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Set up OOD in Bulgaria
Updated on Thursday 02nd February 2023 Rate this article
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When deciding for a business in Bulgaria, the first thing to do is to choose the type of entity you want. A popular form in Bulgaria is the one called limited liability company (LLC) known as drujestvo s ogranichena otgovornost (OOD) in the Bulgarian language. Our team of company formation specialists in Bulgaria is at your disposal with assistance for opening a business, in compliance with the conditions imposed by the authorities in charge.
The steps of company formation of an LLC in Bulgaria in 2023
Once you decide to set up an LLC in Bulgaria in 2023, firstly you have to choose a name that has to be unique and you need to check if it is available and issue the proven document. The name must include the company’s legal form, which is OOD for a limited liability company.The name of the LLC must be in Bulgarian because this is the only official language. It also cannot contain words that are misleading or imply a connection with government or public bodies or words that are protected by trademarks or intellectual property rights.
The Bulgarian Commercial Register will review the proposed name and approve it or suggest changes if needed.Once the name is approved, it will be registered with the Bulgarian Commercial Register and can be used for the LLC. The official name is, however, different, from the brand/trade name. You can choose a different trade name for your Bulgarian limited company for advertising or marketing purposes.
You also need to comply with the other requirements issued by the Bulgarian Commercial Register. The managing body of the company needs an act of association as a result of the constituent meeting. The number of stakeholders is at least one, and the stakeholders of a Bulgarian limited company can be both individuals or legal entities.The company body of the Bulgarian OOD is made of a general meeting of stakeholders and a (minimum one) manager.
The LLC must have a director to represent the company in front of authorities, but it is not mandatory for him to be a Bulgarian resident. For an efficient communication, the OOD company should have a registered office in Bulgaria and a bank account. More about how to open an LLC in Bulgaria in 2023 can be solicited from our team of company formation agents in Bulgaria.
What is the minimum share capital for OOD in Bulgaria?
It is good to know that the authorized capital required for an LLC in Bulgaria is BGN 2 or EUR 1. The entrepreneur needs a bank document to state the deposit, attached to the file. The capital must be fully paid up at the time of LTD company registration in Bulgaria.
If Bulgaria is on your list for the following investments, we recommend the services of our accountants in Bulgaria. In addition to the important tasks related to bookkeeping, payroll, audits, and annual financial statements, those interested can also receive wealth management services. We also remind you that our specialists can collaborate with the relevant authorities in order to register for the payment of taxes.
The Bulstat number for OOD in Bulgaria
The Bulstat number represents the company's tax identification number that shows the company is registered as a taxpayer in Bulgaria. The National Social Security Institute in Bulgaria provides the Bulstat number for which the company must apply along with the papers for the Commercial Registry. Once the OOD is registered, the Bulgarian Commercial Register will assign a Bulstat number to the company consisting of a block of 9 digits.
Necessary documents for LLC registration in Bulgaria in 2023
The shareholder of a limited liability company in Bulgaria needs to put together the papers for the Registry Agency like:
- • the application form, the name certificate, and the signature specimen with the notary consent of the person who represents the company;
- • the owners of the limited liability company will have to prepare a set of copies of their identity documents;
- • in case of legal entities setting up the company, legalized copies of the corporate documents are required;
- • a set of copies of the owners’ identification documents (ID and passports).
Additionally, you also need proof of payment of the minimum capital issued by your bank and additional documents depending on the specifics of the company. The Registry Agency accepts paper and electronic applications. A court decision will acknowledge the main scope of the company and will include the articles of incorporation. The company receives a registration number and a taxation number. In the process of company registration in Bulgaria, the State Gazette publishes the Register entry, but it doesn’t mean that the set up of the company is complete. The tax registration is the next step in the company formation, and if you would like to know more about the rules imposed for business in 2023, pelase feel free to discuss to one of our specialists.
Are you ready to open a startup in Bulgaria? Our specialists can prepare the documents that form the basis of the establishment of a company and can also help you open a bank account. The whole process can take around 3 days, but everything depends on the prepared documents. That's why we will provide you with correct and fast paperwork so that you can focus on the investments you have planned. We invite you to discover our services and contact us for a personalized offer.
What are the taxes for LLCs in Bulgaria?
One should know that a Bulgarian limited liability company is subject to the Corporate Income Tax Law and the rate is 10%. The 20% VAT is not mandatory for companies with an income under BGN 50,000. Another thing that is not compulsory for an LLC is the independent audit of annual accounts. The LLC set up in Bulgaria is required to pay social security contributions. This can be done by filing an application at the Social Security Administration.
You should know there are quite a few tax benefits when opening an LTD in Bulgaria. The flat rate of 10% is one of the lowest corporate income tax rates in Europe, making it an attractive location for businesses. Also, certain goods and services are subject to a reduced VAT rate of 9% instead of the standard 20%. Bulgaria has a large number of Double Taxation Treaties with other countries, which can help to reduce or eliminate double taxation of the same income in two different countries. It is also a member of the European Union which gives access to the single market and EU funds.
