A foreign company may choose to open a company in Bulgaria whose shares will be kept in totality or partially by it. This type of company is called subsidiary. A subsidiary has its own capital and management bodies and it’s considered a separated legal entity.
There are two popular forms a subsidiary may take in Bulgaria
: as a limited liability company
or as a joint stock company.
Our company formation agents in Bulgaria
can help foreigners establish their subsidiaries in this country.
How is an LLC formed in Bulgaria in 2021?
A limited liability company is formed by at least one shareholder with a symbolic minimum share capital of 1 Euro, while the joint stock company must be formed by at least two shareholders, with a minimum share capital of at least 25,000 Euros. There is no need for the subsidiaries opened in Bulgaria to have resident shareholders or managers.
Continuing with the formalities for establishing a subsidiary in Bulgaria in 2021, we mention that the Memorandum and the Articles of Association are requested by the registration authorities. The decision of forming a subsidiary in Bulgaria must be comprised of a declaration or statement issued by the parent company. The Registry Agency of the Ministry of Justice, alongside the Commercial Register in Bulgaria receive the documents for subsidiaries in Bulgaria. Our company formation specialists in Bulgaria closely collaborate with the institutions in charge of company incorporation. If you would like to know more about how the business is done in 2021 in Bulgaria, feel free to send your inquiries to our team of specialists.
Support for certain businesses in Bulgaria
The Encouragement of Investment Act provides support for certain types of business if the following conditions are met: the investment implementation doesn’t exceed three years or the investments are made for the improvement of the creation of products and services and provide new jobs. A subsidiary registered in Bulgaria has the same tax regime as a local company. The VAT must be paid monthly if the annual turnover exceeds 50,000 BGN.
The National Revenue Agency must receive the accounts of the subsidiary annually. Double tax treaties
may be applied on capital gains or dividends, interests and royalties. Unlike a branch
, there is no obligation to submit the financial statements of the foreign company at the National Revenue Agency.
The obligations of a Bulgarian subsidiary
Before registration, the Bulgarian company must deposit the minimum share capital in a bank account, especially opened for the future financial operations. Below are a few steps to consider for establishing a subsidiary in Bulgaria:
- Subsidiaries established in Bulgaria must submit at the Commercial Registry an application containing the address of the registered office and details regarding the subsidiary’s representative.
- Along with the application, the foreign company must also provide the contract between the subsidiary and the parent company.
- The consent with a specimen of the signature of the subsidiary manager (notarized) and the decision of opening a subsidiary taken by it must be prepared.
- The last step before starting business in Bulgaria is registering for VAT, but only if there are predictions that in the future the annual turnover will exceed 50,000 BGN.
The process of registration of a subsidiary normally takes about eighteen days, but the process depends entirely on the correctness of the provided documents.
FAQ about subsidiaries in Bulgaria
1. Is it hard to establish a subsidiary in Bulgaria in 2021?
No, there are no harsh formalities for opening a subsidiary in Bulgaria in 2021. The process is straightforward especially if you decide on working with our company formation agents in Bulgaria you will benefit from complete services for subsidiary registration.
2. Who can open subsidiaries in Bulgaria?
International entrepreneurs interested in business in Bulgaria can easily establish subsidiaries in this country. Ask for our support for the incorporation process.
3. How do I open a subsidiary in Bulgaria?
You can choose the limited liability company
or the joint-stock company for your subsidiary in Bulgaria
. In any case, you should ask for the help and assistance of our specialists in Bulgaria.
4. Does a subsidiary in Bulgaria have a special tax regime?
No, subsidiaries are treated just like any other company in Bulgaria. The applicable tax regime for local businesses is also available for subsidiaries.
5. Is it hard to open a bank account for a subsidiary in Bulgaria?
No, you can simply open a corporate bank account in Bulgaria and deposit the minimum share capital solicited for your subsidiary. One of our agents can help you open a bank account in Bulgaria.
6. Is a subsidiary the proper choice for expanding the activities in Bulgaria?
Yes, a subsidiary is an optimal solution for those who want to develop their operations in this part of Europe. Bulgaria already hosts a large number of foreign companies that generate huge profits each year.
7. How fast can I incorporate a subsidiary in Bulgaria?
Subsidiaries in Bulgaria can be registered in a few days, if the authorities accept the submitted documents and if all the conditions are respected. Plus, you can be helped by one of our company formation agents in Bulgaria for a smooth process.
8. Do I need to register the subsidiary for taxation?
9. Is the subsidiary an independent legal entity?
Yes, subsidiaries are independent legal entities, apart from the parent company. The accounts are handled separately and the accounting report made no the parent company is not mandatory.
10. What is the corporate income tax for subsidiaries in Bulgaria?
The corporate income tax in Bulgaria is set at a 10% rate and it is imposed on the worldwide income of subsidiaries. All the details about taxation in Bulgaria can be discussed with one of our specialists.
Making investments in Bulgaria in 2021
is a great and appealing investment hub in the Eastern part of Europe and a destination that already hosts a large number of foreign branches and subsidiaries. The tax regime in Bulgaria is one of the most favorable among the EU countries and often the business advantage attentively measured by entrepreneurs from overseas. The skilled and multilingual workforce, the ease of doing business, the lack of complexities for starting a business, the economic stability, and the strategic geographic location represent only a few of Bulgaria’s main attributes and advantages. Many business opportunities are offered in sectors like manufacturing, tourism, textiles, chemical, extracting industry, agriculture, and more. Investors from abroad are also attracted by the real estate sector that continues to flourish at a fast pace. The following facts and figures highlight in large lines the economic direction of Bulgaria:
- Nearly USD billion the total FDI stock for Bulgaria in 2019.
- The 2020 Doing Business report ranks Bulgaria 61st out of 190 economies in the world.
- A large percentage of the FDIs in Bulgaria are directed to the real estate sector, followed by manufacturing.
- Germany, Austria, the Netherlands, and Italy are the main investors in Bulgaria.
For more details about opening a subsidiary in Bulgaria
you may contact
our company formation agents.