Setting up a company in Bulgaria

In common with other EU Member States and Central and Eastern European economies, Bulgaria has a fairly simple and straightforward process for registering a company. 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.

What NBLO can do for you

We will be able to prepare the requisite corporate documents and help you design a structure that will fit your purposes.

A Bulgarian company may be the ideal vehicle for your business growth. For more information please contact us at sofia@newbalkanslawoffice.com.

Please note that the New Balkans Law Office team provides company incorporation services in the UK as well. For more information please contact us at london@newbalkanslawoffice.com.



Recent work:

Stopping the improper use of insolvency proceedings

A client of our dispute resolution team (led by Kamen Shoylev and Yordan Neshkov) was recently the subject of an indirect claim by a Bulgarian bank with which this client has been engaged in a multi-stage dispute. Unusually, the bank acted through a vehicle registered in an African state, which made an unfounded claim in the tens of millions of euros against our client and sought the commencement of judicial insolvency proceedings against this client. The offshore vehicle was chosen to isolate the bank from liability and create certain evidential difficulties for our client's representation.

NBLO succeeded in terminating the insolvency proceedings, with direct loss fully awarded to our client. A second claim to recover our client's indirect losses is currently under way.

Where targeted in this way through insolvency proceedings, a company may be prevented from trading properly (e.g., by suffering restrictions on its financing or being unable to participate in public procurement).

Through our considerable experience in insolvency litigation, both entirely domestic and where there are European and cross-border elements, we are ideally placed to assist clients in resisting such attacks and recovering the real and considerable losses that may be suffered.

© New Balkans Law Office 2020