{"id":1861,"date":"2022-08-31T13:35:26","date_gmt":"2022-08-31T11:35:26","guid":{"rendered":"https:\/\/mikinski.bg\/how-to-establish-a-company-in-bulgaria\/"},"modified":"2024-08-05T08:44:22","modified_gmt":"2024-08-05T06:44:22","slug":"how-to-establish-a-company-in-bulgaria","status":"publish","type":"post","link":"https:\/\/mikinski.bg\/en\/how-to-establish-a-company-in-bulgaria\/","title":{"rendered":"How to establish a company in Bulgaria"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1861\" class=\"elementor elementor-1861 elementor-1844\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-5eeac7a5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"5eeac7a5\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-78326f24\" data-id=\"78326f24\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f498e82 elementor-widget elementor-widget-text-editor\" data-id=\"f498e82\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\tStarting a business in a foreign country brings with it numerous challenges and the need for serious research into local legislation and long-established business practices. In this regard, the Republic of Bulgaria is no exception.\r\n\r\nNo matter how easy the process of establishing a company and starting a business in Bulgaria may seem, there are a number of peculiarities that can create significant difficulties, as well as create an unnecessary delay in achieving the desired result. All this can be overcome by choosing a suitable business consultant to guide the client through the entire process to its successful completion.\r\n\r\nIn order to create more clarity, the process of establishing a commercial company will be divided into several stages.\r\n<h2><strong>\u00a0<\/strong>1. <strong>Preliminary stage<\/strong><\/h2>\r\nThis is the stage in which the right form of doing business in Bulgaria is analyzed and chosen. Whether the activity will be developed through a limited liability company, through a joint-stock company, in the form of a branch of a foreign trader or in another form suitable for the respective client. The assessment is carried out on the basis of the future business plan of each individual client, taking into account the advantages and disadvantages of the respective types of legal formations through which Bulgarian legislation allows commercial activity to be carried out.\r\n\r\nThis is also the stage in which a commercial bank servicing the future company is selected and preliminary research is done on the terms and conditions, in which the bank chosen by the client will open a special accumulation bank account, to which the capital of the future company will be deposited.\r\n<ol start=\"2\">\r\n \t<li>\r\n<h2><strong> Preparatory stage <\/strong><\/h2>\r\n<\/li>\r\n<\/ol>\r\nThis is the stage at which the necessary documents should be prepared in order to proceed with the establishment of the new legal entity. For this purpose it should be chosen:\r\n<ul>\r\n \t<li><strong>a suitable company name of the new company, <\/strong>that sounds equally good both in Bulgarian and in the commercial translation chosen by the client,<\/li>\r\n \t<li><strong>administrative address <\/strong>where the company will be registered and receive its future correspondence.<\/li>\r\n \t<li><strong>subject of activity <\/strong>of the future company, describing the specific business that will be implemented on the territory of the Republic of Bulgaria,<\/li>\r\n \t<li><strong>amount of the company&#8217;s capital<\/strong>, which should be determined in such way as to cover the initial costs before the company starts generating income. The minimum required by law is BGN 2.;<\/li>\r\n \t<li><strong>ownership <\/strong>or in other words who will own the shares of the capital of the future company and how they will be distributed among the future shareholders,<\/li>\r\n \t<li><strong>VAT registration <\/strong>\u2013 it should be analyzed whether the future company is subject to mandatory VAT registration or wishes to be voluntarily registered at the same time as its establishment.<\/li>\r\n<\/ul>\r\n<ol start=\"3\">\r\n \t<li>\r\n<h2><strong> Main stage<\/strong><\/h2>\r\n<\/li>\r\n<\/ol>\r\nThis is the stage where all prepared documents are presented to the attention of the investor for approval and signature. After they are signed, notarized and, if necessary, apostilled, translated and legalized, they are submitted to the relevant institutions in the Republic of Bulgaria. Upon official approval of the submitted documents, the new company receives a unique identification code (UIC), which serves as its unique identifier in its relationships with third-party natural persons and\/or legal entities.