Business Opportunities in Bulgaria
The Bulgarian economy, market, and straightforward government rules make the country perfect for starting a business. After the country changed from a closed market to a middle-economy open market, establishing a successful business became more manageable.
Bulgaria is one of the newest members of the EU, and they are still adapting to the norms of the European Union. Being a member of the EU means the country can freely conduct business with other EU member countries, making it a premier location for businesses.
Bulgaria’s economy has constantly been growing for the last few years. In 2022, the country’s GDP increased by approximately 3.9%. It’s expected to increase by 1.4% in 2023 and 2.5% in 2024. The country is also expecting to receive up to 6.2 billion euros as a part of the country’s recovery grants in different areas, like digitalization, the private sector, green energy, and more.
Companies can start a business in Bulgaria and leverage the country’s growing economy. Read this guide to understand how to start a business here.
Benefits of Starting a Business in Bulgaria
There are immense advantages to doing business in Bulgaria, from the country’s rules to its geographical location.
- The country is strategically located in South East Europe between Asia and Europe. It provides companies easy access to Romania, Turkey, Greece, Macedonia, and Serbian markets. Its four airports, namely Burgas, Sofia, Varna, and Plovdiv add to its favorability. Having readily available airways and waterways helps companies communicate, import, or export easily with surrounding countries.
- The company registration process in Bulgaria is relatively straightforward. The Bulgarian Company Laws demand fewer documents, and it only takes a week or two to process the whole thing.
- The country has a low minimum wage and low social insurance costs. This means that the companies have to spend comparatively lower costs for their businesses.
- In the last five years, Bulgaria has experienced steady GDP growth, making it one of the best locations to start a business. The country’s debt-to-GDP ratio means low fiscal pressure to raise taxes.
Requirements for Starting a Business in Bulgaria
Here are the requirements you must fulfill to start a business in Bulgaria.
Bulgaria is a part of the European Union, so other EU citizens benefit from working in the country without any work visa. However, non-EU nationals require a visa to operate in the country. Depending upon the nature of the business, there are two types of visas for a non-EU national –
Short-stay visa (Type C)
Individuals or companies registering as limited companies, branches, or trade representatives can apply for a Type C visa. The short-stay visa requires the visiting individual to present a business invitation letter. This visa allows a stay of 90 days with a validity of 6 months.
Long-stay visa (Type D)
There are three instances for which companies need to apply for long-term visas:
1. Registration of trade representative offices where companies are not required to employ residents
2. Registration of Bulgarian companies where companies must employ ten residents for at least six months
3. Registration of a branch where companies must employ at least ten residents for at least six months
Company name and address
- Choosing a proper company name is the first step to setting a company in Bulgaria.
- After deciding on the preferred company name, a company address will be required to avail of the tax benefit.
- Usually, a law firm takes care of this process, but if anyone wants to register individually, it can be done at the Registry Agency of Bulgaria.
To do business in the country, opening a bank account at one of the local Bulgarian banks is necessary. Here the businessperson will have to deposit the capital for their business. All those bank details will be required for the company registration process in Bulgaria.
Some other documents that the businessperson will be required to present are –
- General meeting documents of the company
- Articles of incorporation along with registration form
- The written consent and notarized signatures from the representatives of the company
- Copies of the company owner’s identification proofs
It is crucial to remember that the primary language in the written documents should be Bulgarian. It can be a multilingual document, but in that case, translated documents in Bulgarian must be included.
Types of Business Structures in Bulgaria
There are six different types of companies or business structures in Bulgaria –
Limited liability companies
- The country’s most popular type of business structure is limited liability companies.
- These can further be divided into two different types.
- Single-member LLC or EOOD (Ednolichno Druzhestvo s Ogranichena Otgovornost) only needs one shareholder.
- OOD (Druzhestvo s Ogranichena Otgovornost) needs two or more shareholders.
- The minimum capital to be deposited for these types of companies is 2 Bulgarian Levs or 1 Euro.
Joint Stock companies
- Big businesses can open joint stock companies (AD/JSC).
- A minimum capital of 50000 Bulgarian Levs (25000 Euro) and at least three management board members are required to open this kind of company.
General/ Limited partnership
- Many foreign investors choose to open either general or limited partnership companies (SD/KD).
- When general partnership companies are liquidated, personal assets get affected.
- In the case of limited partnership companies, the company partners are only liable for as much as their capital shares.
- Most entrepreneurs looking to open a business independently choose sole proprietorship companies (ET).
- It’s similar to single-member limited liability companies. However, in sole proprietorships, the businessperson keeps the entire profit, but they have unlimited liabilities.
