GLS Law Company Services: Bulgaria – Company Formation
Registering a company in Bulgaria can be an excellent option for relocating your business abroad, expanding it, and entering new markets. The main advantages of having a company in Bulgaria include:
- Its geographic position at the crossroads between Europe, Asia, and Africa allows for unlimited expansion of business horizons and potential markets.
- As a member of the EU, local companies can freely trade and operate within Europe.
- The jurisdiction is among the EU countries with one of the lowest corporate tax rates.
- The cost of living and doing business in Bulgaria is significantly lower than in other EU countries, making it relatively affordable to rent office space, pay salaries, and cover overall company operational costs.
- The procedure for opening a company in Bulgaria is straightforward due to flexible requirements regarding documents and the company’s statutory capital.
- The country is very advantageous for activities in the IT sector, engineering, and other technical fields due to its highly skilled labor force.
Company Registration in Bulgaria – Legal Forms
You can register a company in Bulgaria in various legal forms, each with its features. When choosing the form of enterprise, it’s essential to consider the purpose of its creation and possible future implications. Before registering, it’s advisable to study the legal status of each form more closely:
Establishing a Company in Bulgaria as a Limited Liability Company (EOOD)
- Both individuals and legal entities can be founders (only one is sufficient).
- A minimum of 2 BGN (approximately 1 Euro) must be contributed to the statutory capital for business registration in Bulgaria.
- The statutory capital can be contributed in cash, as well as in-kind contributions such as property, equipment, machinery, etc.
- The company’s founders are only liable for its debts to the extent of their contributions.
Based on the information provided, registering a company in Bulgaria in the form of a Limited Liability Company (LLC) has very lenient requirements regarding statutory capital and the subject of registration. Bulgarian EOOD allows conducting business independently without involving other participants and with minimal financial investment at the start.
Company Registration in Bulgaria – Joint Stock Company (AD)
- Creating a Bulgarian Joint Stock Company (AD) requires two participants, which can be individuals or legal entities, without residence restrictions.
- The statutory capital of an AD is represented by shares, classified into public and private.
- To establish a public AD, a contribution of 50,000 Bulgarian levs is required, while for a private one, the threshold is much lower – 1 lev.
- Similar to an LLC, participants in a Joint Stock Company are not personally liable for the company’s debts.
Opening a business in Bulgaria as a Joint Stock Company is an excellent option for large enterprises with many founders planning to publicly issue shares and attract investments. Furthermore, a Bulgarian Joint Stock Company offers easier access to international markets and business expansion.
Bulgaria – Company Registration and Taxes
Before opening a company in Bulgaria, it is necessary to familiarize yourself with the potential tax obligations arising from conducting business in the country. Bulgaria boasts one of the lowest corporate tax rates among all EU countries, specifically:
- The corporate income tax rate for Bulgarian companies is 10%.
- Withholding tax is typically 10%, but double taxation avoidance agreements may stipulate different rules (for example, dividends may be fully exempt from tax).
- Capital gains tax, applicable when selling shares of companies or other capital assets in Bulgaria, is 5%.
Opening a Company in Bulgaria – Cost
The cost of registering a company depends on many factors, including the legal form, number, and legal status of the founders. To determine the exact cost, please contact us through the form on our website or via the contact numbers of GLS company.
