The combination of the following two factors makes Bulgaria attractive for registering a business company there. First, Bulgaria is an EU member state with all the advantages that the status brings. Second, the corporate tax in Bulgaria is the lowest in the Union. All other EU countries tax corporate income at higher rates.
Let us list the main reasons why you should consider establishing a company in Bulgaria:
- The corporate tax rate is 10%;
- You are free to use the international financial reporting standards instead of the local ones;
- Bulgaria has signed the Hague Convention, which means that your corporate documents can be apostilled;
- Registering a company in Bulgaria is comparatively inexpensive;
- With professional assistance from International Wealth experts, registering a company in Bulgaria is simple.
- You can open a corporate bank account in Bulgaria or in another country;
Registering a company in Bulgaria: important factors to consider
There is no perfect country in the world for establishing a company there. Registering a company in Bulgaria will bring you several important benefits but you will also have to deal with certain downsides. The main advantages of Bulgarian companies include the following ones:
- Good reputation of the country: Bulgaria has never been associated with offshore tax havens nor has it ever been blacklisted;
- Low-taxes are charged in Bulgaria;
- Bulgarian banks charge low corporate account maintenance fees in comparison to banks in other EU countries.
The main disadvantages of Bulgarian companies include the following ones:
- Accounting records have to be kept, financial and tax reports have to be filed every month;
- Medium-size and large companies are audited in Bulgaria;
- The Bulgarian language is hardly spoken anywhere else in the world and the key constituent documents need to be in Bulgarian, which means you will need a translator;
- A tax may be due when profits are repatriated to a foreign country;
- The Company Register is open to the public as well as the names of company founders and directors.
Basic information about taxes in Bulgaria
The tax system in Bulgaria is built on common European principles. The local tax authorities are generally friendly to the taxpayers. You have to bear in mind, however, that the VAT can be charged at two different rates in Bulgaria:
- 20% VAT is charged on added value of most products;
- 0% VAT is charged if the company is engaged in international transportation services and international freight.
The dividends paid by a Bulgarian company are charged at 5% but the rate can be reduced to 0% if the dividends are paid to the parent company registered in another EU country.
If the company reinvests its profits, the reinvestments are not included in the taxable base. This concerns both products and services that the company buys to help it grow. These can be PCs, notebooks, manufacturing equipment, utilities, and so on.
Requirements to companies registered in Bulgaria
You will have to meet certain requirements when opening a company in Bulgaria. These include the following ones:
- Form of company ownership. Several forms of company ownership are available in Bulgaria but the most popular one is the LLC.
- Charter capital. Firms in Bulgaria do not issue shares. Instead, they issue ‘participation certificates’ that reflect the share of company ownership that the certificate holder has. Charter capital shall be deposited but its minimum amount is only 2 Bulgarian levs (about 1 euro).
- Company directors. Your company will have to have at least one Director and it can be a natural person only. The Director’s residency does not matter but the company will have to have at least one Bulgarian Director to be able to set up a corporate bank account.
- Company shareholders. At least one natural person or legal entity. Residency does not matter.
- Corporate legislation. Companies are registered in Bulgaria in accordance with the Commercial Law of 01.06.1991.
- State duty. A state duty of 60 levs is payable every year by each company registered in Bulgaria.
- Bank account. It can be opened in Bulgaria or another country.
Please note that General Meetings have to be held at least once a year, in accordance with the Bulgarian legislation.
Take a trip to Bulgaria
You will not have to spend all your time in Bulgaria to manage your company but you will have to visit the country at least once in a while. What should you expect to find in Bulgaria?
First of all, Bulgaria is known as an affordable seaside resort country. Even though it’s an EU member country, Bulgaria is outside the EuroZone (the national currency is the lev), which makes the prices there lower than they are in Euro Zone countries. Everything is rather modest in Bulgaria but you will certainly find a lot of sunshine there. The Black Sea is warm, life is peaceful, the service is acceptable, and all of these advantages can be found in Europe.
Bulgarian resorts
We suggest that you allocate a few days for a visit to one of the resorts in Bulgaria when you go there on business. Bulgarian resorts are famous for their sunshine, golden send, and clear water of the sea. Below we list several most popular resorts in Bulgaria that you can choose from.
- Sunny Beach. The best-known and the largest resort area in Bulgaria on the shore of the Black Sea. The beach has been awarded a blue flag.
- A new resort, not-so-well-known. The place is developing rapidly, however, and soon it may well become a competitor to Sunny Beach. Good for family vacations with kids.
- Golden Sands. A crowded and loud resort loved by the young. Lots of entertainment including nightclubs, casinos, and a nudist beach. The place is also marked with a blue flag.
- An ancient resort city, calm, slow, and surrounded with peaceful landscapes.
- Saints Constantine and Helena. One of the oldest resorts in Bulgaria famous for its thermal springs. It is located at a unique place: in the forest on the seashore.
- A modern tourist complex with a well-developed infrastructure. There you can find 4 and 5-star hotels and villas for rent.
- Sveti Vlas. The air of this resort is considered curative for lung diseases. A distinctive feature of the place is tidiness everywhere.
- A large tourist center in the southeast of Bulgaria. In the high season, all hotels are booked.
- Located close to Burgas. A good place for a calm and slow vacation with children.
- Located close to the Turkish border. It is a small seaside settlement known for its beautiful and clean beaches covered with fine shell.
- The resort has been popular for a long time already. The service level is high and the infrastructure is advanced. Bars, casinos, and other entertainment facilities are at your disposal.
Personal security in Bulgaria
We have to note that the criminal situation has worsened in Bulgaria recently due to the large numbers of refugees from the Middle East. For this reason, we recommend that you take normal precautions when you are in Bulgaria. If you don’t walk alone late at night, however, you will be perfectly safe at any resort or in any city. Bulgaria is a nice country indeed.