Dormant Companies in Bulgaria: Updated 2025 Guide

To open a company in Bulgaria can be a strategic move for international entrepreneurs. However, not all companies remain operational throughout their lifespan. Periods of inactivity are common, but it’s important to understand that inactivity does not mean the company is exempt from obligations. Many business owners mistakenly believe that having no activity automatically means their company becomes “dormant” and no longer needs to comply with regulations. This is a misconception.

This guide explains what “dormant” means in the Bulgarian context, outlines the obligations for companies with no activity, and highlights the key differences between suspended and terminated companies.

Understanding the Terminology: Inactive, Dormant, and Terminated

In Bulgarian law, these terms have specific meanings or implications:

• Inactive Company (Company with Suspended Activity): A company that has temporarily ceased its business operations but remains legally registered and intends to resume activity in the future.
  
• Dormant Company: This term is commonly used informally but has no distinct legal definition in Bulgaria. For practical purposes, a dormant company is treated as an inactive company. The same obligations apply.
  
• Terminated Company (Company with Terminated Activity): This refers to a company that has been officially liquidated and removed from the Commercial Register. It no longer exists as a legal entity and is completely different from a suspended or inactive company.
  

Understanding these distinctions is essential to avoid costly mistakes, such as initiating unnecessary liquidation procedures or failing to comply with ongoing legal requirements.

Why the Distinction Matters

Misunderstanding the difference between suspended and terminated activity can lead to serious consequences:

• Unnecessary procedures and costs: A company may initiate complex and expensive termination procedures when only a suspension was intended.
  
• Missed deadlines and penalties: Failure to file mandatory declarations—such as zero VAT returns or annual statistical reports—can result in financial penalties.
  
• Loss of legal status: If a company is wrongly assumed to be exempt from obligations due to dormancy and fails to comply, it may lose its legal status.
  

For these reasons, it’s crucial to understand that “dormant” does not mean “exempt” under Bulgarian law.

Key Obligations for Inactive or Dormant Companies

Even if a company has no business operations during a given period, certain formal obligations remain in place. These apply whether a company is referred to as “inactive” or “dormant”.

1. Zero VAT Returns (for VAT-Registered Companies)

If a company is registered for VAT in Bulgaria, it must file monthly VAT returns even if no transactions have occurred. In such cases, “zero” declarations are submitted. The filing requirement continues until the company is officially deregistered from VAT (note: this procedure is not covered in the original source text, so no assumptions are made here).

2. Annual Declaration to the National Statistical Institute (NSI)

Each year, the company must submit a declaration to the NSI confirming that no business activity was carried out during the reporting period. This is a mandatory requirement for all companies, including those without any operations.

3. One-Time Declaration to the Commercial Register

Inactive companies must file a one-time declaration with the Bulgarian Commercial Register to state that they did not conduct any activity in a specific year. This declaration exempts the company from submitting its annual financial report for that year.

For example, if a company submits this declaration for 2024, and remains inactive in 2025, no further declaration to the Commercial Register is needed. However, all other obligations, such as filing zero VAT returns or NSI declarations, still apply.

Read also: How to Open a Branch Office in Bulgaria: Complete Guide

Suspension vs. Termination: Legal and Operational Implications

These two statuses have very different consequences and must not be confused.

Suspension of Activity (Inactive/Dormant Company)

• The company is still legally registered.
  
• It has paused its business operations but intends to resume them in the future.
  
• It must continue to fulfill certain formal obligations: VAT declarations (if applicable), NSI reporting, and the one-time Commercial Register declaration.
  

Termination of Activity (Closed Company)

• The company has gone through formal liquidation and is removed from the Commercial Register.
  
• It no longer exists as a legal entity.
  
• This is a completely separate legal process that ends the company’s existence.
  

Understanding this difference is key to ensuring the company is managed correctly, whether activity is only temporarily suspended or the intention is to close the business permanently.

Read also: Guide 2025 to Asset Depreciation in Bulgaria: Rules, Methods and Tax Implications

Summary of Obligations for Inactive Companies

Here is a summary of the main obligations that remain for companies with suspended activity in Bulgaria:

• VAT Returns: If VAT-registered, monthly zero returns must be submitted.
  
• NSI Declaration: Must be filed annually, even if there was no business activity.
  
• Commercial Register Declaration: A one-time declaration stating inactivity for a specific year, which exempts the company from filing a financial report for that year.
  

These obligations apply only to companies that are still legally active and have suspended—but not terminated—their business operations.

In Bulgaria, the term “dormant” is not legally defined, but in practice, it refers to companies that are temporarily inactive. It is important to note that this status still carries formal responsibilities. Suspension of activity does not eliminate the need for filing VAT returns, statistical declarations, or inactivity statements with the Commercial Register.

For entrepreneurs and business owners who are unsure how to navigate these obligations, especially in the case of long-term inactivity, working with a qualified accounting professional is strongly recommended.

To ensure compliance with Bulgarian regulations during periods of inactivity, you can rely on Accountancy Bulgaria and its expert team of Accountants in Bulgaria.