Your Ultimate Guide: How to Start a Company in Bulgaria as a Foreigner in 7 Easy Steps

Are you an ambitious entrepreneur dreaming of expanding your business horizons internationally? Look no further than Bulgaria! This vibrant Eastern European nation, a proud member of the European Union, has rapidly become a hotspot for foreign investors and business owners. With its strategic location, favorable tax policies, and a burgeoning economy, Bulgaria offers an incredibly attractive environment for setting up a new company. This ultimate guide will walk you through the entire process, outlining 7 easy steps to start your company in Bulgaria as a foreigner, ensuring a smooth and successful launch for your venture.

Introduction: Why Bulgaria is Your Next Business Destination!

Bulgaria isn’t just a beautiful country with rich history; it’s a land of opportunity for entrepreneurs. Its integration into the European Union has opened up a world of possibilities, making it an ideal gateway to the vast European market. Foreigners looking to establish a business here will find a welcoming atmosphere and a range of benefits that are hard to ignore.

Bulgaria’s Booming Economy and EU Benefits

Over the past decade, Bulgaria has demonstrated remarkable economic stability and growth. Its EU membership provides direct access to the single market, enabling businesses to trade goods and services across all 27 member states without customs duties or significant bureaucratic hurdles. This access also means potential eligibility for various EU funds and grants, further boosting your business prospects.

Low Taxes and Strategic Location

One of Bulgaria’s most significant draws is its incredibly competitive tax system. With one of the lowest corporate income tax rates in the EU, businesses can enjoy substantial savings. Geographically, Bulgaria serves as a bridge between Europe, Asia, and Africa, offering unparalleled logistical advantages for companies involved in international trade and distribution.

Friendly Business Environment for Foreigners

Bulgaria actively encourages foreign investment. The government has implemented various reforms to simplify company registration procedures and streamline administrative processes. English is widely spoken in business circles, especially in major cities, making communication and networking more accessible for international entrepreneurs.

Step 1: Choose Your Ideal Company Structure (EOOD vs. OOD)

The first crucial step is to decide on the legal structure for your Bulgarian company. The most common choices for foreign investors are the EOOD and OOD, both forms of Limited Liability Companies (LLC).

Understanding Limited Liability (EOOD – Single Owner, OOD – Multiple Owners)

Both EOOD (Еднолично дружество с ограничена отговорност) and OOD (Дружество с ограничена отговорност) offer limited liability, meaning your personal assets are protected from business debts and obligations. This is a critical advantage for any entrepreneur.

• EOOD (Sole Proprietor Limited Liability Company): This structure is ideal if you are the sole founder and owner of the company. It functions like a standard LLC but is designed for a single shareholder.
• OOD (Limited Liability Company): This is the go-to option if you plan to start your company with one or more partners. It requires at least two founders (individuals or legal entities).

Key Differences and Which One Suits You Best

The primary difference, as highlighted, is the number of owners. If you are starting solo, an EOOD is simpler and more straightforward. If you have partners, an OOD is the mandatory choice. Both structures are flexible and can be converted into the other type later if your ownership structure changes.

Step 2: Fulfill Essential Requirements for Foreign Entrepreneurs

Before diving into the paperwork, you’ll need to gather some fundamental documents and understand specific requirements for foreign nationals.

Required Documents (Passport, Address Proof, etc.)

Generally, you will need:

• A valid passport (and potentially a visa, depending on your nationality and stay duration).
• Proof of your current residential address (e.g., utility bill, bank statement, or official ID with address).
• A valid Bulgarian address for your company’s registered office (more on this in Step 3).

For non-EU citizens planning to reside in Bulgaria, you might need to apply for a long-stay D-type visa and subsequently a residence permit. Consult with a legal expert for specific requirements based on your nationality.

Appointing a Representative (if necessary)

While not strictly mandatory for company formation itself, having a local legal representative or a power of attorney for certain administrative steps can significantly expedite the process, especially if you cannot be physically present for every interaction. A trusted legal advisor can act on your behalf.

Step 3: Name Your Company & Secure a Registered Address

Every company needs a unique identity and a physical presence. This step covers both.

Choosing a Unique and Available Company Name

Your company name must be unique and not already registered in the Bulgarian Commercial Register. It’s advisable to have a few options ready. You can check the availability of a name through the Commercial Register’s online portal. The name must be in Bulgarian, but you can also register a name in English or another language as a secondary option.

The Importance of a Valid Registered Office

Every company in Bulgaria must have a valid registered office address. This is where all official correspondence and legal documents will be sent. You can either rent a physical office space, use a co-working space, or utilize a virtual office service provider. It’s crucial that this address is legitimate and that you can receive mail there reliably.

Step 4: Deposit Your Initial Capital (Minimum Share Capital)

Unlike many other countries, Bulgaria has an exceptionally low minimum share capital requirement, making it highly accessible for entrepreneurs.

Opening a Temporary Bank Account for Capital Deposit

You will need to open a temporary bank account (a “capital account”) in a Bulgarian bank in the name of your company (even though it’s not yet officially registered). This account is solely for depositing the initial share capital.

Understanding the Minimum Capital Requirement (e.g., BGN 2)

For an EOOD or OOD, the minimum share capital required by Bulgarian law is just BGN 2 (two Bulgarian Leva), which is less than 1 Euro. This incredibly low threshold significantly reduces the financial barrier to entry for foreign entrepreneurs. Once deposited, the bank will issue a certificate of capital deposit, which is a required document for registration.

Step 5: Prepare and Notarize All Necessary Documentation

This is where the detailed paperwork comes into play. It’s often the most complex step and where professional assistance is highly recommended.

