Registering a company in Bulgaria – EOOD/OOD
Registering a company in Bulgaria is a crucial starting point for conducting business in Bulgaria, purchasing land in Bulgaria, and even as a basis for acquiring residency in Bulgaria. Registering a company does not require you to be a Bulgarian citizen or residence. It is also not necessary to be present in person in Bulgaria to register a company. A local attorney can help you register your company with a power of attorney document.
Bulgaria has experienced a surge in foreigners registering companies in the last years; some of the main reasons for that are that Bulgarian corporate taxes are among the lowest in Europe; with 10% corporate tax on profits, 5% on dividend profits, and 0% when trading within the European Union. This is one of the reasons Bulgaria is among the best European countries to establish your new business or move your current business to.
This article will disclose the different types of legal entities that exist in Bulgaria and the differences between them, the requirements required in each case for registering, and the basic terminology, among other issues.
Establishing a business and registering as the correct type of legal entity requires a professional approach and the close-handling of a highly-trusted legal experts. Our law office is here to assist you and lead you throughout the entire process. Contact us and start your own Bulgarian company.
Legal business entity in Bulgaria options
Every business has its unique requirements, and choosing the right option for your business will determine the way your business will operate. Moreover, some legal actions are only possible through specific entities, such as buying land or being entitled to residency due to being a shareholder of a company (for non-EU citizens).
- ET/sole owner- this is a simplified entity, wherein the owner has full responsibility for its debts and obligations, suitable especially for small ventures. This option has some varieties.
- Freelance – registration for personalized individual, relevant for self-employed individuals in specific fields.
- EOOD/single personal limited liability company– a limited liability entity owned by a single person.
- OOD/private limited Liability Company– a limited liability entity owned by two partners or more.
- Branch Company in Bulgaria– an entity registered in Bulgaria as a branch of a foreign legal entity registered abroad.
- AD/public limited company– a legal entity whose members own shared capital. A joint-stock company.
This article focuses especially on the EOOD/OOD limited liability company, which is widely utilized by financiers due to the minimal funds required and for others legal actions non-EU nationals can obtain through these legal entities.
EOODOOD COMPANIES – limited liability companies
Besides the apparent economic and legal reasons to register a company in Bulgaria, regulating a person’s business activities, paying taxes, and other conduct with Bulgarian authorities, there are other benefits. Registering a legal entity in Bulgaria, in this case, OOD/EOOD, also allows an individual that owns such a company other legal rights and actions.
For a non-EU national, buying a property in Bulgaria with the land included is impossible; the only property legally available is apartments or buildings with no adjacent land connected. However, a non-EU national can be a sole-owner of an EOOD (two or more partners in OOD company) company and therefore purchase a regulated plot or a house with land through it .
The company can be registered for this purpose alone and stay financially inactive afterward. Hence, no additional costs besides the initial expenses of registering EOOD/OOD companies are involved.
(Buying forests or agricultural lands is exempt.Only Bulgarian citizens can purchase agricultural land and forests. For more information on obtaining Bulgarian citizenship, read this article)
Another opportunity that unveils when registering EOOD/OOD Company in Bulgaria for non-EU nationals is the option of being granted the right to apply for Bulgarian residency. However, in this case, the company should be financially functioning, and hire at least 10 Bulgarian citizens as permanent employees.
Registering OOD/EOOD COMPANIES- requirements and procedures.
OOD/EOOD are limited liability companies. The differences between the two are the number of shareholders. EOOD is a limited liability company with a single shareholder, the owner, while OOD has at least two. Other than that, the structure, the requirements, and so on, are the same. Investors and founders of OOD/EOOD companies can be Bulgarian, foreign nationals and/or legal entities such as foreign companies.
The shares in OOD/EOOD limited liability companies are not tradeable financial instruments. A notarized agreement can transfer the company shares to a third-party after a shareholder’s meeting resolution. Moving shares between the company’s shareholders do not require such a procedure.
- Before the registration of OOD/EOOD Company, the following details and conditions are required:
- Personal details of the shareholder/s and managers. Personal identification number, Passport / ID depends on the nationality of the applicant.
- The desired name for the company. There is a designated website in which the availability of a company’s name could be checked. The legal relevant company name is in Bulgarian (Cyrillic). At least three names should be presented if the registry authority will find similarities in a suggested name.
- Description of the company’s intended activities.
- The Bulgarian address of the future company
- Bulgarian bank account. It is getting more and more difficult to find banks that will allow opening a bank account for any individual not present in person in the bank, even to a proxy with the proper power of attorney. Bulgarian banks require clients to have registered Bulgarian residences.
- Minimum founding capital of 2BGN (1 EURO)
As discussed in this article, opening a Bulgarian OOD/EOOD limited liability company is crucial for those who like to set up their life in Bulgaria. Buying a house with land, running a legitimate business, and even purchasing a boat or a car can be all made possible by registering such accompany. However, there are still some obstacles regarding the opening of a bank account and the residency issue.
Our law firm will assist you throughout the entire process, our staff of skilled lawyers is familiar with all the relevant rules and regulations. They would be happy to help with tailor-made solutions in all related subjects.