employer and 13.78% for the employee).
Competitive advantages on the Bulgarian market
Bulgaria is a good place to start a business because it has the lowest operating costs in the EU; a very skilled labour force; and a very low total average monthly pay.
Companies in Bulgaria use current accounting because the costs aren’t very high. Most companies hire an accountant once a year, which is allowed by the law in Bulgaria.
Why open a company in Bulgaria?
Bulgaria is now one of the fastest-growing countries in Eastern Europe because it has made a lot of changes in the last few years. A lot of people in this country work in information technology right now. However, manufacturing and agriculture are also well-established industries that foreign investors can get into. These are both good places for businesses to start.
In a report by the European Commission, they say:
If the country was hit by the pandemic in 2020, its economy is expected to make a mild recovery of 3.5% in 2021. The unemployment rate is also expected to go down to 4.8% from 5.1% in 2020. In 2022, Bulgaria’s Gross Domestic Product (GDP) is expected to rise by 4.7%, and the unemployment rate is expected to fall to 3.9%.