Company Formation in Bulgaria
Bulgaria is one of independent European states. Since 2007, it has been a member of the European Union; nowadays it may boast with the most favorable conditions to make investments. Foreign companies are incorporated here based on entirely transparent system. Moreover, non-residents are given the opportunity to get support from the government to develop their business. At that, the local offshore zone is not the same as in most EU member states. When it comes to the simplified taxation, it is only available for certain activities. All companies are obliged to keep records and submit reports. For all that, business registration allows a lot of opportunities. Companies gain the access to operate within developed European markets known for their economic stability.
- Joint Venture.
In this country, the execution of all documents during the company incorporation and its further maintenance shall be regulated by the Law on foreigners in the Republic of Bulgaria. There are relevant provisions of the tax legislation that are identical for all foreigners, either. This applies to the Law on Corporate Income Tax, Law on VAT and regulations that specify the tax amount and fees to the local treasury. As for the company founders, they may be both non-residents and local citizens.
Organizational and Legal Standards and Peculiarities of Jurisdiction
In Bulgaria, you mat take the advantage to create any type of company of two options:
For an LLC, the authorized stock capital should not be less than 2500 Euro, and from 25 thousand Euro for joint ventures. The registration requires immediate payment of 70% of the authorized stock capital; on the top of it, the identity of the director and the shareholder should be defined. Herewith, they are necessarily the persons that manage the company; it may be performed by other representatives.
If you do not manage to figure out the company, you’d better apply to experts from the Profinance for help. Things depend on the specifics of perspective activity and volume of financial transactions. As per applicable legislation, joint ventures have the opportunity to deliver banking or insurance services providing the license is there. If you have plans to engage in trading or investment activities, you should take care of LLC creation.
There are other forms of legal forms of business in Bulgaria. For example, it may be an entity with unlimited liability and its incorporation requires that the foreign co-owner was a permanent resident of the country. In case of non-residents, the partnership may be considered. In this case, it makes no sense to rely on benefits. All companies in this European country apply the identitcal procedure of taxation for all market players.
There are two VAT rates in Bulgaria. In most cases its size is 20%. However, for export operations and activity that are not subject to taxation as per international agreements, zero VAT rate applies.
Bulgaria has signed agreements with a variety of countries including Russia, according to which companies may avoid double taxation on export or import. The amount of corporate income tax here is the smallest among others. It is only 10%.
Taxation does not apply in cases as follow:
- cases of winning the lottery;
- cases of passive profit;
- receipt of the inheritance;
- earnings on the sale of shares or bonds.
Benefits of Company Formation in Bulgaria
The company registration within this country allows the great opportunity to enter perspective markets of other countries. The country renders support to entrepreneurs that attract investors. On the top of it, transactions are allowed in Bulgaria, without notifying relevant authorities of their activities.
The following may be distinguished among the major business advantages in this European country:
- the minimum amount of the corporate tax that is only 10 percent;
- simple registration procedure that takes short time, in addition;
- open access to markets of the eurozone countries; and
- opportunity to report as per IFRS standards.