Bulgaria is the European Union state with the lowest tax burden; only a flat tax of 10% on both company profits and the income of a natural person, regardless of declared income.
Six free zones have been set up in Bulgaria,within which neither customs duties nor VAT is applied to goods imported from non-EU countries. Additionally, the goods can remain in the free zone of reference for an unlimited period.
To open a limited liability company in Bulgaria (OOD if with more than one partner - EOOD if with sole partner) just submit an application, with the relevant documents translated into Bulgarian, to the Registration Agency at the Ministry of Justice. This application can be submitted in any territorial unit, regardless of the company's registered office, and the relevant form can be found on the Business Register site. The application will be evaluated by the state administration within a maximum of 14 days.
Under Bulgarian law, a limited liability company may be either 'dormant' or 'operational'.
A "dormant" LLC is normally established for the purpose of owning movable and immovable property and therefore will only be provided with a tax code and will not require any accounting activity. The only cost will be the annual fee for registration in the Business Register.
An "operative" LLC, on the other hand, will have to manage accounts and if it also wants to bill outside Bulgaria it should acquire intra-Community VAT code (VIES).
The necessary elements for the establishment of a company in Bulgaria are the same as those required by Italian law, namely company name, share capital and its division into shares, registered office, partners, corporate purpose, administrator or board of directors, duration. Before submitting documents for establishment of the company, it is necessary to make sure that the name chosen is not already used by another company registered in the Business Register. If the name is available, it can be "committed" for 6 months after paying a fee.
The minimum capital required for the establishment of limited liability companies is 2.00 lev (1.00 euros) but it should be borne in mind that the banking system and third parties look at the substance of the business and, depending on the programmes, it may be useful to pay a non-symbolic capital. The capital must be fully subscribed and paid at the minimum of 25%. The certificate attesting to reservation of the company name, the Articles of Association, the company's minutes and an example of the administrator's signature countersigned by a notary is submitted to the chosen bank, and an escrow account must be opened into which to pay the share capital. The certificate attesting to payment of the shares, issued by the bank after one business day, must be attached to the application form. Share capital is divided into units, the value of which cannot be less than 1 lev. The distribution among partners and the value of the shares of each one must be indicated in the Articles of Association. Both natural and legal persons, whether Bulgarian or foreign, can qualify as partners. In the event that a partner is a company (including Italian), the legal representative will appear and the documents attesting to his/her powers must be attached.
The registered office must be located in the Republic of Bulgaria. Finally, it should be remembered that the registered office is one of the constituent parts of the company and therefore its variation may require a qualified majority; in any case, a new entry in the Business Register is required.
The costs for starting a limited liability company in Bulgaria amount to about 800 euros.
|Average start-up times||1-2 days|
|Availability of pre-established (ready-made) companies||Yes|
|Average taxation||10% - Flat tax|
|Published information about the company's directors||The names of directors and shareholders appear in the Public Register.|
|Legislation and controls||
The reference text for the establishment of companies is the Corporate Income Tax Act (CITA)
|Confidentiality||Bearer shares are not permitted|
|Risk indicators||Average political risk: 43%