In Bulgaria, the branches’ registration is regulated by the Law on Promotion of Investments. Certain regulations that a branch must follow are also included in the Bulgarian Commercial Law.
Without being considered a legal entity, a branch opened in Bulgaria has certain advantages, for example it doesn’t require a minimum share capital at registration, doesn’t have a minimum number of members requested and the nationality of the representative doesn’t need to be Bulgarian.
A branch opened in Bulgaria must be registered in the Commercial Registry of the Registry Agency before starting any type of activity. The registration must be performed by the foreign company’s representative or by an appointed lawyer, vested with power of attorney.
After opening a bank account, certain documents must be prepared by the foreign parent company for registration. These documents must be elaborated in Bulgarian, if not it must be followed by an authorized Bulgarian translation.
First of all, the certificate of registration of the foreign company is necessary and also, the articles of incorporation or the memorandum of association, the decision of opening a branch, the decision of appointing the representative, the registered office address, the certificate of good stand regarding the foreign company’s activities, the previous year’s balance sheet.
The above documents must be legalized before being deposit at the Bulgarian Chamber of Commerce and Industry.
After receiving the registration number, the branch must apply for the VAT number at the Bulgarian National Revenue Agency.
The Bulgarian branch may begin its commercial activities after taking the above steps.
A branch must pay the same taxes as the local companies and must elaborate and deposit financial accounts every year. The VAT returns must be submitted every month.
The less attractive part of owning branches in Bulgaria is that the liability for their actions is owned by the parent company, the representatives are liable for the branch’s tax debts, the balance sheet of the parent company must be registered at the Bulgarian Ministry of Justice, it has the same fiscal obligation like the parent company or any Bulgarian company, any public act of the branch must receive firstly the authorization of the foreign company and the banks and the clients trust more the parent company and do business with it than with its branches.