Company Registration in Bulgaria

Establishing a corporation in Bulgaria is an essential step for both international and local investors who want to take advantage of the country's business-friendly climate. This requirement applies to both foreign and local investors. The fact that Bulgaria is a member of the European Union provides direct access to the larger market of the EU. This is a significant advantage for business owners who want to grow their operations or extend their activities across borders. Taking into consideration the advantageous tax system, strategic position, and well-developed infrastructure, it is not difficult to see why an increasing number of investors are focusing their attention on this place.

Economic Outlook in Bulgaria

The country has shown stable economic growth in recent years. In 2023, the country’s GDP rose by 3.2% compared to the previous year. The economy is strongly export-oriented, which boosts international trade ties and helps attract foreign capital. Key export goods include metal products, chemicals, and agricultural produce. Bulgaria is drawing investment in areas like IT, manufacturing, and tourism. The government supports small and medium-sized businesses through tax incentives and financial subsidies, encouraging entrepreneurship across the country.

According to the World Bank’s latest report, Bulgaria ranks 50th out of 190 countries for ease of doing business. This suggests a relatively business-friendly environment, though there’s still room for improvement in some areas. The World Economic Forum places Bulgaria 60th in its global competitiveness index, reflecting a stable, if not yet top-tier, investment climate.

Corporate income tax in Bulgaria is among the lowest in the EU — just 10%. This low rate makes it attractive for investors looking to cut tax costs. Unemployment remains low at 4.5%, providing access to a skilled labor pool.

Bulgaria is also advancing in infrastructure and digital development. Recent investments in transport and digital connectivity are opening the door to new business opportunities and making it easier to launch or expand operations within the country.

Why Bulgaria Is a Smart Jurisdiction for Business Formation

Positioned in the southeastern corner of Europe, Bulgaria plays a quiet yet powerful role as a gateway connecting several economic zones. For businesses looking to establish operations with reach into Central Europe, the Balkans, and even parts of the Middle East, this location offers undeniable logistical and strategic value. Companies seeking cost-effective regional access often find Bulgaria to be a pragmatic choice.

As a full member of the European Union, Bulgaria gives firms direct entry into the EU’s economic framework. With access to over 450 million consumers under the same legal and trade standards, entrepreneurs can operate seamlessly across borders. Additionally, Bulgaria benefits from agreements beyond the EU that simplify trade with other global regions, making it a useful hub for importing and exporting goods and services.

The local currency, the Bulgarian lev, is tied to the euro via a currency board mechanism. This setup ensures financial predictability, as the lev remains stable against fluctuations in international markets. The result is reduced currency exposure for businesses and smoother financial planning. Coupled with the country's consistent macroeconomic policy—marked by low inflation and modest but steady growth—these factors contribute to a reliable economic climate.

Bulgaria’s legal framework is built on civil law principles and is aligned with EU legislation. Corporate registration is handled through a centralized public system, offering full visibility into company records and simplifying the formation process. Legal consistency and access to real-time data help build trust, particularly for foreign investors who rely on regulatory clarity when entering new markets.

Property rights and investor protections are clearly defined under Bulgarian law. Business owners benefit from enforceable contracts and mechanisms for resolving disputes if ownership or operational issues arise. The legal structure helps reduce uncertainty and encourages long-term investment by making it clear how assets and interests are secured.

Taxation is another strong incentive. Bulgaria applies a flat 10% corporate income tax, among the lowest rates in the EU. Dividends are taxed at 5%, making it attractive not only for founders and investors but also for reinvestment strategies. These tax conditions enhance Bulgaria’s position as a competitive location for both small businesses and international operations.

The government also promotes growth in targeted industries, including tech, research, and innovation. Startups in these sectors may access tax benefits, grants, or other financial support aimed at encouraging the development of intellectual property and scalable business models. These incentives are particularly appealing to young companies seeking support during early-stage growth.

Labor force quality is another notable asset. Bulgaria maintains a solid education system, producing professionals in engineering, finance, digital technology, and management. Universities across the country turn out multilingual graduates with strong technical and analytical backgrounds. This makes it easier for employers to recruit skilled personnel for both local and remote positions.

Wages in Bulgaria remain lower than in most Western European countries. In 2023, the average monthly salary was around €1,200. While compensation levels are modest, worker competence remains high, creating an efficient balance between cost and performance. This allows companies to allocate more resources to product development, international expansion, or infrastructure, without compromising on talent quality.

Bulgaria's Business Startup Niche and Regions

Where you put your Bulgarian flag affects more than your postal address. It will affect who you recruit, how quickly you expand, and whether your firm belongs or swims upstream. Before going to a new city, you should study its pulse to avoid tripping. When rhythm clicks? Everything flows better.

