This article presents a brief overview of the key benefits from the formation and registration of company in Bulgaria. The following characteristics refer to a multiple owner limited liability company (OOD), single owner limited liability company (EOOD), single shareholder joint stock company (EAD) and multiple stockholder joint stock company (AD).
What is the corporate income tax rate in Bulgaria?
The corporate income tax is 10% flat rate for both legal and natural persons. It is the lowest for the entire EU. However, corporate income tax rate is 0% in areas with high unemployment.
What is the VAT rate in Bulgaria?
Supplies and services from and to VAT registered companies in EU are subject to 0% VAT. VAT rate for tourism is only 9%.
What is the withholding tax rate in Bulgaria?
EU tax residents enjoy 0% withholding tax on dividends and liquidation quotas. The non-EU tax residents pay only 5%.
Who is eligible to form and register company in Bulgaria?
The Bulgarian Commercial Act does not stipulate any limitation on the participation of foreign individuals in Bulgarian commercial companies. Up to 100% of the registered capital may be held by one or more foreign individuals or foreign legal entities.
What is the level of liability?
The shareholders are liable only up to the amount of the stakes they hold in the company’s capital.
What is the minimum capital requirement?
The minimum capital requirement is only BGN 2 or approximately EUR 1. In case the share capital is more than minimum amount then at least 70% of it shall be effectively contributed upon registration.
How is the capital contributed?
The company capital may be contributed by both cash payments and in-kind contributions. If there is an in-kind contribution, it will be subject to a specific procedure that includes a mandatory appraisal by three independent experts appointed by the Register Agency.
What is the governance structure of a Bulgarian limited liability company?
The management of the company is simple and flexible. It is governed by the general meeting of shareholders or the sole shareholder in the case of a solely owned limited liability company. Respectively, either one of these bodies shall appoint one or more company managers. The manager/s shall represent the company jointly or severally before third parties.
The manager must always be a private individual.
There are no specific requirements in terms of residence or nationality of the managers. There is also no limitation on the maximum term for which the manager shall be appointed.
Is there any limitation on the scope of activities?
The company may perform any activity, which is not prohibited by law. Some activities may require the company to obtain a license before starting to perform such specific activities.