Bulgaria company registration

Bulgaria company registration

DOING BUSINESS IN BULGARIA

Since 2003, Healy Consultants has assisted our Clients with starting business in Bulgaria. Our services include i) Bulgaria company formation services ii) government license registration iii) corporate bank account opening services in Bulgaria and abroad iv) employee recruitment; v) employee visa strategies and vi) office rental solutions in Bulgaria.

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and disadvantages

    Advantages of Bulgaria company registration

    Bulgaria business registration advantages and disadvantages

    1. A Bulgaria limited liability company can be incorporated within two weeks, with a minimum of one shareholder and one director, who can be of any nationality and place of residence. Conveniently, the minimum paid up share capital is only €1 and our Client will not need to travel to complete the Bulgaria business setup procedures;
    2. Bulgaria is a prime setup location for our Clients willing to run a manufacturing business in Europe and the Middle East, because:
      • Because of its EU membership and free trade agreements, Bulgaria enables manufacturing businesses to reach to i) 500 million duty-free EU market; ii) 80 million duty free Turkey market and iii) booming Middle Eastern markets;
      • Bulgarian labor costs are the lowest in Europe, according to Eurostat. Average hourly labor costs are indeed recorded at €4.1, against €28 for the European Union average. The monthly minimum wage is only €220;
      • Skilled workers are also available, with good qualifications in engineering, sciences and languages. According to the National Statistical Institute of Bulgaria, 20% of the total population have college degrees;
      • Tax holidays of up to 5 years are available to qualifying manufacturing projects under the Corporate Income Tax Act;
      • Electricity costs in Bulgaria are estimated to be 30% lower than the standard EU rates. Standard KwH for corporates is just €0,165 per hour;
      • Plovdiv (Bulgaria’s second largest city) is a great place to relocate a manufacturing business. This city boasts one of the largest manufacturing clusters in Eastern Europe. Bulgaria is a great place for companies selling products and services to the automobile industry. Large EU companies like i) Witte ii) Montupet and iii) others car parts suppliers have relocated their factories to Bulgaria. The only Chinese car manufacturer in the EU – Great Wall Motors – chose Bulgaria to setup their factory;
      • For these reasons and more listed below, Bulgaria is positively ranked 38th in the Doing business 2016 ranking of the World Bank.

    3. Registering a business in Bulgaria enables our Clients to legally minimize tax because:

    4. Bulgaria is the preferred investment location within the EU for Russian entrepreneurs because:

    5. Additional government incentives for investment projects in Bulgaria include:
      • R&D-oriented companies registered in Bulgarian industrial zones benefit from a 2-year tax holiday;
      • Foreign investments in Bulgaria have preferential access to EU structural funds, available only in Bulgaria and Romania;
      • Foreign entrepreneurs who create 50 jobs are automatically exempted from VAT for up to 2 years VAT under the new VAT Law;
      • Under the Renewable and Alternative Energy Sources Act, foreign investments in renewable energy are connected with priority to the electricity grid, otherwise a time-consuming process;
      • Foreigners investing more than €10 million in Bulgaria will qualify to become Class A investors and consequently obtain full 100% reimbursements of labor costs.

    Disadvantages of Bulgaria company registration

    1. Our Clients will make few domestic sales in Bulgaria because:
      • The Bulgarian domestic market is relatively small, with a declining population of 7.3 million people. Purchasing power in Bulgaria also continues to be the lowest in the European Union since the country became a member in 2007;
      • While Bulgarian summer resorts are preferred tourism location by Russians, the political tensions with this country resulted in a drop of Russian tourists to Bulgaria from 700,000 in 2014 to 160,000 in 2015, according to the Bulgaria National Statistics Institute;
      • The country suffers from high unemployment levels, recorded at an average 10% in 2015.

    2. Our Clients will face red tape and unpredictable bureaucratic practices in Bulgaria because:

    3. Bulgaria’s infrastructure and energy sector are not up to par with EU standards because:
      • Roads in Bulgaria are generally in moderate to poor condition, causing additional operational costs for logistics companies;
      • Railway infrastructure quality in Bulgaria is lower than other European States, according to the World Economic Forum;
      • Power outages, while quickly fixed, are not uncommon in suburban areas. According to the World Bank, it takes an average of 130 days for a new manufacturing business to get connected to the electricity network, the 5th longest period within the European Union;
      • Ukraine’s crisis is increasing the risks of a second gas crisis in Bulgaria. The 930km gas pipeline infrastructure project “South Stream” was suspended indefinitely by the Bulgarian Government in 2014;
      • The period 2013-2015 was marked by deadly floods, due to inadequate maintenance of water reservoirs.

  • Best uses for a Bulgarian company

    1. Bulgaria is a great place for the formation of a manufacturing company, thanks to availability of low cost workers and limited operational costs;
    2. Bulgaria is also a good place to trade with Russia. While the country’s membership to the European Union enables foreign investors to protect their assets and make sure they can repatriate their earnings, the geographical proximity to Russia will also allow them to target such market.

Company registration

  • Time to incorporate: Two weeks
  • Cost to set up: €8,360
  • Minimum capital: €1
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 10%
  • Corporate tax base: Worldwide
  • Shelf companies: Available
  • Main company type: OOD LLC

Contact us

For additional information on our company registration services in Bulgaria, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
Bulgarian chamber of commerce and industry Bulgaria financial supervision commission Bulgaria government