\r\n<ol start=\"4\">\r\n \t<li>\r\n<h2><strong> Obligations<\/strong><\/h2>\r\n<\/li>\r\n<\/ol>\r\n<h4><strong>4.1. <u>Arising from Accounting Act<\/u><\/strong><\/h4>\r\nEvery company that carries out activities on the territory of the Republic of Bulgaria should keep accounts in compliance with the principles and rules provided for in the Accounting Act and the other relevant normative and secondary normative acts. Under certain circumstances, the new company may be subject to a mandatory audit, which will result in an obligation to apply specific audit practices, legally defined in the Independent Financial Audit Act.\r\n<h4><strong>4.2. <u>Arising from LC<\/u> <\/strong><\/h4>\r\nIn the event that the new company wishes to appoint staff, the principles and rules of the Labor Code and the other relevant normative and secondary normative acts. The company should bring its activities in line with the requirements of the Labor Code and other relevant acts by creating internal rules and policy for the organization of the work process and the work remuneration.\r\n\r\nThe specific requirements of the Foreigners Act are applied, provided that a person who is a citizen of a third country outside the European Union and the European Economic Area should be appointed in an employment relationship to the new company.\r\n<h4><strong>4.3. <u>Arising from PDPA<\/u> <\/strong><\/h4>\r\n<ul>\r\n \t<li><strong>Bringing into compliance <\/strong><\/li>\r\n<\/ul>\r\nThe new company should bring its activities into compliance with the requirements of the PDPA and the GDPR, by preparing and adopting the necessary internal acts for this purpose.\r\n<ul>\r\n \t<li><strong>Preparation a privacy policy for a site <\/strong><\/li>\r\n<\/ul>\r\nThe new company should prepare and announce on its corporate website a Privacy Policy and a Cookie Policy, in case the functionalities of the website require it.\r\n<ul>\r\n \t<li><strong>Selection of a Data Protection Officer<\/strong><\/li>\r\n<\/ul>\r\nThe new company should select and designate a person to perform the functions of the Data Protection Officer, in case the activities of the new company require it. The person can be both internal to the company (appointed on an employment contract) and an external consultant &#8211; a natural person or a consultant appointed by a legal entity.\r\n<h4><strong>4.4. <u>Arising from CPA<\/u> \u2013 for online store<\/strong><\/h4>\r\n<ul>\r\n \t<li><strong>Preparation of General Terms for an online store<\/strong><\/li>\r\n<\/ul>\r\nThe new company should bring its activities in line with the requirements of the Consumer Protection Act by preparing and uploading to its online platform general terms and conditions that are in line with the\u00a0 activities of the company, on one hand, and with with the provided normative rules, on other another.\r\n<h4><strong>\u00a0<\/strong><strong>4.5.<\/strong> <strong><u>Arising from the HA, European Acts, CPA <\/u><\/strong><strong>\u2013 for physical store<\/strong><\/h4>\r\n<ul>\r\n \t<li><strong>Notifying the RHI<\/strong><\/li>\r\n<\/ul>\r\nIn the Health Act is provided that when a physical store is opened, it must be entered in a public register maintained by the Regional Health Inspections (RHI). For this purpose, a notification should be submitted to the RHI for the opening of an object with a public purpose, as a result of which the health authorities carry out an inspection for compliance with the health requirements in the object.\r\n<ul>\r\n \t<li><strong>Registration of working hours of a commercial establishment<\/strong><\/li>\r\n<\/ul>\r\nPursuant to the Ordinance on the terms and conditions for carrying out commercial activities on the territory of the \u201eStolichna\u201c Municipality, the commercial establishments must register their working hours with in the regional administration.\r\n<ul>\r\n \t<li><strong>Labeling of products<\/strong><\/li>\r\n<\/ul>\r\nA label on bulgarian language should be placed on the products offered in the store. The label must contain information about the manufacturer and the importer when the goods are imported. In addition, the label must contain the type of product and its essential characteristics, expiration date and storage conditions. The trader has no right to remove or change the label placed by the manufacturer or importer, if this action will mislead the consumer.