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Company Formation Bulgaria



Invest in Bulgaria

Updated on Wednesday 22nd July 2020

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The foreign businessmen can choose to invest in Bulgaria because of  the many benefits this country has to offer.  There are numerous developed domains and here we mention the agriculture and the tourism sectors, the last one being well seen in the past decade due to its major changes.  If you wish to invest in Bulgaria you can solicit help and guidance from our company formation agents in Bulgaria.

Reasons to invest in Bulgaria

The geographic location of Bulgaria makes it an attractive country for all types of businesses. Being strategically located and having important exits at the Black Sea, Bulgaria also offers financial and macroeconomic stability. The taxation system is also an important aspect that you should take into consideration when deciding to invest in Bulgaria. For instance, the profit tax is only 10% and the tax on dividends paid to non-residents is 5%.
Bulgaria has the lowest taxation system in the European Union (EU), a strong reason why foreign investors choose to develop businesses here. As a reminder, you can set up a company in Bulgaria in 14 working days after you have prepared the necessary documents. The registration process of a company in Bulgaria is quite easy and our company incorporation representatives will guide you the entire course. Here is an infographic explaining the main reasons to invest in Bulgaria:
Main reasons to invest in Bulgaria1.png

Investing in real estate in Bulgaria

The real estate investments in Bulgaria increased visibly in 2016, due to all the benefits that the country offers and especially in the fiscal sector. In recent years, Bulgaria has become a popular destination, and businessmen from Russia, Hungary or Ukraine have chosen to invest in Bulgaria in the real estate sector. The low prices for properties and resorts at the Black Sea have become an attraction for many foreign investors, and here we mention an average price of EUR 500 per square meter. Regarding Sofia, the capital of Bulgaria, the values do differ a little bit, and the average price goes around EUR 800 per square meter for a residence in the city. The real estate in Bulgaria has a low level of taxation and property request is growing daily.  Take into consideration that all foreign investors who wish to register a company in the country and invest in Bulgaria can obtain guidance and legal assistance from our company formation agents in Bulgaria. You can also receive guidance on the registration process of a business in Bulgaria.
The Foreign Investments Agency in Bulgaria controls the main funds made by overseas businessmen, and here we mention the real estate investments, the intellectual property, securities and also equity investments. Due to a proper climate and suitable reforms, Bulgaria offers many opportunities for people who choose to have a business here, all of them being guaranteed by the Bulgarian legislation related to the foreign investments that stipulate fairness and objectivity. Our company formation agents in Bulgaria are able to offer important information and guidelines if you want to make investments in the country. You may also receive details about the company registration procedure in Bulgaria and legislation related to investing in Bulgaria.

Details about the Investment Law in Bulgaria

People interested in investing in Bulgaria are attracted to the financial and macroeconomic stability in the country and to the liberal investment management. According to the Investment Law in Bulgaria, an overseas investor may be a natural individual with a foreign permanent residence, a legal person without any registration in Bulgaria, or an enterprise without being a legal person. It is good to know that the foreign individuals have the right to start doing business in Bulgaria and to register the companies with the Bulgarian Chamber of Commerce and the Trade Register.
An investor may have the ownership title for certain assets and also limited proprietorship over a property in Bulgaria. The individual has also access to loans, securities, can obtain the intellectual property title and can be the sole owner of a company in the country. The Council of Ministers in Bulgaria is in charge of issuing the permits for individuals with ownership titles over certain properties or assets. You should know that you may not obtain a land proprietorship title.

Other important provisions

An investor in Bulgaria needs to register the company and pay the taxes if:
  • he/she generates incomes due to specific investments;
  • obtains earnings from the sale of the investment good;
  • has generated incomes through the made investments.
Every foreign investor has the possibility to make deposits in foreign currencies with the banks in Bulgaria and can purchase properties. Our experts in company formation in Bulgaria can provide you information in this matter and can also offer assistance if you want to register a company and invest in Bulgaria. It is good to know that the foreign investors have the same rules and regulations related to the registration procedure of an enterprise as the citizens in Bulgaria, without any specific requirements.

Is it hard to open a company in Bulgaria?

