Holding companies in Bulgaria in 2024
What is a Bulgarian Holding Company?
The Commercial Code of Bulgaria authorises and governs the establishment of a Bulgarian Holding Company. This structure is usually registered to collect dividends from participation in ownership of other companies or through managing them. It is not legally required for a holding in Bulgaria to carry out its own trading or other commercial activities.
Furthermore, these companies must also fulfil the requirement of investing at least 25% of its capital stock directly in its subsidiary companies.
Types of Holding Companies in Bulgaria
Healy Consultants Group will assist our Clients to incorporate their target corporate structure along with a corporate bank setup in Bulgaria.
A Bulgarian holding company can be established in the form of either of the 3 entities given below:
| Features | Joint Stock Company | Partnership Limited by Shares | Limited Liability Company |
|---|---|---|---|
| Also known as | EAD | LP | OOD |
| Best uses | Raise investment pool from public | Professional services | All products and services |
| Minimum number of shareholders | 1 | 2 | 1 |
| Minimum share capital (in €) | 25,000 | 2 | 1 |
Benefits of setting-up a Bulgarian Holding Company:
- Suitable for foreign investors who want to engage in buying, managing and selling of commercial bonds and patents in Bulgaria;
- Companies are entitled to enjoy the low-cost business environment in Bulgaria due to i) low rental costs; and ii) an average salary of €580 per month payable to the employees;
- Foreign entrepreneurs have an easy access to a skilled labour force in Bulgaria since 53.4% of the working population of the country has a medium education level. Further, the country has an adult literacy rate of 98.4%;
- The corporate tax for holding companies in Bulgaria if they hire people with disabilities or unemployed people. Further, all those companies that incorporate in Bulgarian municipalities with high rates of unemployment are fully exempted from paying corporate taxes;
- They are entitled to EU funding opportunities. They can also benefit from Bulgaria’s membership in WTO as well as enjoy the benefit of Bulgaria’s preferential trading terms with the EFTA countries;
- Investors are entitled to buying and managing shares of foreign legal entities;
- A Bulgarian holding company is allowed to finance the companies that is managed by it.
Taxation benefits:
- Bulgarian companies enjoy a flat corporate tax rate of 10% on their worldwide income, one of the lowest in EU;
- Exemption from taxation of dividends for dividends paid by a Bulgarian company to an EEA resident company;
- Dividends received by a Bulgarian holding company are tax exempt;
- They have access to the 64 tax treaty networks signed by Bulgaria with other nations for the purpose of avoidance of double taxation;
- A withholding tax of 5% is levied on annual distributions to shareholders.
Other considerations:
- A holding company can extend loans to only those companies in which it either participates directly or controls;
- The amount of loan that the subsidiary company can borrow from a holding company cannot exceed ten times the capital stock of the holding company;
- Subsidiary companies and enterprises can make deposits in a holding company up to three times the value of the capital stock.
Conclusion
Healy Consultants Group is the best in the world at setting up holding companies in Bulgaria and every other country on the planet. Our experts help our Clients in restructuring their Group with their in-depth knowledge of global holding company regimes and “think outside the box” approach.