New ideas stick best where? Startups, IT labs, and restless builders still frequent Sofia and Plovdiv. They have co-working tables, productive gatherings, and individuals who will question your MVP before you spend six months on it. Your early-stage self will fit in here.

Most tourism occurs in Varna and Burgas, not simply during peak season. Unique experiences, boutiques, and specialist services are still needed in such cities. You need clever, local, and memorable, not megabudget. That thrives.

The steel-toed cornerstones of manufacturing and transportation are Plovdiv and Ruse. Not interested in press attention. They prioritize affordability, access, and flow, which is fantastic.

Choosing where to start goes beyond logistics. A personality match. Each city has a unique commercial lingo. Finding one that matches your tone simplifies things. Not easy, but friction lessens. That's a big advantage in this game.

Legal Entity Types for Starting a Business in Bulgaria: Strategic Considerations

When establishing a company in Bulgaria, choosing the right legal form is a critical decision that influences the operational framework, liability exposure, and access to capital. The country offers a variety of structures tailored to different business models, investment scales, and governance preferences.

Businesses aiming for significant investment and public shareholding often opt for a Joint Stock Company. This structure allows shares to be distributed among multiple investors, creating an effective vehicle for raising capital. The minimum required capital stands at BGN 50,000. One of the defining features of a JSC is the limited liability of shareholders—they are not personally responsible for the company's financial obligations. Strategic management is executed through a board of directors and shareholder meetings, enabling large-scale coordination and decision-making. It is particularly well-suited for ventures anticipating external funding or public listings.

The Limited Liability Company remains the preferred format for small and mid-sized businesses. It is quick to establish, requiring only BGN 2 in share capital, and offers a simple governance model. The personal risk of each partner is confined to their share in the company’s capital, which makes it an attractive option for those prioritizing financial protection. Management is often centralized in a single appointed director, while more significant decisions are handled collectively by the shareholders. This model works well for entrepreneurs seeking control, cost-efficiency, and limited exposure.

In some cases, entrepreneurs pursue a business structure where members agree to broader financial responsibility than in a typical LLC. These arrangements are less common but offer more contractual flexibility in distributing liabilities and obligations. The model resembles an LLC but includes specific clauses in the founding agreement that may increase partners’ personal exposure in case of losses or insolvency. It’s best suited for experienced partners ready to assume additional risk in exchange for greater control or trust-based collaboration.

Bulgaria also accommodates other legal forms for businesses with specific needs or international ties:

• Branch Offices and Representative Units: Foreign companies may extend operations into Bulgaria without forming a new entity. A branch operates under the parent company’s authority and can carry out commercial activities, while a representative office is limited to promotional and administrative functions without trading rights.
• Cooperative Societies: For collective ventures, such as those in agriculture or retail, cooperatives offer a shared ownership structure. Members work toward mutual benefit, with profits and responsibilities distributed according to pre-agreed terms.
• Sole Proprietor Model: Individuals running independent ventures can register as sole traders. This structure is simple to set up and maintain but involves full personal liability for debts and obligations, which may not be suitable for ventures with higher financial exposure.

The choice of legal form in Bulgaria hinges on practical considerations—company size, desired investment channels, decision-making flexibility, and liability preferences. A well-informed selection at the outset helps build a resilient legal foundation, reduces future compliance risks, and aligns the business structure with strategic growth plans.

Legal Framework for Company Founders in Bulgaria

In Bulgaria, people as well as legal entities can become founders of a business. When you’re registering a Bulgarian company, there are some key details about the founders you’ll want to keep in mind:

Founders can be Bulgarian citizens or come from abroad. The main things for individuals are to have valid identification and the legal right to enter contracts. Foreign nationals need to present official ID documents like a passport. It’s also crucial that these individuals are fully capable under the law, meaning nothing legally restricts them from running or managing a business.

Foreign companies and organizations can also set up Bulgarian firms. They have to provide proof of their legal existence—things like their charter and registration documents from their home country. These entities must appoint someone locally in Bulgaria to act on their behalf. It’s important that they meet all the relevant local rules and show evidence of active business operations and financial health.

There’s no requirement that all founders hold Bulgarian citizenship. Foreigners can register companies just like locals, enjoying equal rights. That said, foreign founders should be ready for some extra steps, such as translating and notarizing their paperwork to comply with Bulgarian regulations.

