How to Open an SPV in Bulgaria: Complete Guide

Open a company in Bulgaria is an increasingly popular choice for both local and foreign entrepreneurs seeking to develop projects with minimal risk exposure. Among the different legal structures available in the Bulgarian business environment, one of the most strategic is the Special Purpose Vehicle (SPV). This entity, specifically created for a single objective, offers a combination of legal protection, operational flexibility, and tax benefits.

Choosing to open an SPV in Bulgaria means establishing a legal entity whose operations and assets are kept separate from those of the parent company. The primary goal is to isolate financial risk, ensuring that liabilities linked to the SPV’s activities cannot directly impact the parent company’s resources. In sectors such as real estate, infrastructure, or large-scale financing, this separation is not only beneficial—it is often essential for securing investments and guaranteeing project continuity.

What an SPV in Bulgaria

When a company decides to open an SPV in Bulgaria, it is essentially creating a separate legal entity with its own legal personality, bank account, and balance sheet. The SPV exists independently from its parent company, even if it is wholly owned by it. This separation is crucial for risk management: if the SPV faces financial difficulties, creditors generally cannot pursue the assets of the parent company.

The scope of an SPV’s activities is typically narrow and well-defined in its Articles of Association. This ensures that the SPV is used exclusively for its intended project and is dissolved or repurposed once the project reaches completion. In practice, an SPV in Bulgaria can be used for:

• Real estate projects – Developing residential complexes, commercial buildings, or hotels under a dedicated entity.
  
• Infrastructure projects – Managing the construction and maintenance of roads, bridges, or energy facilities.
  
• Financial structuring – Issuing bonds, securing loans, or conducting large-scale investment transactions.
  

By keeping the SPV’s scope specific, companies benefit from enhanced transparency for investors, simplified accounting for the project, and clearer separation of financial obligations.

Read also: Franchise Company Registration in Bulgaria: Opportunities, Requirements and Procedures

Why open an SPV in Bulgaria

There are multiple reasons why investors and companies choose to open an SPV in Bulgaria. Beyond the operational and risk management benefits, Bulgaria offers a favorable business environment that makes this structure even more attractive.

1. Asset protection An SPV ensures that the assets of the parent company remain insulated from any liabilities arising from the SPV’s activities. This protection is essential for companies engaging in projects with inherent risks, such as large-scale construction or complex financing deals.
2. Tax efficiency Bulgaria’s corporate tax rate of 10% is among the lowest in the European Union. Dividends distributed to non-residents are subject to a withholding tax of just 5%, and the country has signed numerous double taxation treaties that can further optimize the tax burden.
3. Operational continuity A well-structured SPV can continue operating even if the parent company experiences financial difficulties or insolvency. This independence can be crucial for securing financing and maintaining contractual commitments.
4. Investor confidence By isolating a project within a separate legal entity, an SPV can provide potential investors with greater transparency and confidence. They can evaluate the performance of the SPV without being influenced by the broader operations of the parent company.

Optimal legal form for an SPV in Bulgaria

In Bulgaria, the most common and practical legal form for an SPV is the limited liability company. This can take the form of an OOD (with multiple shareholders) or an EOOD (with a single shareholder). Both structures offer limited liability for their owners, meaning that their financial responsibility is limited to the amount of capital contributed.

The limited liability company structure is particularly well-suited for SPVs because:

• It is easy and quick to incorporate.
  
• The minimum capital requirement is low.
  
• It allows for flexible internal management.
  
• It provides clear separation of assets and liabilities.

Read also: How to Open an NGO in Bulgaria: Procedure and Benefits

Steps to open an SPV in Bulgaria

The process to open an SPV in Bulgaria is straightforward, provided that all necessary documentation is prepared correctly. The key steps include:

1. Drafting the Articles of Association This document outlines the purpose of the SPV, its internal management rules, and the scope of its activities. Since SPVs are created for specific projects, the Articles should reflect the precise nature of the project and its operational limits.
2. Appointing management An SPV must have a governing body—either a sole manager or a board of directors—responsible for its day-to-day operations and legal compliance.
3. Obtaining a tax identification number Every Bulgarian company, including an SPV, must be registered with the tax authorities and receive a tax identification number for reporting and compliance purposes.
4. Opening a corporate bank account This is necessary for depositing the initial capital and handling all financial transactions related to the project.
5. Registering with the Commercial Register The final step in the incorporation process is registration with the Bulgarian Commercial Register. This gives the SPV its legal personality and allows it to commence operations.

Once these steps are completed, the SPV can enter into contracts, hire employees (if necessary), and start carrying out its intended activities.

Accounting and compliance requirements

An SPV in Bulgaria is subject to the same accounting and tax obligations as other Bulgarian companies. It must:

• Maintain its own accounting records and prepare annual financial statements.
  
• File annual corporate tax returns.
  
• Register for VAT if its activities meet the relevant thresholds or involve VAT-taxable operations.
  

Because the SPV operates independently from its parent company, its accounts are kept entirely separate, which allows for precise tracking of the project’s financial performance.

Failure to comply with these obligations can lead to penalties, so it is highly advisable to work with local accountants who are familiar with Bulgarian legislation.

Accountancy Bulgaria can assist your business at every stage of the process to open an SPV in Bulgaria. Contact Accountancy Bulgaria, financial advisorin Bulgaria, today to launch your project quickly, securely, and in full compliance with regulations.