- The fifth type of business is branches of foreign companies that must be registered under the Bulgarian Trade Register.
- These companies are also required to run under the rules of limited liability companies.
- Subsidiaries of foreign companies need to be registered either as a limited liability company or a joint stock company.
- It needs to be registered at the Commercial Registry of Bulgaria.
- Personal details of the subsidiary’s representative and the registered address of the office are needed for the registration process of the subsidiary.
Company Registration Process
The procedure for incorporation of company in Bulgaria can ordinarily be completed in 4 easy steps, which are as follows:
Step 1: Choosing company name and address
- The company name can be reserved before the registration process begins, making the process much easier later on.
- It’s suitable that two more alternative names are chosen beforehand in case of any conflicts.
- Additionally, the name can be in any language, but it must be written in Cyrillic on the registration documents.
- Opening a business without a location in Bulgaria is possible. However, the company won’t get the country’s tax benefits in that case. Hence, it’s advisable to register a place as the company’s address.
Step 2: Opening a local bank account
- Opening a local bank account where the capital will be deposited is necessary.
- The capital for the company’s operational purposes will be deposited, and the company’s transactions will also occur through this account.
- A few exceptions exist to the banking procedure for the incorporation of company in Bulgaria. If the joint stock company opened in the country has its name on the Stock Exchange, then the minimum capital must be deposited in 1,00,000 Bulgarian Levs or 50,000 Euros.
Step 3: Government official registration
- First, all the necessary documents need to be readied. These documents are –
- Company name and address registration documents
- Bank details, including the proof of deposited capital
- Personal identification details of the company shareholders
- Notarized signatures of the shareholders
- Written documents of previously held general meetings
- Then these documents will be needed for registering the company under the Official Commercial Register.
Step 4: Stamp registration
- Stamp registration is an obligatory post-registration step.
- Every new company is required to have an official stamp which will be used to endorse the company’s official actions.
How Much Does it Cost to Incorporate a Company in Bulgaria?
Depending upon the nature of the company, the expenditure during the procedure for incorporation of a company in Bulgaria varies. However, the general cost is –
- Registration fee: The businessperson can hire a law firm that handles the entire company registration process in Bulgaria. The total expenditure during this process is around 400-800 Euros. This expense includes lawyer fees, name and company registration, and notary fees.
- Capital: The minimum capital to start a business in Bulgaria begins at 1 Euro or 2 Bulgarian Levs. However, if big business plans to open a joint stock company, the minimum capital would be 25,000 Euros or 50,000 Bulgarian Levs.
Are Foreigners in Bulgaria on Certain Passes Allowed to Start a Business in Bulgaria?
Foreigners can start their business operation in Bulgaria with a Type C and Type D visa. Non-EU members can visit Bulgaria with these visas for various purposes like education, medical treatment, family relationship, marriage, and more. Foreigners who have stated other purposes on their visas cannot start a business there.
The visa requirements to do business in Bulgaria is very minimal. Any citizen from the EU-member countries can do business in Bulgaria with their ID proofs, and they wouldn’t require any visa.
Government Assistance for Foreign-owned Businesses
The Bulgarian government has already made it easy to start a business by making the registration process incredibly easier. Some additional assistance a businessperson can get when setting up a company in Bulgaria are –
- One can get grants for starting a business in Bulgaria provided by the EU or the country’s government. One example is the ‘SME Fund’ provided by the EU or the ‘Technostart 3’ by the Bulgarian government. Another grant the Bulgarian government provides is the ‘Encouragement of Entrepreneurship,’ where the businessperson can get 50,000-2,00,000 Bulgarian Levs from the government.
- Corporate tax in Bulgaria is only 10%, and the government has shortened the VAT reimbursement period, which as of 2023, is less than a month or 30 days after filing.
- The government helps businesses by providing institutional support for building infrastructure near the invested place. Class A projects under the Investment Promotion Act even receive financial help.
- According to the country’s Investment Promotion Act, the government provides financial support to the investing company for any employee’s vocational training.
- The government reimburses the labor cost that the company bears for its employees.
How Can Multiplier Help?
Starting a business and conducting smooth operations in any country requires knowledge and understanding of the local rules and regulations. To stay compliant, collaborate with the global EOR platform – Multiplier.
Multiplier is an EOR platform that has a presence in around 150+ countries. We help you hire these employees and manage the local compliance complexities, draft labor contracts, help with employee taxes, payroll, and more. We have in-house experts who will handle these burdens without setting up a subsidiary. You can test new markets and attract talent at cheaper costs.