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Starting Capital and Company Formation in Bulgaria

How much money you need to put into a Bulgarian company at the beginning depends entirely on the business structure you choose. Here’s a quick look at the minimum starting amounts set by law:

• Joint-stock companies 50,000 BGN
• Limited liability companies 2 BGN
• Companies with extended liability 2 BGN

These funds don’t disappear — they must be placed in a business bank account or, in some cases, secured in a specific deposit facility created for new companies. A document confirming the deposit must be submitted to the registration office. You’re not limited to just cash, either. You can use items like tools, vehicles, or real estate, but if you do, a formal valuation must be done to prove the worth of those contributions.

It’s possible to deposit the entire amount in one go or break it into several payments, depending on what the founders agree to and what the law allows. Just be careful to meet all deadlines and formalities — ignoring them might result in unnecessary delays or penalties.

Registering a Company Address

Every business in Bulgaria needs an official address to appear in the registry. This can be an office you rent, your own premises, or an address service provided by a third party.

The key requirement is that this address must actually function — it should be a physical place where official letters and government notices can be delivered and received. This helps ensure you don’t miss important paperwork.

To finalize your registration, you’ll also have to show you have permission to use that address. That might be a lease, a deed, or another official document proving your legal right to operate from the location.

Where Your Company “Lives” — Legal Address Basics

To register a company, you’ll need to give it a real-world home — a physical address in Bulgaria. This doesn’t have to be your own office space; many businesses use rented premises or even specialized registration services that provide official addresses.

What matters is that this place exists and is able to receive letters and notices from government bodies. The address acts as your official mailbox for anything legal or administrative, so it can’t just be a formality — it needs to work.

When you register, you’ll also be expected to show that you’re allowed to use the address. That means you’ll need a lease agreement, proof of ownership, or similar paperwork that confirms your business can legally operate from that spot.

Step-by-Step Guide to Registering a Company in Bulgaria

What Documentation Is Required? Applicants must provide the following:

• Founding documents: signed charter and decision to incorporate.
• Identity verification: passport copies for individuals; registration records for legal entities.
• Proof of address: lease or ownership documentation.
• Bank confirmation: a statement showing the deposit of share capital into a local account.
• Completed registration form and receipt of government fee payment.
• Translations: any foreign documents must be officially translated into Bulgarian and notarized if required.

Thorough preparation of this documentation, aligned with local legal standards, ensures a faster registration process and minimizes the risk of delays.

Business Licenses and Permits in Bulgaria

Not every business can just open its doors and get going in Bulgaria. Some types of work are tightly watched—mostly to protect people’s health, safety, and the environment. So, before you launch anything in certain sectors, you may need to get a green light from the authorities in the form of a license or permit. Here’s where that usually applies:

Finance and Money Stuff. If your business plan includes handling other people’s money—banking, insurance, investing, or managing funds—you’ll need permission either from the Bulgarian National Bank or from the Financial Supervision Commission. Without that, you’re not allowed to even start.

Healthcare and Medicine. Planning to open a clinic, pharmacy, or lab? Then you're dealing with medical licenses from the Ministry of Health. The same goes for selling medicine or doing anything pharmaceutical. Bulgaria doesn’t take shortcuts when it comes to public health.

Energy and Natural Resources. Want to extract, process, or work with natural resources? Or maybe you’re stepping into the energy field? You’ll need approval from the Energy and Water Regulatory Commission—plus maybe other bodies depending on the project. This is serious territory, with big responsibilities.

Certain Types of Trade. Thinking of selling alcohol, cigarettes, or other regulated goods? Local municipalities issue special licenses for that. It’s not just about paperwork—it’s about being allowed to legally run your shop or distribution chain.

Construction and Building Work. If you're building or renovating anything professionally, there are rules. Permits are managed by the Ministry of Regional Development and Public Works or a regional authority. It's not just formalities—they want to make sure things are safe, solid, and up to standard.

So, if your idea falls into one of these categories, get ready for a bit more legwork. But once you’ve got your paperwork sorted, you’re good to go.

Licensing Process

In Bulgaria, licensing a business requires several steps:

Before gathering papers or filling out forms, take a moment to understand what kind of license your business activity falls under. Not everything requires the same paperwork. This usually means calling the relevant authority or asking a professional who’s dealt with it before. It saves a lot of guesswork and confusion later on.

Start preparing your documentation once you know what's needed. An application form, corporate registration documents, financial reports, and evidence of legal compliance are required. Licenses from the past may be sought. The list varies per industry, so double-check.

When everything’s ready, send your file to the appropriate office. Some places accept online submissions, others still prefer paper. It’s important to follow their instructions closely — missing one small detail can slow things down more than you’d think.

Your file won’t just sit there — the licensing body will go through it carefully. They’ll check your compliance with legal and technical standards, and may ask you to clarify or add something. They’re looking at both your documents and your company’s overall readiness to operate.