The cost of an LTD company registration in Bulgaria is also relatively low compared to other European countries. This cost includes the registration fees, lawyers, and notaries, but is usually around 400 – 800 euros. Of course, this depends on the type of company you are starting and on other factors that may come up through this process.
Bulgaria is also a great country for startup companies because it has lower operating costs compared to other countries in Europe, a great workforce, and a growing technology sector. Some business opportunities in this sector include information and communication technologies, software development, e-commerce, and digital marketing. If you are interested in opening a startup in Bulgaria, you can discuss it with one of our specialized company formation agents.
The main attributes of LLCs in Bulgaria
Foreign entrepreneurs who choose to open an LLC in Bulgaria may benefit from a reputable business environment and a permissive investment legislation in most sectors of interest in this country. Among the attributes of OOD in Bulgaria, we mention the following:
- • such companies can deal and sign contracts in agreement with the applicable legislation;
- • an LLC in Bulgaria can issue invoices to local clients and can deal with trading activities;
- • each LLC in Bulgaria can solicit virtual office services instead of setting up a traditional office;
- • there is no need for frequent statutory audits, but the annual tax return must be submitted;
- • an LLC in Bulgaria can be established by at least one shareholder.
Bulgarian limited companies have a few advantages. Shareholders of an LTD in Bulgaria are only liable for the company's debts to the extent of the capital they have invested. This means that the shareholders' personal assets are generally protected from the company's creditors. An LTD is a flexible business structure that can adapt to different types of business activities and ownership structures.The process of setting up an LTD in Bulgaria is also quite simple, compared to other types of entities, and the minimum capital requirement is just 2 BGN or 1 EUR.
Company formation in Bulgaria depends on the type of business you plan to run. You might need some additional licenses and permits to legally operate. If you plan to hire employees, you also need to comply with Bulgarian labor laws and regulations. Employees need to be registered at the National Social Security Institute and to be provided the necessary benefits.
Virtual office services for LLC in Bulgaria
Investors from abroad who want to control the business in Bulgaria from the home country can benefit from complete virtual offices in Sofia or in other important cities in the country. Mail collection and forwarding, dedicated fax services, a local phone number for potential clients and collaborators, bank statements collection and a private local number are provided to foreign entrepreneurs as part of the virtual office packages. We remind that virtual office services in Bulgaria are cheaper compared to traditional offices for LLC establishments. Our advisors can offer in-depth information on this matter.
Can I set up a branch in Bulgaria?
Yes, branches are accepted in Bulgaria and there is no need for a minimum share capital or the obligation of appointing a Bulgarian representative. The OOD or the limited liability company is the proper business form for establishing a branch in Bulgaria, so the registration is quite simple. The Articles of Association translated into Bulgarian, the decision of opening a branch, the registered office address, a local bank account, and the Certificate of Good Standing are required for opening a branch in Bulgaria. Just like in the case of any kind of business structure, the branch must be registered with the Commercial Registry in Bulgaria. The registration for VAT is another important and required step for branches in Bulgaria.
Many investors from abroad know the advantages of branches, that also apply in Bulgaria. For instance, there is no need for a minimum share capital for establishing a branch in Bulgaria. Also, you can appoint one of our company formation agents in Bulgaria as representatives of your branch in this country. A power of attorney will be required, yet, all you need to know can be solicited from our specialists.
Short facts about the Commercial Registry in Bulgaria
The Commercial Registry in Bulgaria is the Trade Register that accepts the documents for company registration. Business owners must respect the incorporation steps and the rules of the Commercial Registry in Bulgaria. Also, the institution allows the verification of companies by using the name or the registration number. This is also an option to verify if the chosen name for your company is taken or not. Most of the services are not subject to fees, especially for company verification, still, other costs are imposed for business incorporation with the Bulgarian Trade Register.
It is important to note that the Trade Register in Bulgaria must be notified by the changes in your company, if a member is no longer part of the business or if you decide to modify the business structure. If you would like to know more details in this matter, please feel free to solicit our support and guidance.
Support for company changes
There are cases in which a company suffers modifications like changing the business address, the name of the firm, or increasing the capital. Also, the company owners might be interested in changing the business structure into another one, from a sole proprietorship to an OOD or from an OOD to a joint stock company. All the changes need to be made with the Bulgarian Trade Register in charge of companies in this country. Just like in the case of company formation in Bulgaria, foreign entrepreneurs can address their inquiries to our Bulgarian team of company formation consultants who can represent your firm with a power of attorney and who can handle all the modifications in the company. Also, in the case of insolvency or company liquidation in Bulgaria, you may ask for our support.
