Company law in Bulgaria is regulated by the following acts:

• The Commercial Code,
• The Trade Register Act,
• Regulation no. 1 of 14.12.2007 on running, keeping and accessing the trade register from the journal of laws no. 18 of 27.02.2007, as amended,
• Stamp Duty Rates (collected by the registration agency).

In Bulgaria, there are several types of companies that may be established:

• A limited liability company (OOD),
• A one-person limited liability company (EOOD),
• A joint-stock company (AD – Akcjonerno drużerstwo),
• A branch / representative office.

The most often chosen options are limited liability company and one-person limited liability company, whose structures are very similar, the key difference being that to set up an OOD you need at least two persons, while an EOOD may be set up by one person. They may be legal or physical persons.

In both cases, information on shareholders and managers is public. The trade register also includes information on company name, its subject of activity, and address. Bulgarian law allows using nominee directors and nominee shareholders and we recommend this service to clients who value privacy. 

The minimum share capital is approximately 1 EUR. The capital may be paid in cash or by contribution. Shareholders’ liability is limited to the value of owned shares.

Limited liability company bodies are Shareholders’ Meeting (it has to take place at least once a year) and a manager or managers (equivalent of a director).

Every company has to have an incorporation report signed by all shareholders and a statement of the manager/managers. Relations between the company and the management are regulated by a management services agreement that should be prepared in writing.

The company should have its registered address in the territory of Bulgaria and a name that differs from the names of the companies that are already registered (every company receives a name exclusivity certificate).

Company documents may be prepared in any EU language, but they need to be accompanied by a sworn translation into Bulgarian.

Bulgaria has one of the friendliest tax systems in Europe. Income tax is just 10%, it is a linear tax. The basic VAT rate is 20%, reduced 9% and in case of exports and specific supplies of goods 0%. The following are not subject to VAT: financial services, health insurance, education, lease of buildings for residential purposes and sale of old buildings.

Capital gains tax is 10%, dividend tax 5% and tax on foreign companies’ revenue is 10%. It should be noted that limitation period in Bulgaria is just two years. 

Companies are obliged to maintain accounting books and prepare annual financial reports.

Bulgaria is a post-socialist country, where until 1989 agriculture and food production were administratively commanded. Later, the country went through a transformation and the existing plants were turned into independent enterprises. Agriculture is important for the economy. The main crops are grains, industrial plants, vegetables and fruit. Processing industry is also of importance, mainly steel, iron, lead, copper and zinc production, as well as production of machines and equipment, which is a remainder of communist government’s investments. Bulgaria is also the biggest exporter of rose oil in the world. An important source of income is also tourism, thanks to location by the Black Sea and Bulgaria’s pleasant, warm climate. 

The main trade partners of Bulgaria are Germany, Italy, Russia, Turkey and Greece.

Bulgaria’s political system is based on the constitution of 12 July 1991. Bulgaria is a parliamentary republic, with the president as the head of state, assisted in their official duties by the vice president. The head of the government is the prime minister elected by the president. Executive power is executed by a unicameral National Assembly, and judiciary power is in the hands of independent courts. Bulgaria has a stable democratic system.

Bulgaria has a stable banking system and the assets accrued in the accounts are safe. There are both national and international banks functioning here. Examples of banks in Bulgaria: UniCredit Bulbank, DSK Bank, First Investment Bank, Eurobank Bulgaria, United Bulgarian Bank, Raiffeisenbank, CIBANK, BNP Paribas, Citibank, ING Bank.