Company incorporation in Bulgaria13 June 2020
In common with other EU Member States and Central and Eastern European economies, Bulgaria has a fairly simple and straightforward process for company incorporation. It is a strategic place for international business ventures which is in the upper third globally for ease of doing business. As an EU Member State, it offers financial, monetary and investment stability and low legal and political risk.
Incorporators are not required to be in Bulgaria in person as registration can be completed using a power of attorney.
New Balkans Law Office has extensive experience assisting foreign private and corporate clients to expand in Bulgaria by establishing a range of Bulgarian entities which would allow them to benefit from the advantageous tax regime (10% income tax; 5% tax on dividends) and from the dynamic and reliable business environment.
Here we outline the most important steps one needs to consider when setting up a company in Bulgaria
Choosing the legal form of the company
- Limited Liability Company – EOOD (an entity with a single shareholder) or OOD (an entity with two or more shareholders)
- Public Liability/Joint Stock Company – EAD (an entity incorporated with a single shareholder) or AD (an entity incorporated with two or more shareholders)
If required, entities can convert from one legal form into another after they are registered.
Limited Liability Company – EOOD or OOD
A limited liability company in Bulgaria can be incorporated with a single or multiple shareholders and a single or multiple directors. Shareholder(s) and Director(s) can be of any nationality and are not required to reside in Bulgaria.
The minimum capital required for setting up an E/OOD company is just ~EUR 1.
The E/OOD is also the most commonly chosen legal form used by foreign nationals to start a business in Bulgaria.
Public Liability/Joint Stock Company – EAD or AD
A public liability/joint stock company can be incorporated with a single or multiple shareholders. There are several requirements which are more stringent than with a regular E/OOD company that need to be met before incorporation. Those are:
- The initial share capital is a minimum of EUR 25,500, 25% of which (EUR 6,375) must be paid up on incorporation
- A board of directors comprising of at least 3 members must be appointed
An E/AD company generally is both a more sophisticated and more prestigious form which allows to raise capital more easily. It also is a prerequisite to a listing on a regulated securities market in Bulgaria or elsewhere in the EU.