\r\n\r\nDepending on the type of products being sold, different, specific requirements are also applicable.\r\n<ul>\r\n \t<li><strong>Discounts on product prices<\/strong><\/li>\r\n<\/ul>\r\nThe requirements for the announcement of the price reductions are provided in the Consumer Protection Act (CPA). In the announcement of price reduction should be indicated:\r\n<ul>\r\n \t<li>the products or the groups of products for which the price reduction is valid;<\/li>\r\n \t<li>the conditions under which the price reduction takes place;<\/li>\r\n \t<li>the period during which the products will be sold at reduced prices.<\/li>\r\n<\/ul>\r\nThe price reduction announcement is made in the manner provided by law. Each notice of a reduction must contain the previous price that the trader applied during a certain period before the date from which the price reduction takes effect. The previous price is the lowest price of the goods that the merchant applied during a period not shorter than 30 days before the date of the price reduction in the same commercial facility.\r\n<h4><strong>\u00a0<\/strong><strong>4.6. <u>Arising from CPA<\/u><\/strong><\/h4>\r\n<ul>\r\n \t<li><strong>Prohibition of unfair competition<\/strong><\/li>\r\n<\/ul>\r\nIn the Protection Competition Act is provided a prohibition on the implementation of unfair competition, aimed at attracting customers.\r\n\r\nThe law prohibits the offering or giving of supplements to the products sold free of charge or for the apparent price of another product. This rule does not apply when advertising items of insignificant value are offered and with a clear indication of the advertising company, as well as when items or services are provided that, according to commercial practice are an accessory to the product being sold.\r\n\r\nThe Competition Protection Act also introduces a ban on making a sale when, together with it something is offered or promised, the receipt of which depends on:\r\n<ul>\r\n \t<li>solving tasks, puzzles, questions, riddles;<\/li>\r\n \t<li>collecting a series of coupons and similar;<\/li>\r\n \t<li>playing games with monetary or material prizes, the value of which significantly exceeds the price of the goods or services sold.<\/li>\r\n<\/ul>\r\nIn addition to the above, it is prohibited to sell goods in significant quantities for an extended period of time at prices lower than the costs of production and sale of the products, with the aim of unfairly attracting customers.\r\n<h4><strong>\u00a0<\/strong><strong>4.7. <u>Arising from\u00a0 MMLA<\/u><\/strong><\/h4>\r\n<ul>\r\n \t<li><strong>Announcement of Beneficial Owner <\/strong><\/li>\r\n<\/ul>\r\nThe categories of legal entities that should declare their actual owner are the following:\r\n<ul>\r\n \t<li>legal entities whose owners are foreign legal entities. To this category we should also add legal entities that are not entirely foreign-owned. In order for legal entities to be obliged to declare a beneficial owner, it is sufficient that one of the partners in the company, who owns a share of at least 25% of the capital, is a foreign legal entity;<\/li>\r\n \t<li>legal entities whose direct owner is a Bulgarian legal entity, but which is owned (directly or through a chain of other companies) by a foreign legal;<\/li>\r\n \t<li>joint stock companies that are not sole owned. To this category of obligated persons we should also include joint stock companies that are sole owned, but their sole owner is a foreign legal entity (directly or through a chain of other companies).<\/li>\r\n<\/ul>\r\n<strong>\u00a0<\/strong>The law defines as &#8220;beneficial owner&#8221; any natural person who directly or indirectly (through another legal entity or legal entities) owns at least 25% of the capital of the Bulgarian legal entity.\r\n\r\n<strong>\u00a0<\/strong>The announcement of the actual owner is made with a notarized declaration. If the declaration is certified abroad, it should be certified with an apostille and then translated and legalized. The declaration also includes data on the legal entities through which control is exercised over the legal entities established in Bulgaria. The current status of each legal entity described in the declaration is verified. The certificate of good standing must be certified with an apostille and then translated and legalized in Bulgaria. The declaration is submitted to the Commercial register and register of legal entities with non-profit purpose (CRRLENP) through an application form.