How to Open a Branch Office in Bulgaria: Complete Guide

Opening a branch office in Bulgaria is one of the most effective solutions for foreign companies looking to establish a stable presence in the European market. Through registration with the Bulgarian company register, businesses can obtain legal recognition in a relatively short time. This setup allows companies to maintain their legal link with the parent company while benefiting from a competitive tax regime and a dynamic economic environment.

This in-depth guide outlines the key steps required to open a branch office in Bulgaria, detailing the administrative procedures, tax and accounting obligations, and operational aspects crucial for a proper launch.

Why Open a Branch Office in Bulgaria

Setting up a branch office in Bulgaria allows companies to operate locally under the control of the parent company, avoiding the creation of a new legal entity. This provides greater organizational flexibility and simplifies the relationship between central and local operations. It’s an ideal solution for businesses wanting to test the Bulgarian market or expand with a modest initial investment.

The country’s competitive 10% corporate tax rate, access to the EU single market, and availability of qualified local staff all contribute to its appeal. Additionally, Bulgaria’s strategic location provides direct links to Central Europe, the Middle East, and North Africa.

Documents Required to Register a Branch Office in Bulgaria

To register a branch office in Bulgaria, a file must be prepared containing documentation that proves the legal status of the parent company and its intent to operate in Bulgaria. These documents must be apostilled, translated into Bulgarian by a sworn translator, and legalized by the Bulgarian Ministry of Foreign Affairs.

Required documentation includes an extract from the parent company’s commercial register, the company’s articles of association, and a resolution approving the branch’s establishment. A notarized power of attorney is also required for the branch director, who may then delegate a legal representative to handle the registration. An authenticated signature specimen of the appointed director must also be submitted.

Additionally, the branch office must have a physical address in Bulgaria and a bank account in its name. For regulated activities, the parent company’s license—translated and legalized—must also be included.

Registration Procedure and Timeline for a Branch Office in Bulgaria

The process of opening a branch office in Bulgaria involves several clear steps. Once documentation is prepared, it is submitted to the Bulgarian Commercial Register. Upon approval, the branch must register with the National Revenue Agency to obtain a VAT number and open a bank account to manage financial operations.

The average processing time ranges from two to four weeks, depending on document completeness and administrative efficiency. Working with a local legal or tax advisor can significantly speed up the process and prevent common mistakes.

Tax Obligations for a Branch Office in Bulgaria

After registration, the branch office in Bulgaria is subject to local tax legislation. Corporate income is taxed at a flat rate of 10%, with annual returns required. VAT registration in Bulgaria is mandatory regardless of turnover, and monthly VAT returns must be filed—even in the absence of taxable activity.

It is also essential to comply with transfer pricing rules: all transactions between the Bulgarian branch and the parent company must be conducted at arm’s length to avoid disputes with the tax authorities.

Read also: Accounting in Bulgaria: A Practical Guide to Tax Management for Businesses

Accounting and Reporting for a Branch Office in Bulgaria

A branch office in Bulgaria must comply with Bulgarian accounting standards and maintain accurate and up-to-date bookkeeping. Periodic financial reports must be prepared for both the parent company and Bulgarian authorities. Depending on the size and sector of activity, annual audits may be mandatory.

Proper financial management ensures compliance with tax rules and provides valuable insight into the branch’s performance.

Operational Considerations for a Branch Office in Bulgaria

Operating a branch office in Bulgaria involves managing several practical aspects. Currency conversion risks should be assessed if the parent company operates in a currency other than the Bulgarian lev (BGN). It is also necessary to comply with labor laws covering working hours, minimum wage, and employee rights.

Registering intellectual property, such as trademarks or patents, locally is advisable to protect business assets. Furthermore, understanding local business culture helps in building strong relationships with employees, clients, and partners.

Read also: New VAT Rules in Bulgaria: Lowered Threshold for Mandatory Registration

Why Professional Support is Key to Opening a Branch Office in Bulgaria

While Bulgaria offers an attractive legal and tax environment, unfamiliarity with local procedures can cause delays or errors. Relying on a professional with experience in setting up a branch office in Bulgaria ensures full compliance and a smooth setup process.

From document preparation to day-to-day tax obligations, expert consultants like a Accountancy Bulgaria help you avoid common pitfalls and reduce time and costs. Rely on a tax advisor in Bulgaria to open and manage your branch office successfully.