Company in Bulgaria

General information

Tax rate

Time of establishment of the company

Minimum capital

Forming a company in Bulgaria

Bulgaria presented a balanced budget in 2006 for the first time since its transition to a market economy. Foreign investment has increased dramatically since 1998 and continue at a high rate today. On 1 January 2007, Bulgaria joined the European Union.

Bulgaria has been hit by the 2008 financial crisis, but to a lesser extent compared to other countries in Central and Eastern Europe. This is partly due to a stable and strong currency and a healthy, small banking sector, which is thus less likely to be affected by the crisis. Therefore, this country will be particularly suited to certain business projects.

Types of company

There are several types of businesses for foreign investors:

 Limited liability company (OOD)

• Stock company (AD)

• Partnership

• Permanent establishment

• Holding company

The OOD is the most common corporate status of medium and large businesses. It is usually used by foreign companies to set up in the country.

What are the requirements for setting up a company in Bulgaria?

Tax system

Bulgaria has become more attractive to investors because it has one of the most beneficial tax systems in Europe. Corporate income tax is 10%.

Under Community law, free movement of capital is the norm.

Accounting

Companies are required to prepare a balance sheet, income statement and an exhibit. Depending on the company structure, an annual audit and publication will be mandatory.

Tax rate

• – Tax on profits: 10% Municipal Tax: 10% Tax on capital gains: 10% Tax on interest and royalties: 10% Income from foreign enterprises: 10% Tax on dividends:5% VAT: 20%

Minimum share capital

50,000 BGN (25,728 €, 70% to be released on incorporation)

Shareholders

One associate minimum (LLC sole shareholder)

Foreign shareholders

Yes

Foreign Holding

Yes

Set-up time

3 weeks from the receipt of all documents

Corporate headquarters

Business address, transfer of telephone, fax and mail. Possibility of having a physical office in a business center (rates vary depending on demand)

Accounting

Annual financial report, exhibits and management reports mandatory, based on an estimated number of monthly invoices and a forecast of annual sales.

Company registration procedure

Taxes and finances

Local labor law

Other information