By Hana Klossova. 11th September 2014
In 2007, Bulgaria joined the European Union. It immediately started working to make its business climate attractive to foreign corporations. They instituted a flat ten percent corporate tax. They have signed taxation treaties with a number of industrialized nations around the world. This means international companies are able to avoid double taxation. A foreign company would only have to pay taxes in one country. In Bulgaria, tax rates are often significantly less than those in other industrialized countries.
Location
Bulgaria is on the main route between Asia and Europe. It is located in the middle of the Balkan Peninsula. Four Pan-European transport corridors go through Bulgaria. Three of these corridors connect in the capital city of Sofia.
Bulgaria Company Formation Agents
Company formation Bulgaria can be easily done with the services of a company formation agent. They will know how Bulgarian laws will impact a foreign business. A formation agent knows how to handle the procedures to make forming a company in Bulgaria an easy process.
Starting A Company In Bulgaria
When a foreign company wants to start a business in Bulgaria, they need to register it. To register a company in Bulgaria standard application forms are used. A foreign company will have to be registered with the National Statistical Institute to obtain a company identification number. They will also have to register with the National Insurance Institute, local tax authority and more. The company must provide copies of identity documents for all owners. Legalized copies of corporate documents of the owners is acceptable. Share capital needs to be put in a special bank account designated for capital-raising. Articles of association need to be created and signed by anyone who is a company shareholder. There also needs to be a designated representative to meet with authorities when necessary. The representative does not have to be a citizen of Bulgaria. A foreign company also has to have a local bank account and address.
Equal Terms
A foreign entity conducts business on equal terms with Bulgarian citizens. The taxation, rules, regulations are the same for a foreign business as any company owned by a Bulgarian citizen. The laws in Bulgaria do not require foreign entities to join any business organizations, such as chamber of traders and more. Membership to any such organization is up to the foreign company.
No Employees Requirements
There are some countries that require foreign companies to employ a specific number of people in order to do business there. This is not the case with Bulgaria. This country has no laws requiring a specific number of employees work for a foreign company.
Skill Level
Bulgaria is a place where foreign companies are able to hire and train highly educated and skilled workforce. This is especially true when doing business in Sofia, the country’s capital. The cost of labor is much less than other industrialized nations. There is a requirement for national insurance contributions for employees and employers. These contributions are relatively low. Bulgarians are recognized for their advanced IT skills. English is often spoken all over the country.
Regulatory Environment
Companies who do business in Bulgaria have the freedom to set up the company and transfer capital. They can transfer capital to a foreign investor who has a desire to settle in the Bulgaria and start an industrial or commercial enterprise. There is usually no prior authorization required. Authorization will be required for specific businesses in a highly-regulated industry such as insurance, banking, transportation and more. A single person can own and manage a foreign company in Bulgaria. This one person will be able to conduct business and sign all necessary paperwork.
Real Estate
A major expense in doing business in a foreign country is office space, storage requirements and more. The costs associated with renting or purchasing real estate in Bulgaria are some of the lowest in Europe. It is also possible for a foreign citizen to register a company in Bulgaria and then buy land in the name of the company.
The cost of utilities in Bulgaria is also extremely reasonable. The price for electricity for industrial companies in Bulgaria is approximately 69 percent of the average in Europe.