GENERAL INFORMATION

Method of Incorporation/registration:
The Articles of Association and the Incorporation Protocol must be signed by the shareholder(s). The minimum number of directors is one. The director must be a natural person of any nationality.

Source of Corporate Legislation:
Commercial Law of the Republic of Bulgaria – in force since 1991

Company Legal Form:
Limited company by shares with sole or multiple owners

Company Status:
Private local limited company

Corporate Documents and Language of Legislation:
For non-EU countries Apostille certification is necessary; Bulgarian.

Time required for Incorporation:
1-2 weeks following the provision of all the necessary documents and information

COMPANY’S NAME AND ACTIVITIY

Company’s Name:
A company may be registered with a name in Bulgarian which does not already exist. The Registry allows for companies to register the English version of the name officially.

Possible Endings:
EOOD (Sole Owner Limited Liability Company) or OOD (Limited Liability Company with several owners)

Restricted Names:
Any names related to licensed activities (Bank, Insurance, Tourist etc.)

Company’s activities:
Anything not explicitly forbidden by law, such as money laundering,smuggling operations, etc.

DIRECTORS, SHAREHOLDERS, MEETINGS

Number of Directors:
Minimum 1, only natural persons. Joint and single signature rights allowed by Law.

Local Directors Required:
No.

Corporate Directors:
Corporate Directors are not allowed.

Number of Shareholders:
Minimum 1, maximum – no limits.

Corporate Shareholders:
Corporate Shareholders are allowed.

Annual Meeting:
The company must hold a general meeting at least once per year (in order to approve the Annual Financial Report).

Locality of the Meeting:
Unrestricted

CAPITALIZATION AND SHARES

Capitalization:
Minimum 1 Lev per share, and minimum of 2 Leva per company. There is no maximum restriction on the amount of the share capital.

Paid Up Capital:
The full capital must be paid up into a special bank account, irrespective of the amount, and can be withdrawn after registration. The account may be transformed into a current account. The minimum
requirement for paid up capital is 2 leva.

Bearer Shares:
Bearer shares are not allowed.

Registered Shares:
When transferring shares, the registration of the transaction is required by law.

Annual Tax and duties:
Corporations: 10% on profit; 5% dividend tax.

Ordinary Tax Base, World-wide, Local:
Persons, including corporations, partnerships and bodies of persons carrying on any business, trade or profession in Bulgaria are subject to tax on profit. The sale of capital assets is subject to tax. Bulgarian companies which derive profit from foreign transactions are not exempt from the requirement to provide information on these transactions and pay the tax thereon.
Dividends are taxed after distributing dividends among the partners.

Exemption from VAT:
Value Added Tax (20%) is returned for consumer goods and services purchased on the company’s account, when they are used for the company’s activities – such as computers, laptops, production
chines, utilities etc.

Withholding tax on interest:
No withholding tax on interest.

Tax on dividends:
5% Dividend tax is paid to the state just before the payment of dividends.

Tax residence certificate:
“Certificate for local entity” is issued to the entity to confirm its local status and to be presented before other jurisdictions for the purposes of tax relief.

Period of Taxation:
Calendar year, from 1st January to 31stDecember of the same year.

Deadline for payment of corporate tax:
The deadline for payment of corporate tax is one month after the deadline for filing the Annual Return.

Advance payments:
Advance Corporate Tax payments may be made by companies whose annual turnover exceeded 300 000 Lev (150 000 EUR) during the previous year, and by companies in the year of their incorporation.

VAT Rate:
The current (2016) VAT rate is 20% for all economic activities, except hotel services, gambling, education and healthcare-related services, and any activity for which a Tax Credit has been used in another jurisdiction.

Double Taxation Treaties
Double taxation relief is available for 68 territories with which the Republic of Bulgaria has signed treaties for the avoidance of double taxation.

ANNUAL RETURN, ACCOUNTING AND AUDITING, FINANCIAL STATEMENT

Annual Return:
Tax Return together with Financial Statements are submitted to the Inland Revenue.

Accounts Required:
Accounts are prepared and filed by a licensed accountant for each Annual Statement.

Audit Required:
When a company possesses assets above 1,5 million leva or has incurred income from sales for over 2,5 million leva per year, or has an average of 50 working staff yearly, an obligatory audit is required.

Financial Statement to the Inland Reveune:
Art. 53-55 of the Commercial Act requires all persons and entities who perform commercial activities to maintain accurate records and keep them for at least five years. The duly kept records are considered
admissible evidence in Court.

Financial Statement to the Company Registry:
Required every year.

PUBLICLY AVAILABLE INFORMATION

Disclosure of Shareholders:
All persons stated as directors and shareholders are also liable for legal purposes. Their names are disclosed in the public part of the Register, and they will not be indemnified using a privately signed
document (no nominees are allowed).

Disclosure of Shareholders:
For natural persons – Name; For entities – Company name, registration number and country of registration.

Disclosure of other information:
Full registered address; Telephone and e-mail (if provided); Amount of capital and shares division.

OTHERS

Bank Account Opening Possibility:
Copies of incorporation documents must be shown to the bank staff. An Attorney bearing a notarised Power of Attorney may open a bank account without the presence of the director.

Exchange Control:
There are no barriers for access to the market by foreign businesses and no restriction on capital flows into and out of Bulgaria.

Legalization and Apostille Certification
The following documents are acceptable for Apostille:

1. Public documents bearing the true signature of Government representatives by the Consulate Service of the Ministry of Foreign Affairs;
2. Documents issued by Notary Public and Judges – By the Ministry of Justice;
3. Documents signed in front of Notary Public

Strike Off and Winding Up Procedures:

1.  Grounds for compulsory winding up of a limited company:
   • The company must be insolvent;
   • The company must be over indebted and unable to resolve its obligations. This criterion is checked by the court in each individual case
2.  For voluntary winding up – the company has by special resolution resolved that it shall be wound up.
   The application for winding up may be brought to court by creditors, or any shareholder or director. The procedure for both the compulsory and the voluntary winding up requires approximately six months from the time of filing of the application and the completion of the procedure.

Striking Off:
A due liquidation procedure is required for the official dissolution of the company. This is a court-based procedure and also requires a period of time for creditors to present their receivables (6 months from the application).