Setting up a business in Bulgaria
02 November 2009by Ina Dimireva -- last modified 04 November 2009
An overview of the process of starting a new business in Bulgaria and useful information about the documents required.
Legal requirements
Companies operating in Bulgaria are registered in the Central Commercial Register at the Registry Agency of the Ministry of Justice.
Once a company is officially registered, notifications must also be registered of any subsequent amendments to the company, including its cessation. Such registrations are both constitutive (i.e. the company is formed and the changes take effect as soon as the initial establishment and any subsequent changes are registered) and informative (the registered details are made publicly available).
Foreign citizens and firms can start businesses in Bulgaria under the same conditions as those applying to Bulgarian citizens and lawful residents.
The most popular business entities in Bulgaria registered by foreign citizens take the form of Limited Companies (OOD) and Public Companies (AD). The law also deals with other business entities, such as Sole Traders, but in such cases a person who wants to register such a company must have applied for and been granted permanent residency in Bulgaria.
The information pack 'Information Desk for Business People' has been produced by the Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA) and is distributed through local councils. The pack aims to ensure greater knowledge and activity amongst Bulgarian small enterprises in the context of European business, with all information required provided on one 'information desk'. BSMEPA has disseminated the pack to councils and regional administration centres free of charge; the pack has currently been distributed to 107 local councils.
'Information Desk for Business People' [BG]
In addition to smooth procedures for setting up a company, every new successful business requires a good commercial strategy and secure financing.
Administrative procedures
Steps for initial registration of a limited company (OOD)
Reserving a company name. This is done at the Registry Agency. Anyone can reserve a company name before submitting a registering application. The application for such a reservation takes immediate effect in the Commercial Register and applications are processed in order of entry. For every application submitted a check is made whether anyone else has the rights to that company name and whether any government tax is payable. The reservation is valid for 2 months during which time no other trader can register the same company name in the Commercial Register.
Holding a founding meeting. The Limited company can be founded by one or more actual or legal people - subscribers. They must not have been declared bankrupt. The subscribers state their stake of the capital of the newly founded company. Each one of the subscribers can be represented by a power of attorney with an explicit warrant of attorney endorsed with a notary stamp. Legal subscribers are represented by their legal representatives or by explicitly authorised persons.
Depositing the necessary capital in the bank. The minimum capital needed for a limited company is 5,000 leva. Partner stakes cannot be less than 10 leva. The capital has to be transferred into a bank account that has been especially opened for this purpose. Upon founding, at least 70% of the capital (3,500 leva of the required 5,000 leva) has to be paid into the account. A further condition is that each shareholder has to have paid in at least 1/3 of their stake, but no less than 10 leva.
Registration in the Commercial Register. The registration officer assesses the application for registration or cancellation by no later than the end of business on the first working day after receipt of the application, unless the law states that a different period is applicable. The applicant is then informed by the registration officer of the outcome.
Resources
Information services for starting a new business. The 'Roadmap for Business in Bulgaria' information pack.
The Roadmap for Business in Bulgaria [BG]
Programmes
'Project 100' has been implemented by the Bulgarian Ministry of Economy and Energy in partnership and cooperation with the UN Development Programme (UNDP) through the network of business centres and business incubators developed pursuant to 'Job Opportunities through Business Support' - JOBS - Memorandum of Understanding between the Ministry of Economy and the UNDP on 22 December 2003.
The project aims to develop a stable and competitive private sector by providing comprehensive and targeted assistance for the starting and developing of micro- and small enterprises in Bulgaria in the manufacturing and service sectors.
In 2008, the project secured financial help for start-up business entrepreneurs in the Smolyan, Pleven, Pazardjik and Yambol regions. The overall budget for the project for 2004 - 2008 was around 6.4 million leva and is guaranteed by the Ministry of Economy and Energy.
Personalised help and advice
Large investors can make use of various concessions and advantages, about which they can receive information, consultation and support from the Invest Bulgaria Agency.
The Enterprise Europe Network provides businesses with information and advice through its local partners.
Enterprise Europe Network – contact points – Bulgaria
SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.
SOLVIT – contact points – Bulgaria
Source: European Commission
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