If everything checks out, they’ll issue your license. This is your official go-ahead to run your business. In some sectors, licenses last a fixed number of years; in others, they remain valid until something changes.

If you ever need to renew, you’ll need to take the same actions again. And during the time you hold a license, your company is expected to stick to the conditions listed in it — including reports and follow-ups if required.

How Taxes Work for Companies

Bulgaria keeps things fairly simple when it comes to corporate taxes. Its business climate appeals to international investors not just because of the potential earnings, but also thanks to consistent policies and clear tax rules. Companies, including startup businesses, benefit from a setup that doesn’t intervene with growth — which is why the country keeps on drawing in funds and borrows ideas from abroad.

Tax Perks and Quirks for Foreign Entrepreneurs

If you're not local but thinking of doing business in Bulgaria, here's something to smile about: the country rolls out certain tax perks for non-resident investors—especially when the money goes toward jobs or sectors the economy cares about. These benefits usually take the shape of reduced tax on profits or deductions linked to specific types of spending.

Tax Credits and Investment Encouragement

Bulgaria offers a few curious tools to nudge investors in the right direction. Here are some of the more useful ones:

Local businesses making major purchases—be it machines, software, or even real estate upgrades—can knock off up to 10% of their capital costs through a tax credit. There’s a floor, though: your investment must cross 500,000 BGN (roughly €256,000). You’ve got five years to use the credit from the moment the spending happens.

Doing something new? If your company is officially engaged in research or inventing tech solutions, you can claim up to 150% of your R&D costs as deductions. That includes salaries of your research team, materials, and service expenses. There’s a ceiling, though: your total deduction can’t go over 30% of your company’s taxable income. The work must be properly documented as research to qualify.

Thinking of expanding your team? You might get relief on up to half of what you spend bringing new people on board. To unlock this, a company needs to add at least 10 full-time positions within a year. Each role must meet the country’s minimum wage and be official, not freelance. This hiring-based perk sticks around for three years after you meet the headcount target.

Tax Breaks for New Businesses

There is good news: the tax system is on your side if you work in a high-potential field like technology or new ideas. A flat 10% corporate income tax is good for new businesses in these areas. This is one of the lowest rates in the EU.

And that’s not all — dividends paid out by newly established Bulgarian companies may even be tax-exempt, making it more attractive for investors and founders looking to reinvest or grow their capital.

Location also matters. If you set up your company in a less developed region of the country, you might qualify for additional incentives aimed at boosting local economies — think reduced tax rates or special support programs.

Bulgarian-registered companies must register with the NRA before operating. A unique identification code (BULSTAT) is given to the firm throughout this procedure and is used for all fiscal and tax records.

• Corporate Tax Reporting Companies are legally obliged to submit a corporate income tax declaration annually. This report must be delivered no later than March 31 of the year that follows the financial period being reported. It should cover all revenue streams, deductible costs, and the final tax due.
• VAT Declarations Depending on how much money they make, businesses that are registered for VAT must file returns either once a month or three times a year. You have to turn these papers in 14 days after the end of each reporting session. VAT that needs to be paid must be sent by the 14th of the following month.
• Tax on Dividends When distributing dividends to shareholders, companies must also declare and settle the applicable tax. This must be done within 15 days after the payment. The submitted declaration should specify the dividend amounts and the exact tax withheld.

Tax forms can be submitted online through the NRA’s digital system. This approach minimizes human error and ensures faster processing. While physical filing at tax offices is still possible in certain cases, online submission is mandatory for most companies by law.

All companies are required to maintain proper books and financial records, documenting income, expenditures, and any transactions relevant for tax assessment. These records must be kept in accordance with Bulgarian accounting principles and applicable legal formats.

Companies that meet certain requirements, like making more than BGN 1 million a year or having more than 50 workers, have to go through yearly checks. Along with the yearly financial records, the audit findings must be sent in.

Every year, tax returns for businesses must be turned in by March 31. Depending on how the business is classified, VAT and other taxes may need to be updated more often, either monthly or yearly. Delays in submission or payment may lead to penalties and regulatory consequences.

Failure to provide complete or timely reports can result in financial fines, interest charges, or inspections initiated by tax authorities. Companies that fail to comply may also face restrictions or additional audits.

Foreign entities operating in Bulgaria are held to the same reporting and taxation standards as local companies. However, they may encounter extra obligations related to intercompany settlements, profit repatriation, or bilateral tax agreements involving their home country.

