Doing business in Bulgaria has never been easier. Company incorporation as well as all possible forms of starting business in Bulgaria are entirely covered by the modern and sophisticated corporate legislation adopted by The Republic of Bulgaria which consisting of Codes, Acts, Ordinances, etc. Generally speaking all available applicable laws in force allow miscellaneous commercial and other real life business activities under many various forms. The major and most important of the above mentioned and described acts that do regulate the entire complicated process of doing business in Bulgaria are the Constitution, the Commercial Code, and the Act on Contracts and Obligations. There also exist other acts and laws but they are applicable in specific cases – for example if some type of business requires licensing. Bulgarian economy is very liberal and licenses apply to a very limited number of business activities (for example weapons, gambling, etc.).
EU insurance agency can be set up via one of the following two formations in Bulgaria – an insurance broker or an insurance agent. These two types of insurance intermediaries are legally defined in Bulgarian Insurance Code in accordance with current EU legislation.
The figure of EU insurance broker registered in Bulgaria includes more options for independent work with many insurance companies and for that reason the requirements for its registration are stricter. They differ from the requirements imposed to the insurance agents. The most specific requirements imposed to Bulgarian insurance brokers are connected to the financial security and financial stability of the broker. First of all the broker must permanently provide the obligatory Professional Liability insurance valid on the territory of the entire European Union. The minimum insured amount shall be at least BGN 2.2 million for each insured event or BGN 3.3 million for all the insured events for one year. The second requirement relates to the financial stability of the broker. According to Bulgarian Insurance Code the performance of the obligations of the broker shall be secured by one of the following means:
Opening a bank account in Bulgaria for an offshore company? This is not a problem since Bulgarian offshore company formation followed by opening a bank account is a straightforward process which takes only a week time. The costs are minimal too.
But first one should know that Bulgaria is not a typical offshore zone. It is more of a tax haven. In simple words – you get the best from an offshore and a ‘normal’ company registered in EU. From legal point of view Bulgarian offshore companies are ‘normal’ companies, publicly registered and legally operating all across Europe and the world. They are registered under EU jurisdiction which means that they benefit from all EU financial and tax regimes. And from purely psychological point of view they are much more prestigious – because everyone would prefer to deal with an EU based company, which is publicly registered and strictly regulated under EU legal framework – rather than deal with a typical offshore company, which by default hides many details about its business activities, real owners, etc.
Running an online e-store and selling goods or services worldwide while paying the lowest corporate tax in the world? If this idea has already come up to your savvy business mind please search no further – Bulgaria is the place for setting up a limited company and conducting EU based e-commerce activities while paying only 10% tax, no matter where you are selling / shipping goods / services to!
Just like anywhere around the world, setting up an online web shop in Bulgaria does not require the availability of an offline store although you still have to register a Bulgarian company which will receive payments, issue electronic invoices, etc. The e-store is a computer software that provides the merchant (trader) with the opportunity to easily and quickly publish information for his goods on the Internet – and respectively sell goods / services and make profit. Although most legal requirements for traditional offline commercial activities apply for e-trade, some special rules need to be implemented. Applicable are mainly Bulgarian E-commerce Act and The Consumers Protection Act as well as other laws.
If you wish to register as a haulier transport company in Bulgaria and to operate on the territory of the entire European Union, you will need the Community License for road haulage.
This licence is granted by Bulgarian minister of transport, information technologies and communications through Transport Administration Executive Agency. In order to apply for a licence you need to incorporate a Bulgarian limited liability company or a sole proprietor with main activity carrying of goods for third parties, for hire or reward.
E-money, payment institutions, payment systems, online payment system providers – at a first glimpse all these terms look similar, but in fact they refer to different issues regulated by:
- Bulgarian Law on Payment Services and Payment Systems,
- Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market (amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC),
- Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions (amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC) and
- Latest PSD2 Directive 2015/2366/EU of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC.
The above documents regulate the requirements to the payment service providers which, apart from banks, inclusive European Central Bank and the national central banks of the member states, can be two types:
- Payment institutions
- Electronic money institutions
From 13 January 2018 all EU member states are obliged to apply the rules of PSD2. In October 2017 Bulgarian government proposed amendments to payment service legislation which are expected to be adopted by Parliament by the end of the year. Since new procedure and requirements have not been announced yet, the article below gives only basic guidelines on the matter based on current laws.
Bulgarian travel agency or tour operator businesses can be conducted only by Bulgarian companies that are listed in the Register of Tour Operators and Travel Agents, part of Bulgarian National Tourism Register. The registration is made with the Ministry of Economy, Energy and Tourism upon filing an application by the candidate together with a number of documents confirming that the applicant matches the criteria specified in Bulgarian Tourism Act and sub delegated legislation. Below we have summarized some of the basic registration requirements prescribed in Bulgarian Laws.
Company types are more or less different around the world.When speaking about specifics of any desired corporate entity to be set up, investors should know that there are half dozen of different types of companies in The Republic of Bulgaria and the main criteria is the active trading quality – its lack or availability. The major possible forms of business entities in Bulgaria can and should be further divided into two main big groups: a) traders and b) non-traders. Traders who are involved in active deals or any other commercial activities can be divided into another further two groups (depending on the special relevant legal act regarding their business status): A1) Traders registered under the Commerce Act; and A2) Traders who are subject to regulation by specific laws. The forms of opening a company and running an active business outlined below might be divided once again into two groups: 1. Commercial trading companies and 2. Other legal entities. There is also another group in which corporations are split into ‘normal’ (with two or more members) and single member trading companies.
A Bulgarian dormant company is an inactive company that does not trade and hence does not have any accounting transactions recorded at all. Then why should anyone need such a company?
Well, the reasons for keeping such a company registered in Bulgaria may be different. A good reason to use a dormant Bulgarian company is if you have a trademark or a brand name that you wish to protect. In other cases, if you have an active Bulgarian company, but business is not doing well and you need a break, you can make your company dormant so as to reduce expenses to minimum and until waiting for a suitable moment to start trading again.
Furthermore, a licence is not required – companies that provide short-term micro loan services operate as non-banking financial institutions which are subject to registration with Bulgarian National Bank (BNB). The procedure of obtaining a certificate is relatively quick – BNB completes registration within 30 days from the date of submitting application documentation.
The basic requirements for successful company formation and registration are:
- BGN 250 000 minimum capital (the minimum required capital must be maintained at all times)
- Owners / shareholders must have clean criminal record
- Managers should match the following criteria: higher education in Law or Economics, at least three years of experience in a similar field, clean criminal record