Articles of Association, Declaration of Consent, Specimen Signature

Key documents typically include:

• Articles of Association (Statute): This is the fundamental document outlining the company’s purpose, structure, management, capital, and shareholder rights. It must be prepared in Bulgarian.
• Declaration of Consent and Specimen Signature: Each manager of the company must provide a notarized declaration of consent to manage the company and a notarized specimen signature (known as a “notarially certified signature”).
• Decision for Establishment: A formal decision by the founder(s) to establish the company.
• Proof of Address: Document confirming the registered office address.

The Role of a Notary Public in Bulgaria

A Bulgarian Notary Public plays a crucial role in authenticating many of these documents. They certify signatures and ensure that legal procedures are followed. You will need to sign certain documents in front of a notary. If you are not in Bulgaria, documents signed abroad may need to be apostilled or legalized and then translated by a sworn translator in Bulgaria.

Step 6: Officially Register Your Company at the Commercial Register

With all your documents prepared and notarized, it’s time to make your company official.

Submitting Your Application Package to the Registry Agency

The complete set of documents, along with the application form (Form A4), must be submitted to the Bulgarian Commercial Register (part of the Registry Agency). This can be done in person or electronically (if you have a qualified electronic signature).

Waiting for Approval and Obtaining Your UIC (Unique Identification Code)

Once submitted, the Registry Agency will review your application. If everything is in order, your company will be registered, and you will receive a UIC (Unique Identification Code), also known as a BULSTAT number. This UIC is your company’s official identification number, crucial for all future legal, tax, and administrative dealings.

Step 7: Post-Registration Essentials: Taxes, VAT, and Bank Account

Congratulations! Your company is officially registered. Now, it’s time to set up your financial and tax infrastructure.

Registering for Corporate Tax (if not automatic)

Upon registration at the Commercial Register, your company is generally automatically registered for corporate tax purposes. However, it’s always wise to double-check with your accountant to ensure all tax obligations are met and to confirm your tax registration status.

Understanding VAT Registration Thresholds and Benefits

VAT (Value Added Tax) registration is mandatory once your company’s taxable turnover reaches BGN 50,000 within a 12-month period. However, you can opt for voluntary VAT registration even if you haven’t reached this threshold. Voluntary VAT registration can be beneficial, especially if your business involves purchasing goods or services from other EU countries, as it allows you to reclaim input VAT.

Opening Your Permanent Corporate Bank Account

Once your company has its UIC, you can convert your temporary capital deposit account into a permanent corporate bank account. This account will be used for all your company’s operational financial activities.

Beyond Registration: Ensuring Long-Term Success

Company registration is just the beginning. To truly thrive in Bulgaria, consider these vital next steps.

Hiring Employees: Labor Laws and Social Security Contributions

If you plan to hire staff, familiarize yourself with Bulgarian labor laws. These cover employment contracts, working hours, leave, and social security contributions. Bulgaria has a relatively skilled workforce, and labor costs are competitive.

Obtaining Business Licenses and Permits (Industry-Specific Requirements)

Depending on your industry, your company might require specific licenses, permits, or registrations with regulatory bodies. For example, a restaurant would need health permits, while a financial services company would need licenses from the Financial Supervision Commission. Research these requirements thoroughly for your specific business activity.

Choosing a Reliable Accountant and Legal Advisor

Perhaps the most critical advice for long-term success: partner with local experts. A proficient Bulgarian accountant will ensure your company remains compliant with tax regulations, payroll, and financial reporting. A trusted legal advisor can help with contracts, labor law, intellectual property, and navigating any unforeseen legal challenges.

The Perks of Doing Business in Bulgaria as a Foreigner

Recap why Bulgaria stands out as an entrepreneurial haven.

Favorable Tax System (10% Corporate Tax)

Bulgaria boasts a flat corporate income tax rate of just 10%, one of the lowest in the EU. This significant tax advantage can dramatically improve your company’s profitability.

Access to the EU Market and Funds

As an EU member, Bulgaria provides seamless access to a market of over 450 million consumers. This includes the freedom of movement of goods, services, capital, and people, as well as opportunities to apply for various EU funding programs.

Skilled Workforce and Lower Operating Costs

Bulgaria has a well-educated workforce, particularly in IT, engineering, and various services, often available at competitive salaries compared to Western Europe. Overall operating costs, including rent and utilities, are also considerably lower.

Navigating Potential Challenges with Confidence

While the path is generally smooth, being aware of potential challenges and how to overcome them will ensure an even more confident start.

Language Barrier Solutions and Professional Translation

While English is prevalent in business, especially in major cities, official documents and some administrative interactions will be in Bulgarian. Hiring professional translators and interpreters, or relying on your legal/accounting firm, is a wise investment.

Understanding Bureaucracy and How to Streamline Processes

Like any country, Bulgaria has its share of bureaucracy. Patience and professional guidance are key. A local legal or consulting firm can significantly streamline processes, handle administrative tasks, and ensure compliance, saving you time and potential frustration.

Cultural Nuances in Bulgarian Business

Understanding local business culture can foster stronger relationships. Bulgarians value personal connections and trust. Punctuality is appreciated, and a direct yet polite communication style is common. Taking the time to build rapport can be highly beneficial.

Conclusion: Your Bulgarian Business Adventure Awaits!

Starting a company in Bulgaria as a foreigner is an incredibly promising venture, offering a blend of low operational costs, a strategic location, a favorable tax regime, and robust access to the EU market. By following these 7 easy steps and leveraging professional guidance, you can confidently navigate the setup process and lay a strong foundation for your business’s success. Bulgaria is ready to welcome your entrepreneurial spirit. Are you ready to embark on your exciting Bulgarian business adventure?