Bulgaria can be an attractive choice for opening a business, and many Romanians have turned to this option in order to avoid jumping through some bureaucratic hoops imposed by Romania’s business legislation or because they have found some lucrative opportunities in the neighbouring country.
As in most countries, limited liability companies (OODs) are the most popular in terms of business structure. However, foreign entrepreneurs also have options like sole proprietorship, partnership, representative office, branch or subsidiary. In Bulgaria, a foreigner who registers a company in this market enjoys the same privileges and is subjected to the same corporate terms as that of locally-owned companies.
Foundation documents for a Bulgarian company must be executed in front of a notary, the minimum share capital to be deposited in a bank account, the notarized documents to be registered with the Commercial Register and the company must register for VAT.
Bulgaria can be very attractive for an entrepreneur who wants to open a limited liability company (OOD) because, unlike in other countries, there is no need to submit a minimal share capital at incorporation. If all goes well, it usually takes around two weeks to register the company.
Here are all the steps required for opening a limited liability company (OOD) in Bulgaria, according to the World Bank’s Doing Business 2018 report:
- 1. Obtain notarized documents – statement of consent and signature specimen of manager and certified copy of articles of incorporation – EUR 2.5 – 1 day
- 2. Deposit paid-up capital in a bank – EUR 5-15 depending on bank – 1 day
- 3. Register with Commercial Register at the Registry agency – EUR 28 for electronic registration and EUR 56 for hard copy – 2 days
- 4. Register for VAT – no charge – 12 days
- 5. Purchase and register fiscal device (cash register) – EUR 25-100 – 2 days (simultaneous with previous procedure)
- 6. Register company with National Revenue Agency – no charge – less than one day (online)
- 7. Register commercial object of the company – no charge – 1 week
You may need some specialised help to complete this process, especially if you can’t speak Bulgarian, and that will of course add to the costs of opening a business.
Bulgaria’s tax system is one of the most advantageous for business in the EU, with only 10 percent corporate tax and a 5 percent tax on dividends paid to non-residents (compared to 16 percent in Romania).
Bulgarian companies don’t have to submit quarterly fiscal statements, instead they must submit just one annual profit tax statement on March 31 of every year.
Social contributions in Bulgaria are also lower than they are in Romania, at 20.5 percent in total (11.6 for employers and 8.9 for employees), and salaries are slightly lower than in Romania. If the company’s administrator is not Bulgarian, an insurance of EUR 50/month must be paid.
VAT recovery can be completed in 45 days through a simple request with the Commerce Registry. VAT is paid only after the company’s turnover exceeds BGN 50,000 (EUR 25,560). The company is responsible for drawing up documents for VAT payments, as well as pay a separate tax of EUR 150, which doesn’t exist in Romania. The services of a specialised accountant (which is necessary once you become a VAT payer) cost around EUR 50, about half the amount an accountant would charge in Romania.