Banking Services for Corporate Clients in Bulgarian Financial Institutions

Bulgaria hosts several banks that stand out as particularly accommodating to foreign entrepreneurs. Among the most trusted names are UniCredit Bulbank, DSK Bank, and United Bulgarian Bank (UBB). These institutions aren’t just fluent in international finance—they’re equipped to work with cross-border businesses, offering multilingual support and dedicated services tailored to non-resident companies.

Corporate banking in Bulgaria goes well beyond standard checking accounts. Companies gain access to operational and investment credit lines, overdraft options, leasing solutions, and factoring services. You’ll also find capital management tools, investment banking offerings, and expert guidance for restructuring or scaling your operations.

Opening a Business Account

Setting up a corporate account isn’t overly complicated, but it does require a precise documentation set:

1. Founding documents and official registration certificates
2. Board resolution confirming the appointment of the company’s manager, plus their passport
3. Proof of the company’s financial compliance and legitimacy

The timeline to activate the account depends on the bank you choose. In straightforward cases, it takes just a few business days. In more complex setups, expect up to two weeks.

Currency Controls and International Transactions

Currency operations fall under the oversight of the Bulgarian National Bank (BNB). As a corporate client, you can engage in foreign exchange trades, cross-border transfers, and FX swaps. That said, some transactions—especially those involving large sums—require advance notice or formal approval from the BNB.

Together, these banking capabilities offer solid infrastructure for foreign companies operating in Bulgaria. They not only simplify financial management but also support long-term growth in a regulated and internationally accessible environment.

Conclusion

Corporate formation in Bulgaria is a strategic decision that involves legal, economic, and administrative clarity. A companion who understands the terrain may help you avoid expensive mistakes on this journey.

YB CASE confidently occupies its function. Foreign investors wishing to start or grow in Bulgaria get full assistance from the company. YB CASE helps set up a sustainable, compliant company by assisting with registration and understanding local legislation and regulatory procedures.

Unique approaches are given to clients. Whether you're starting a firm or growing an international organization, YB CASE customizes its services. Their company handles everything from choosing a legal structure to completing registration forms and providing legal help with accuracy and clarity.

Case Studies by YB CASE

YB CASE has successfully delivered a wide range of business registration projects in Bulgaria, offering clients not just paperwork support, but end-to-end strategic and legal guidance. Below are three distinct examples that illustrate how the firm adapts to different industries and client needs.

Case 1: Launching an E-Commerce Business in Bulgaria

One of YB CASE’s recent engagements involved setting up an online retail company for a client focused on cross-border sales across Europe. Bulgaria was selected for its favorable tax regime and a business-friendly environment that supports fast-paced commercial activity.

At the outset, the YB CASE team helped the client determine the appropriate legal structure, ultimately recommending the formation of an LLC. This choice offered a solid balance between operational flexibility and personal asset protection. The firm took full responsibility for drafting and submitting all necessary documentation, including articles of association and registration with the national commercial register.

Beyond incorporation, YB CASE conducted a thorough review of the local tax system, guiding the client toward optimal tax schemes. This included VAT registration and identifying favorable compliance paths. A key aspect of the project involved securing the appropriate e-commerce licenses, enabling the client to operate online legally and with confidence.

Case 2: Relocating a Company from the UK to Bulgaria

In another successful case, we helped a client from the UK move its business to Bulgaria to save money on taxes. At every step of this difficult change, YB CASE was there to help.

First, a thorough law and tax analysis was done to find the best setup in terms of cost and compliance. Once the best plan was decided upon, the YB CASE team set up a new business in Bulgaria, making all the necessary paperwork and communicating with the tax officials.

At the same time, the firm helped with the winding down of the original UK company and the legal and financial transfer of assets and debts. All steps were coordinated to make sure a smooth, legal change, with lowering risk as the main goal. This meant making plans for the legal and practical aspects of leaving the UK and quickly starting up in Bulgaria.

Case 3: Incorporating a Logistics Business in Bulgaria

Also, YB CASE helped start a transportation company that will serve the Southeast European region. The client picked Bulgaria because of its location and stable government, which made it a great place to start for regional delivery operations.

YB CASE helped with every step, from forming the company to getting governmental permissions. This meant taking care of the licensing process for transportation services and helping with talks and legal reviews for renting warehouse and office space, which were important parts of the project's infrastructure.

The company also created internal governance policies that were in line with Bulgarian business law. These policies helped the client set up structured internal controls. Tax planning and practical cost efficiency were also discussed, along with tax breaks for companies related to transportation.

These case studies highlight YB CASE’s ability to deliver tailored, full-cycle solutions that go far beyond simple incorporation. Each engagement is structured around legal precision, strategic insight, and a strong commitment to helping clients succeed in the Bulgarian market.