Introduction
Are you thinking of starting a business in Bulgaria? Then that is a wise and sound investment decision at least in this country. You will take advantage of a flat corporate tax of 10% that is the lowest in the European Union, and you will also benefit from the EU tax system that is favorable for businesses. Business owners will also benefit from a withholding tax system and a 5% dividend share for Bulgarians and 10% dividends for non-Bulgarians. Incorporating a company in Bulgaria will give you a competitive advantage of the low cost of production such as the low labor costs and employees. You will be able to get good management from a well-skilled workforce in Bulgaria.
Pre-Incorporation of an Entity in Bulgaria
Before incorporating an entity in Bulgaria, the representative of the entity should present the executive minutes from the previous shareholder’s meeting or a general meeting of a general partnership. After that, you should obtain a notary of a certified statement of consent from the commercial registry. The notary should contain a signature of the manager or director’s signatures in the case of a Limited Liability Company. You should obtain a certified certificate document from the bank that indicates you have contributed at least 70% of the minimum share capital. Both the signature specimen from the bank and the certified statement from the bank should be notarized at the agency registry. This procedure will take two days.
Actual Incorporation of an Entity in Bulgaria
Article 65 of the Commercial Acts provides that an entity is a separate legal person and may be incorporated by two members. You can incorporate more than two companies as no law restricts you from the number of companies you can incorporate.
According to the commercial registry, a company is incorporated on the date of registration with the commercial registry. Companies may be divided into capital companies and partnerships. The main difference between the two is the liability. They participate in a legal entity through the contribution of share capital.
After obtaining notarized documents, you should deposit them in the commercial agency. The notarized documents deposited include foundation deeds, Articles of Association, Minutes of the previous meeting, bank certificate from the bank indicates a minimum of 70% contributed share capital. You should contribute a minimum of 2BGN for a limited liability company and 50,000 BGN for the Joint Stock Company. This procedure will take 4 working days.
Post Incorporation of an Entity in Bulgaria
After incorporating a company in Bulgaria, you need to fill an application form at National Revenue Agency, including a foundation deed, bank account document, and an excerpt from the commercial registry so that you can get your VAT number for your business. It is done voluntarily for you to get a share of the low cost of doing business in Bulgaria, and you should also contribute a minimum of 25,000 EUROs annually.
You should get the premise of doing your business and recruit staff that will help you operate your business in Bulgaria. European Union residents upon incorporating an entity should provide a national identification document which and the information is recorded in newly incorporated business and translated into the local language.
For foreigners, they should present a copy of their passport and record the details in the newly incorporated company, and formally translated to the local language. Foreign legal entities incorporated in the European Union must produce current legal status from the registry and shareholder’s signature that indicates the intention of incorporating a new company in Bulgaria.
Documents required incorporating a company in Bulgaria
Passport copies of all shareholders, directors, and bank signatories legalized in Bulgaria
Bank deposit certificate confirming the payment of share capital
A power of attorney to: reserve the business name, submit incorporation documents, open an account on behalf of a foreign individual, legalize and translate to the local language
Conclusion
If you want to take advantage of the low cost of doing business in Bulgaria then you should incorporate a company in Bulgaria. This gives you a competitive advantage of operating in the stock exchange market in the European Union and makes the most of the low cost of production such as low cost of employees and highly skilled workforce as most Bulgarians are highly educated. Also, managers are not required to have work permits like in other countries.