\r\n<ul>\r\n \t<li><strong>Announcement of Contact Person <\/strong><\/li>\r\n<\/ul>\r\nAll legal entities established in Bulgaria, with owners who are foreign legal entities, are required to declare a contact person with the State Agency for National Security (SANS) for the purposes of the Measures against Money Laundering Act. This is relevant if the new company does not have a representative (appointed manager) who will permanently reside in the Republic of Bulgaria.\r\n<ul>\r\n \t<li><strong>Preparation of Risk Assessment and Internal Rules <\/strong><\/li>\r\n<\/ul>\r\nAll legal entities established in Bulgaria, which are included in the list of obliged entities under Art.4 of the MMLA, are obliged to identify, understand and assess the risks of money laundering and terrorist financing, by preparing and adopting their own risk assessment , taking into account relevant risk factors, including those relating to customers, countries or geographical areas, products and services offered, operations and transactions carried out or delivery mechanisms.\r\n\r\nObliged persons according to Art. 4 of the MMLA are also obliged to prepare and adopt Internal rules for control and prevention of money laundering and the financing of terrorism, which should be effectively applied in relation to their branches and subsidiary companies abroad.\r\n<ol start=\"5\">\r\n \t<li>\r\n<h2><strong> Building a brand<\/strong><\/h2>\r\n<\/li>\r\n<\/ol>\r\nIt is very important for consumers and business partners to know that a company exists, but it is even more important that they remember and recognize it afterwards. This effect is achieved by building a strong and recognizable brand.\r\n\r\nIn addition to building the company&#8217;s brand, including its reputation, its protection is no less important. For example, slogans, labels, packaging, graphic symbols, company names, company signs, domains, etc. identifiers with which the products of a given brand, and itself, are distinguished from others on the market, can be protected as trademarks, which are also the most popular way to protect business identifiers.\r\n\r\nMore about the essence of the brand and the protection of trademarks you can learn here <strong><a href=\"\/en\/trademark-registration\/\">here<\/a>.<\/strong>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-56fab83 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"56fab83\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-a375593\" data-id=\"a375593\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-900994c elementor-widget elementor-widget-author-box\" data-id=\"900994c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"author-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-author-box\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/mikinski.bg\/en\/about-us\/nina-stoeva\/\" class=\"elementor-author-box__avatar\">\n\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/mikinski.bg\/wp-content\/uploads\/2024\/06\/\u041d\u0438\u043d\u0430-\u0421\u0442\u043e\u0435\u0432\u0430-300x300.jpg\" alt=\"Picture of Nina Stoeva\" loading=\"lazy\">\n\t\t\t\t<\/a>\n\t\t\t\n\t\t\t<div class=\"elementor-author-box__text\">\n\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/mikinski.bg\/en\/about-us\/nina-stoeva\/\">\n\t\t\t\t\t\t<h4 class=\"elementor-author-box__name\">\n\t\t\t\t\t\t\tNina Stoeva\t\t\t\t\t\t<\/h4>\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-author-box__bio\">\n\t\t\t\t\t\t<p>Managing partner<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Starting a business in a foreign country brings with it numerous challenges and the need for serious research into local legislation and long-established business practices. In this regard, the Republic of Bulgaria is no exception. No matter how easy the process of establishing a company and starting a business in Bulgaria may seem, there are [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[29],"tags":[76],"class_list":["post-1861","post","type-post","status-publish","format-standard","hentry","category-corporate-law","tag-before-updates-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to establish a company in Bulgaria | Mikinski &amp; Partners<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mikinski.bg\/how-to-establish-a-company-in-bulgaria\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to establish a company in Bulgaria | Mikinski &amp; Partners\" \/>\n<meta property=\"og:description\" content=\"Starting a business in a foreign country brings with it numerous challenges and the need for serious research into local legislation and long-established business practices. 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