Establishing a Company in Bulgaria: Complete and Updated Guide

Bulgaria represents a strategic destination for starting business initiatives thanks to a combination of favorable economic and logistical factors. The country offers a welcoming business environment characterized by:

• Low Corporate Taxation: The corporate tax rate is one of the lowest in the European Union, at 10%. This makes Bulgaria one of the most competitive destinations for those looking to optimize corporate tax structure.
• Strategic Location and Advanced Infrastructure: Bulgaria, located at a strategic position between Europe and Asia, serves as a privileged access point for international trade. The country’s infrastructure, including transport networks and high-speed internet connectivity, facilitates the development of business activities on a global scale.
• Qualified Workforce: The Bulgarian labor market is characterized by a wide availability of qualified professionals, many of whom have language skills in English and other European languages, able to meet the needs of various sectors at a lower cost compared to most other European countries. This is a significant competitive advantage, particularly in IT, outsourcing services, and other highly specialized fields.
• Stable Economy: The Bulgarian economy shows continuous growth in Gross Domestic Product (GDP) and positive macroeconomic indicators, contributing to a favorable environment for investments.
• Safe and Stable Business Environment: Bulgaria’s membership in the European Union ensures a regulatory framework harmonized with EU standards. This facilitates company registration and provides investors with legal security and stability. Bulgaria’s presence in international organizations such as the EU, NATO, and the WTO is an additional element of attractiveness for investments.
• Cost Efficiency: Living and business costs are generally lower compared to many other Western European countries, making Bulgaria an attractive option for those looking to reduce operational costs.

Let’s see the steps to establish a company in Bulgaria and benefit from all these advantages.

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How to Establish a Company in Bulgaria: Detailed Steps

1. Selection of Business Structure
   The first step in establishing a company in Bulgaria involves choosing the type of business entity best suited to your needs. The most common company structures include:
   • Limited Liability Company (LLC or OOD): suitable for small and medium enterprises looking to limit shareholder liability.
   • Single-Member Limited Liability Company (SMLLC or EOOD): a variant of the LLC for a single owner.
   • Joint Stock Company (JSC or AD): typical for larger businesses looking to access wider capital through shareholders.
   • Representative Office: an option for foreign companies wanting a presence in the country without forming a separate legal entity.
2. Tax and Regulatory Procedure
   Once the business structure is selected, several legal steps must be completed and the required documentation prepared.
   • Seek Regulatory and Tax Assistance: It is essential to work with local experts on tax regulations to prepare key documents like the shareholders’ meeting minutes and the articles of incorporation. Expert advice ensures that all procedures comply with Bulgarian regulations.
   • Deposit Capital: It is necessary to open a corporate bank account and deposit the minimum share capital. For LLCs, the required minimum capital is 2 BGN (about 1 euro).
   • Register with the Bulgarian Commercial Register: Registration involves submitting the articles of association, resolutions to establish the new company, and verifying documents notarized by a notary.
3. VAT Registration
   For companies with annual turnover exceeding 100,000 BGN, VAT registration with the National Revenue Agency (NRA) is mandatory. VAT registration is a fundamental requirement for operating in compliance with local tax regulations.
4. Registration of Employment Contracts
   Employment contracts must be registered with the NRA. This includes specific information on the employer and employees, as well as employment conditions such as salary and duties.
5. Registration of Business Premises
   If the company involves the production or distribution of food products, it is necessary to register the operating hours and premises with the local mayor’s office.

Read also: Company Formation in Bulgaria: How to Do It?

Conclusion

Establishing a company in Bulgaria is a strategic choice for entrepreneurs looking to expand their business in Europe. Thanks to competitive taxation, a qualified workforce, and a strategic geographic location, Bulgaria offers a favorable environment for business growth.

To start a business smoothly in this promising context, it is advisable to carefully follow the steps outlined above and seek the support of bookkeeping local experts, such as Accountancy Bulgaria, which for years has been helping companies that want to company registration in Bulgaria to adapt to the current regulations and benefit from all the incentives that the country offers to entrepreneurs and digital nomads.