To change from a Bulgarian limited company to another type of company you need to follow these steps:
- - Hold a meeting with the other shareholders of the company, in order to approve the reorganization and adopt a new set of articles of association;
- - File the necessary documents with the Bulgarian Commercial Register;
- - Obtain the necessary approval and licenses, depending on the type of company the business is changing into;
- - Close the Bulgarian LTD.
You can also change the address of a Bulgarian limited company:
- - Update the company's internal records with the new address;
- - Notify the Bulgarian Commercial Register and fill the necesary documents
- - Notify the National Revenue Agency for tax purposes;
- - Notify other relevant national authorities such as the local municipality or the Chamber of Commerce and Industry.
Accounting services for your OOD in Bulgaria
Companies having financial operations in Bulgaria will need an accounting department, or better yet, they can benefit from the complete accounting services provided by our team of consultants specialized in accounting matters. First of all, our team can handle the registration for tax purposes for your firm and then can provide bookkeeping and payroll services for the company.
Cash flow report, tax planning, profit and loss accounts, monthly balance, tax filings, tax minimization methods, and financial records are a few of the accounting matters a company with operations in Bulgaria will deal with. It is good to know that the International Financial Reporting Standards – IFRS and the accounting laws in Bulgaria are the main regulations which are respected by companies with activities in this country. You are invited to talk to our team of experts and find out how you can benefit from our accounting services for your limited liability company or for any type of business structure you decide in Bulgaria.
Why choose us to form an OOD in Bulgaria in 2023?
Having a vast experience in the company formation in Bulgaria by helping foreign and local entrepreneurs is among the reasons why you should choose our company incorporation agents in Bulgaria in 2023. We can handle the registration of a company from scratch and we can help with the necessary formalities and documents for creating the limited liability company in Bulgaria. Having support with the authorities when starting a business in Bulgaria allows foreigners to concentrate more on the further operations and investments of the company.
Also, we provide additional accounting services if you choose to open a company in Bulgaria. While setting up a business in this country can be relatively easy and straightforward, managing the accounting and financial aspects can be more complex. It is recommended to consult with a professional firm of accountants to keep accurate financial records and follow Bulgaria’s regulations and tax reporting.
FAQ about OOD in Bulgaria
1. What is OOD?
OOD (drujestvo s ogranichena otgovornost) is the limited liability company, the proper business structure for most of the activities in Bulgaria. The registration is simple and you can discuss all the details with our company formation agents in Bulgaria.
2. What is the minimum share capital for OOD in Bulgaria?
BGN 2 or 1 EUR is the minimum share capital for a limited liability company in Bulgaria. This must be deposited in a local bank account which will serve for future financial activities of the company in Bulgaria.
3. What is the Bulstat number?
Each company must have a tax identification number in Bulgaria and that is known as the Bulstat number. The National Social Security Institute in Bulgaria issue this tax identification number for newly-formed companies in the country.
4. What documents do I need for OOD registration in Bulgaria?
The Articles of Association and the Memorandum of Association with information about the owners, the activities, and many more are part of the necessary documents for company registration in Bulgaria.
5. Do I need to register for taxation in Bulgaria?
Yes, the registration for taxation is required in Bulgaria. The VAT, the social contributions, the corporate income tax are important in this country. One of our company formation agents in Bulgaria can help.
6. How many people can establish an OOD in Bulgaria?
OODs in Bulgaria can be established by at least one shareholder. A representative of the company and a director are required.
7. Can I buy a ready-made company in Bulgaria?
Yes, shelf companies or ready-made companies are available in Bulgaria. These are registered as OODs.
8. How do I change the company structure in Bulgaria?
The Trade Register in Bulgaria is in charge of any company modification, as long as these are announced.
9. Do I need accounting services for OODs in Bulgaria?
Yes, OODs are subject to different accounting aspects that can be explained by one of our specialists. Externalized accounting services can be provided.
10. Can I solicit the support of a company formation specialist for representing my business?
Yes, one of our specialists can represent your company in Bulgaria.
Here are some facts and figures about the economy of Bulgaria:
- Bulgaria ranks 61st out of 190 economies in the world, according to the 2020 Doing Business report issued by the World Bank.
- The real estate sector received around 24% of the total FDI registered in 2018.
- The corporate income tax is set at a 10% rate, one of the lowest in Europe.
- Bulgaria had a GDP growth of 7.6% in 2021, one of the highest growth in EU.
- The unemployment rate in Bulgaria is relatively low, around 5.42 % in 2021.
Our company formation specialists in Bulgaria can help you with more information about how you can set up an LLC in Bulgaria, so please feel free to contact us at any time. In case you need other types of services, such as hair transplant services at a suitable cost, we recommend our partners - Hair-Transplant-Turkey.org.
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 a client of Sofia Offices, 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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