Financial license in Bulgaria can be obtained quickly and at quite reasonable costs. Bulgarian financial institutions are governed by the Credit Institutions Act and in accordance with its Art. 3, a financial institution is a legal entity different from an institution or an industrial holding. Main activity of licensed financial institutions in Bulgaria is performing one or more of the following:

1. Providing payment services under the Payment Services and Payment Systems Act;
2. Issuing and administering other means of payment (travellers checks and letters of credit) as far as this activity is not covered by item 1;
3. Financial leasing;
4. Guarantee transactions;
5. Trading on your own account or for account of customers in foreign currencies and precious metals with the exception of derivative financial instruments on foreign currency and precious metals;
6. Currency brokerage;
7. Acquisition of credit claims and other forms of financing (factoring, forfeiting, etc.);
8. Issuing electronic money;
9. Acquisition of shareholdings;
10. Lending funds, that are not raised through public deposits or other repayable funds.

Financial institutions are subject to registration with BNB (Bulgarian National Bank) public register. A very important detail in this regard is that if there is a specific activity under a special law – the arrangements for licensing a Bulgarian financial institution are different. For example, a financial institution that issues electronic money should be registered and licensed under the Payment Services and Payment Systems Act.

The Credit Institutions Act sets out the following common requirements for the applicants:

1. To have a commercial registration in the Republic of Bulgaria as a limited liability company, joint stock company or a limited partnership with shares;
2. The scope of activity of the company shall not include services / activities different from those listed above;
3. Company’s own capital shall be in structure and in the amounts determined by Ordinance No 26 of 23.04.2009 for financial institutions, whereas only registered shares are allowed;
4. Main business activity shall be conducted on the territory of Republic of Bulgaria;
5. Managers and representatives of the company shall have the necessary qualification, experience and reputation, and the people who directly or indirectly hold the majority of the shares shall match certain criteria for reliability, financial stability and good reputation.

There are certain requirements to the person managing or representing a financial institution licensed in Bulgaria as well as natural persons who directly or indirectly hold a qualifying shareholding in the capital of a financial institution, beneficial owners, and persons who by law represent legal persons holding directly or indirectly a qualifying shareholding in the capital of a financial institution. Any such person shall:

1. Have a higher education;
2. Have at least 3 years of experience in economics, law, finance, IT;
3. Have not been convicted of a crime of general nature, unless rehabilitated;
4. For the last two years have not been a member of a management or supervisory body or a general partner in a company terminated due to bankruptcy in case unsatisfied creditors are left;
5. Have not been deprived from the right to hold responsible positions;
6. Have not been included in the list under art. 5 para. 1 of the Law on Measures Against Financing of Terrorism.

For registration and enlistment of a financial institution in the National Bank Register the capital of the company should be paid (in the form of cash contributions) in amount of BGN 1 000 000 (one million). The contributions to the minimum required capital must be paid in cash and should have been effected with own funds. A registered financial institution shall at all times maintain equity capital of not less than BGN 1 000 000. Equity shall be the sum of the registered and paid-up capital, the company’s reserves formed in accordance with Article 246 of the Commercial Law, retained earnings for previous years and current earnings as at the relevant reporting period, reduced by the loss for previous years and the current loss as at the relevant reporting period. In the case of repurchased shares, the company’s equity is reduced by the amount of the repurchased shares.

The administrative fee for processing the application and registration of financial institution and its entry in the register of the National Bank is BGN 3000 (three thousand). Additional fees are also payable for issuing certificates and making changes in the registered circumstances.