The sole trader (sole proprietorship) under the Bulgarian law is a type of trader who is a private individual. Only a natural person can register as a sole trader who is legally allowed to perform commercial activities. Unlike the limited liability company and the joint stock company, the sole trader does not have a separate legal personality.
What is the level of liability of a Bulgarian sole trader?
The sole trader is liable for his/her debts with ALL of his/her personal property and assets. This makes the sole trader registration in most cases highly unwanted due to the fact the sole trader’s liability is unlimited.
Can a foreign individual register as a sole trader in Bulgaria?
Yes, a foreign private person can register himself/herself as a sole trader in Bulgaria, but only after he/she obtains a permanent residence status in Bulgaria.
What type of commercial activities is the sole trader suitable for?
Usually, micro-businesses conducted by a single person resort to the sole trader registration. Some of these could be hairdressing and cosmetic services, automobile repair services etc. Sole trader registration could be useful, but necessarily, in certain cases, when the annual turnover does not exceed EUR 25k. However, the unlimited liability makes the sole trader registration largely unwanted form for doing business in Bulgaria.
What are the required documents for sole trader registration in Bulgaria?
To register as a sole trader one must prepare and file the following document with the Bulgarian Registry Agency:
- registration application as a sole trader
- notarized sample of the sole trader’s signature
- written declaration that he/she is not deprived of the right to engage in business
- state fee in the amount of EUR 8
- power of attorney for us to prepare and file the above documents
Due to the fact that the corporate income tax in Bulgaria is 10%, it makes the sole trader registration pointless in most cases. We highly advise our clients to opt for limited liability company registration in Bulgaria or single member limited liability company.