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Starting a new company in Bulgaria

The basic forms of company administration in Bulgaria are the so called:

– Single Person Limited Liability Company (the owner is single). The Bulgarian abbreviation for it is EOOD. This is the most used form in the country. A little more than 1 Euro is required as a company’s capital. You should have a Bulgarian bank account where this capital should be transferred. This bank account should be opened from the owner of the company or by his representative who must have power of attorney to do that. The VAT registration is mandatory when company’s turnover exceeds 50000 BGN almost everyone prefers to make this registration before starting the company’s activity because it is easier. (see also VAT registration)
After receiving the confirmation that the company’s capital is imported you should make a registration of the company in the Trade register. Once this registration is completed you should register at NOI (National Social Security Institute)
– Private Limited Liability Company (the owner is multiple) The Bulgarian abbreviation for it is OOD. The procedure and requirements are almost the same. The major difference is that you should elect a supervisory board of directors. After that a management should be appointed. The procedure for registration is a little bit longer compared to the Single Person Limited Liability Company.
– Joint Stock Liability Company is the third form of the company. It is also called Public Limited Company. The Bulgarian abbreviation for it is AD. What is specific is that the capital is shared between the members which are liable to the amount of the capital invested. The capital required is from 50 000 BGN to 100 000 BGN depending on the company’s activity. The procedure for registration is identical.

* Founders in Bulgaria can be local individuals, as well as foreigners and legal entities.
* Each company should have registered office in Bulgaria.
* Тhe fee for issuing Power of attorney, including state fees costs up to 130-150 euro. The maximum period for filing documents in the Bulgarian Trade Registry is 7 working days.

ACCOUNTING SERVICES BULGARIA can assist you with the documentation for the registration. Also we are able to provide you this company registered office (see also company registered office)

Liquidation of the company (closing the company)

Firstly, an application for issuing a certificate for liquidation should be held in National Revenue Agency. After receiving this certificate together with a description of the management body for the liquidation itself, the procedure for liquidation and the name of the liquidator should be brought the National Trade register. The person able for the liquidation
(the liquidator) should be registered in the Trade register and after this he takes all the responsibility and obligations for the liquidation. The liquidator could be a person form the management body, could be also separately elected from the management body to fulfill the liquidation procedure. After the decision of The Trade register about the company’s liquidation a representative should invite the creditors of the company to pay them. After period of six months the liquidation can be preceded by the deletion of the company from the Trade register. This deletion is made after receiving documents from the NRA which verify that the pay slips (accounting documents for employees) are transferred to National Social Security Institute or if the company hasn’t had any employees the documents from NRA confirm that there were not employees.

During the liquidation period the company should prepare the accounting documentation needed for the procedure, as well as Annual Finance Report that should be held to the Trade register. The Trade register has a web site where you can find information for all companies that are registered or are in procedure of liquidation.

VAT registration in Bulgaria

The VAT registration could be made voluntary without any activity of the company.
The VAT registration is obligatory when the turnover exceed 50 000 BGN/25 000 EUR within the 12 consecutive months.
However, our advice is to make this registration before starting any activity because it is much faster and easier.
The procedure for VAT registration is no longer than 14 working days.
The standard procedure for registration starts with application that should be held to the National Revenue Agency (NRA) by a person with representative powers or a person whose name should be written in a notarized power of attorney. The NRA will verify the application within 14 days maximum issuing a document that allows/refuses the registration.
The VAT in Bulgaria is 20%;
The VAT for tourism is 9%;
The VAT on deals between companies registered in Bulgaria and the others companies in EU is 0%

ACCOUNTING SERVICES BULGARIA can assist you with the documentation for the registration.

Cash accounting regime

As of 01 January 2014 the VAT Act envisages a new special regime of cash accounting of the VAT. It aims to help small businesses who have difficulties to pay VAT before receiving payments by their customers for the delivered supplies of goods and services. An important requirement is the availability of preconditions for the company being granted a tax credit when making the payments to its suppliers.

The tax becomes chargeable at the date of full or partial payment in proportion to the payment for the goods and services.

The cash accounting regime is applicable only if:

– There is a deal that is charged with tax rate of 20%

– The entities carrying out the deal are VAT registered

– The entities who carry out the deal are not associated

– Payments for the deal are made only via bank transfer

The cash accounting regime is not obligatory.