No, it is not complicated to open a company in Bulgaria, and that because the formalities have been simplified. This is a great advantage for foreigners interested in opening a business in Bulgaria, allowing investors to easily set up their activities. The limited liability company or the OOD in Bulgaria is the most popular business structure that can be set up with 1 Euro or 1 BGN. Here are a few aspects to know about how you can open an LLC as a foreign investor in Bulgaria:
  1. A local representative is needed for opening an LLC in Bulgaria, and one of our consultants can help.
  2. In terms of documents, the Articles of Association are the most important and comprise information about the owners, their nationality, the activities of the firm, and many more.
  3. Obtaining the licenses and permits is required for certain activities in Bulgaria.
  4. The registration for tax purposes and social contributions is required.
The Bulgarian Trade Register accepts the documents of the company, but before that, foreign investors need to make a name verification and reservation. The entire company registration process can be handled by one of our company formation agents in Bulgaria, so entrepreneurs can concentrate more on future investments and operations.

The tax regime in Bulgaria

Making an investment in a particular country starts with a solid plan and a verification of the business environment. The tax regime is important for all business decisions, and Bulgaria presents one of the most appealing tax systems in Europe. For instance, the 20% VAT rate is imposed only on companies with incomes of more than BGN 50,000 or around EUR 25,500. The corporate income tax is set at a 10% rate, another important advantage when it comes to making investments in Bulgaria. If you would like to know more about the taxes you need to pay for a company in Bulgaria, do not hesitate to give us a call or an email.

Startups in Bulgaria

Bulgaria presents a high potential for startups, considering the great business environment that attracts a large number of foreign investors on a yearly basis. The tech sector, for example, continues to prosper, already hosting numerous creative and smart startups that enjoy the support of foreign investors. Apps for statistical systems, or for specialized financial services, crowdfunding platforms, applications offering the possibility of exploring lots of digital content, or the ones that help farmers improve the irrigation process, here are a few of the startups opened in Bulgaria that enjoy quite a success on the market. The startup ecosystem is sustained by the Bulgarian government with different programs and encouragements meant to help young entrepreneurs enter the market. If you would like to know more about startups in Bulgaria, feel free to send us your inquiries.

The ultimate report about foreign direct investments in Bulgaria

If we talk about numbers, it is good to know that the total FDI (foreign direct investments) stock in 2018 stood around USD 49.2 billion which represented around 75.9% of the country's GDP (gross domestic product). The significant domains for FDI in Bulgaria are real estate, energy and tourism. The financial services sector also developed in the last years, and has been a major magnet to many overseas investors (around 16.7% rate of the total FDI was directed to this sector in 2018).
Bulgaria provides a great business climate for both local and foreign entrepreneurs interested in making investments in stable sectors like tourism, IT and communication, manufacturing, FMCG, and many more. There are many advantages provided by Bulgaria’s investment sector, and among these, the encouragements and incentives offered by the government. Foreigners can benefit from zero taxation for companies established in the free trade zones or can enjoy low taxes if they hire a number of local employees or invest in company equipment, just to name a few. More than that, providing simple registration formalities to foreign investors is definitely a plus and a great business advantage. The following facts and figures highlight the economy and the business direction of Bulgaria, and can help foreign investors make a decision in this sense:
  • around USD 49,000 million was the total FDI stock registered in Bulgaria in 2018;
  • entrepreneurs also became interested in greenfield investments, around 104 being registered in 2018;
  • the 2020 Doing Business report issued by the World Bank ranks Bulgaria 61st out of 190 economies in the world;
  • Bulgaria has one of the lowest corporate income taxes in Europe, set at a 10% rate;
  • foreign investors enjoy the same business rights just like the local entrepreneurs;
  • around 17% of the FDI in Bulgaria come from the Netherlands, a major business partner;
  • about 24% of the foreign direct investments in Bulgaria are absorbed by the real estate sector.
If you want to invest in Bulgaria, or if you need detailed information about how to open a business in this country, you can contact our company formation consultants in Bulgaria.

Meet us in Sofia

Call us now at +359 888 350 643 to set up an appointment with our specialists in company formation in Sofia, Bulgaria. Alternatively you can incorporate your company without traveling to Bulgaria.

As our client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Bulgaria.

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