The Bulgarian economy has seen steady growth over the last few years. Its export market has developed well, and its workforce is well-educated. Several foreign entities have set up business facilities in the country.
The country is a leader in the outsourcing market. As per National Outsourcing Association in the UK, Bulgaria was the Offspring Destination for 2015. It has received similar accolades from the European Outsourcing Association too. The government has initiated several programs, such as the Innovation Strategy for Smart Specialization of the Republic of Bulgaria, to further its business reputation.
Bulgaria’s low corporate tax rate of 10% makes it a viable business hub. The personal tax rate is 10%, while the dividend blasting rate is 5%.
Setting up a sole proprietorship in Bulgaria is cost-effective and easier for initiating a business when compared with most other EU members. Setting up a sole proprietorship in Bulgaria is the right step for companies looking to expand any business globally. Here is a guide on how to register a sole proprietorship in Bulgaria with further details.
Who can be a Sole Proprietor in Bulgaria?
Any entrepreneur can establish a sole proprietorship in Bulgaria. This company type is owned and mainly operated by a single person. However, hiring staff is always allowed. Family members may be employed in such a setup too.
A sole proprietorship in Bulgaria is not a separate legal entity but an extension of an individual. It is an extension of its owner. Become a sole proprietor in Bulgaria easily if you have business permits and work visas in place. The latter is needed when you hire staff as a sole proprietor.
Benefits of Sole Proprietorship in Bulgaria
All independent consultants, business persons, and service providers can establish a sole proprietorship in Bulgaria. The primary benefits of a sole proprietorship are-
- Fewer hassles in company establishment
- Lesser documentation and legal work
- No capital specifications or mandates
- Quick processing span
- Personal tax norm applicability
- No interference from any secondary-party
- Access to overall profits
Documents Required for Registering Your Business in Bulgaria
The documents that you need to keep handy to register a sole proprietorship in Bulgaria are as follows:
- Bulgarian business ID
- Filled in incorporation form
- Approved name for business
- Documents of identity and original passport
- Valid visa to work and hire
- Documentation of local bank account opening
- Declaration of not being bankrupt or incapability of doing business in the judicial sense
Other Criteria for Registering a Sole Proprietorship in Bulgaria
Building up a sole proprietorship in Bulgaria is a quick process once the submissions are made to the Commercial Register. When creating a sole proprietorship in Bulgaria, there are a few things to consider.
- Keep a business plan ready in case any department seeks the same. This is very specific to certain niches and industries.
- Maintain a local bank account for transactional purposes.
- Register with the VAT department.
Once the sole proprietorship in Bulgaria is established, you must comply with the following post-registration compliances-
- Tax registrations and tax filings must be made on time.
- Obtain applicable permits or related licenses per the needs of your business activity.
- Ensure that all intellectual property backings against violation are in place as applicable.
- As a sole proprietor in Bulgaria, you must remember that all your details will be available on a public forum.
- Sole proprietors must pay 15% of their income as Bulgarian corporation tax.
- The VAT rate stands at 20%.
How to Register a Sole Proprietorship Company in Bulgaria?
To register a sole proprietorship in Bulgaria, ensure following the below steps
Step 1: Registration
While a sole proprietorship in Bulgaria might just be an extension of an individual entity, you must begin by signing on to the Commercial Registry, known as the Registry Agency of the Bulgarian Ministry of Justice.
- Even if you are a foreigner, you can freely do the same, provided you have a residence in Bulgaria.
- Ensure a declaration is attached stating that you do not have insolvency or bankruptcy declared against yourself. Sign off with your verified digital signature.
- Pay the fee of 15 BGN if you are making an electronic submission on the website, or pay 30 BGN if doing the same on-site at the Registry Agency division.
- You need to obtain the A1 form and make the application requests. The application is officially looked into on receipt, and the approval comes within a week or two.
- An individual can challenge the rejection of an application for a sole proprietorship in the relevant District Court within a week of receiving a rejection.
Step 2: Documentation
- Include the documents that verify your name, personal ID number, qualification certification, and license or permit with the application.
- Confirm a statement that no other sole proprietor entity stands registered in your name at this juncture.
Step 3: Choosing a name
- Upload a name that consists of your first and last names minus any short forms.
- The name must not be such that it misleads people.
Step 4: Tax registrations
- Ensure you file annual personal income tax as per the applicable rate as a sole proprietor in Bulgaria.
How Can Multiplier Help
A sole proprietorship in Bulgaria barely has any excessive requirements for registration. Research the best opportunities for your relevant business area before establishing a sole proprietorship in Bulgaria.
Once the operations begin and you need to hire in Bulgaria, management of all the processes will need assistance. This is where Multiplier can become a global employment solution provider for sole proprietors. It has end-to-end EOR solutions that help ease recruitment and business management processes well.