The Limited Liability Company (LLC) is the most popular business structure for foreign entrepreneurs in Bulgaria. In Bulgarian, it’s known as OOD when there are multiple owners or EOOD for a single owner. This structure offers limited liability protection and a relatively simple company formation process. This guide provides a comprehensive overview of how to set up an LLC in Bulgaria, including key requirements, steps, and important considerations for foreign company registration.
Important Update: Foreigners may currently face challenges opening escrow accounts for initial company capital deposits in Bulgaria. Consider registering as a tax resident or obtaining a Bulgarian staying permit to increase your chances of success.
Key Features of an LLC in Bulgaria:
- Limited Liability: This ensures that owners’ personal assets are shielded from business debts and obligations in Bulgaria.
- Flexible Ownership: An LLC in Bulgaria can be owned by one person (EOOD) or multiple individuals or companies (OOD), making it suitable for various business opportunities.
- Minimum Capital: The minimum capital requirement for an LLC in Bulgaria is currently 2 BGN (around 1 EUR), although a higher amount is recommended (500-1000 BGN) for credibility.
- Management: An LLC in Bulgaria is managed by a director(s) appointed by the owners.
Steps to Registering an LLC in Bulgaria:
Phase 1: Company Registration
- Information Gathering: To register an LLC in Bulgaria, you’ll need to gather the following information:
- Company Name: Choose a unique and available name.
- Owner(s) Information: Full name, date of birth, contact details, and ID/passport copies for all owners.
- Manager Information: Same details as above for the appointed director(s).
- Business Activity: Briefly describe your primary business activity for your Bulgarian company.
- Capital Amount: Decide on the capital amount (minimum 2 BGN).
- Number of Shares: Determine the number of shares for each owner (if applicable for an OOD).
- Registered Address: Secure a physical address for your company in Bulgaria.
- Document Preparation: A lawyer specializing in Bulgarian company law will prepare the necessary incorporation documents in Bulgarian.
- Notary and Bank Visits:
- A lawyer or representative will accompany you to a notary to sign the incorporation documents and a power of attorney.
- You’ll need to open an escrow account at a Bulgarian bank and deposit the initial capital.
- Trade Register Filing: The lawyer will submit the documents to the Bulgarian Trade Register for processing (typically 2-5 business days).
Phase 2: Post-Registration Setup
- Accounting Services: Choose a local accountant and sign a contract for bookkeeping, accounting, and tax services for your Bulgarian LLC.
- Power of Attorney: A power of attorney may be prepared to authorise your company representative to handle future administrative tasks.
- Bank Account Transition: Convert the escrow account to a regular business current account and set up online banking access for your Bulgarian company.
Phase 3: VAT Registration (Optional)
- VAT Assessment: Discuss VAT requirements in Bulgaria with your accountant to determine if registration is necessary or beneficial for your business. You can learn more about VAT in Bulgaria in this article: VAT in Bulgaria.
- VAT Registration Filing (if applicable): If required, the accountant can file a VAT registration application after the company is officially registered. Obtaining a VAT number typically takes around two weeks.
Additional Considerations:
- Timeframe: The entire LLC registration process in Bulgaria can be completed in around 3 weeks, depending on bank processing times and availability.
- Physical Presence: While not strictly mandatory, being present in Bulgaria for the initial notary and bank visit can expedite the process.
- Professional Help: Consulting with a lawyer and accountant is highly recommended to ensure smooth Bulgaria company incorporation, compliance with Bulgarian regulations, and proper accounting practices.
Conclusion:
Ready to establish your LLC in Bulgaria and unlock the country’s business potential? Contact us today for expert guidance and support throughout the entire process.
Frequently Asked Questions (FAQ) on Setting Up an LLC in Bulgaria
- What is the difference between an OOD and an EOOD?
Both OOD and EOOD are limited liability companies in Bulgaria, differentiated by the number of owners:
- EOOD (Еднолично дружество с ограничена отговорност): A single-owner LLC.
- OOD (Дружество с ограничена отговорност): An LLC with multiple owners (individuals or companies).
- What is the minimum capital requirement for an LLC in Bulgaria?
The minimum capital requirement is currently 2 BGN (approximately 1 EUR). However, a higher amount (e.g., 500-1000 BGN) is recommended for business credibility. - Do I need to be physically present in Bulgaria to register an LLC?
While physical presence can expedite the process, it’s not mandatory. You can grant power of attorney to a legal representative to handle registration. - Can I open a Bulgarian bank account remotely?
Opening a bank account remotely can be challenging for foreigners. Explore options with different banks or consider obtaining a Bulgarian residency permit. - How long does the LLC registration process in Bulgaria typically take?
The process can be completed in about 3 weeks, depending on factors like bank processing times and document preparation. - What are the ongoing costs associated with running an LLC in Bulgaria?
Besides registration fees, ongoing costs include accounting services, taxes (corporate income tax, VAT if applicable), and annual fees for a registered office address. You can find more information about taxation in Bulgaria in this article: Taxation in Bulgaria. - Do I need to register for VAT in Bulgaria?
VAT registration depends on your business activities. Consult with a local accountant to determine if it’s necessary or beneficial. - Where can I find more information about Bulgarian company law and regulations?
The Bulgarian Commercial Register (Търговски регистър) provides official information. You can also consult with us or a lawyer specialising in Bulgarian company law.