How to Open a Fundraising Account and a Bank Account in Bulgaria?

Opening a corporate fundraising account and bank account is a crucial step in the process of company registration in Bulgaria. This step is fundamental to ensure effective financial management and to fulfill the legal obligations required by Bulgarian law.

In this article, we will explore in detail how to open a fundraising account for a company in Bulgaria, covering all phases of the procedure, the necessary documentation, the involved costs, and practical considerations to keep in mind.

Corporate Fundraising Account in Bulgaria: What It Is and Why to Open One

When registering a company in Bulgaria, one of the first steps is opening a special bank account called a “fundraising account” (or “collection account”). This type of account is essential for collecting the capital required to establish the company.

The fundraising account is used exclusively to deposit the company’s initial capital, which may include both monetary and non-monetary contributions from co-founders. In practice, the capital represents the total value of the shares held by the partners. To complete the company registration with the Commercial Register, it is necessary to deposit at least the legal minimum of the share capital or the entire capital. This account also allows for future capital increases, such as issuing new shares or bringing in new partners.

Opening a fundraising account is an essential part of the company registration process in Bulgaria. Without it, the registration is not valid, as it is necessary to prove that the minimum capital has been deposited. The minimum required capital for establishing an EOOD (single-member limited liability company) is 2 BGN, but it is possible to register the company with a higher capital.

If you decide to establish the company with a higher capital, at least 70% must be deposited in the fundraising account. Without the required deposit, the company cannot be officially registered, resulting in delays and additional costs.

Read also: Key Competencies for Business Success

How to Open a Corporate Fundraising Account in Bulgaria

Opening a fundraising account requires specific steps and the presentation of certain documents. First, the account must be in the name of the company being established and can be opened by the co-founder, the legal representative of the company, or a third party authorized through a notarized power of attorney.

The documents required for opening the fundraising account include:

• The company’s articles of association and the general assembly document.
• Decision appointing the company manager.
• Signature samples and copies of identity documents of the individuals authorized to manage the account.
• Notarized power of attorney for any authorized third parties.

If the sole owner of the capital is a legal entity, a certificate of the current status of the owning company must also be provided.

Once the required capital has been deposited, the bank issues a certificate to be presented to the Registration Agency. This document certifies that the amount has been actually deposited and is being held in the company’s account.

Corporate Fundraising Account in Bulgaria: Fees and Opening Times

Opening a fundraising account involves signing a contract with the bank that establishes the fees for opening and managing the account. The fees may vary depending on the bank chosen and the current conditions of the financial market.

It is advisable to check in advance the conditions offered by different banks to compare fees and choose the most convenient solution. Fees include both account opening and monthly management costs, which may vary depending on factors such as the ownership structure of the company and the presence of foreign shareholders.

Usually, the specific contract for the fundraising account is converted into a contract for a regular bank account once the company is officially registered. However, this process may slightly vary depending on the chosen bank.

Opening a fundraising account is not always immediate, especially if the beneficiaries include foreign individuals. In such cases, Bulgarian banks apply verification procedures called “know your customer” (KYC). This procedure may take a few days or, in some cases, weeks.

The duration of the KYC procedure depends on the complexity of the company’s ownership structure and the country of origin of the foreign shareholders. It is important to keep in mind that banks have the right to refuse to open an account if they are not satisfied with the information provided during the verification process.

Read also: How to Choose the Right Accountant for Your Business in Bulgaria

Conversion of the Fundraising Account into a Corporate Bank Account

After the company is officially registered with the Commercial Register, the next step is to convert the fundraising account into a corporate bank account. Alternatively, you can also close the fundraising account and open a new one with another bank.

In practice, it is more convenient to convert the fundraising account into a corporate bank account, as closing the account often incurs higher fees. At the time of conversion, it is also advisable to activate electronic banking services to facilitate the daily management of the account.

It is important to also consider the payment authorization methods, choosing between electronic tokens or SMS depending on your needs and travel patterns. Additionally, accounts in different currencies, such as dollars and euros, can be opened if the company operates internationally.

After opening the corporate bank account, the next step is to start the company’s activities. It is highly recommended to consult an accountant or financial advisor in Bulgaria, such as Accountancy Bulgaria, who can assist in managing the company’s finances, VAT registration, and invoice preparation.

An experienced consultant, such as those at Accountancy Bulgaria, can provide valuable support to ensure that all operations comply with local tax and accounting regulations. This is particularly important to avoid future issues and ensure efficient financial management.

Conclusions

Opening a corporate bank account and a fundraising account in Bulgaria is a crucial step for company registration and for starting business activities. The procedure requires attention and preparation, especially if foreign individuals are among the shareholders. Carefully planning every detail and having all the necessary documents available is essential to avoid delays and bureaucratic problems.

It is advisable to compare the fees and conditions offered by different banks and consider additional services, such as electronic banking, to facilitate account management. Finally, relying on experienced financial consultants can help ensure optimal financial management and compliance with all local regulations. With proper preparation, opening a bank account in Bulgaria can be a straightforward process, ensuring a solid financial foundation for the success of your company.