Incorporation in Bulgaria
Bulgaria
Bulgaria offering exciting , one of the lowest Tax politics , one of the lowest corporate tax rate in EU – 10% . Fast and predictable VAT obtaining and maintenance attracts more and more trading companies to choose Bulgaria.
The two most popular legal ways of carrying out business in Bulgaria are as a joint stock company (AD) and a limited company (OOD). They restrict the liability of the shareholders to the amount of their personal shares in the initial capital of the company, which makes the AD and the OOD the preferred way to do business for both locals and foreigners in Bulgaria
Popular applications
- VAT TRADING COMPANY in Europe
- Import from third countries
Corporate requirements
- 1 Board member required (only private person) – can be citizens of any country.
- All corporate and accounting documents are prepared in Bulgarian and English language.
- Minimum share capital €1
- Local Registered Office address required.
Bank account introduction
Bank account introduction is offered with personal visit at major Bulgarian banks.
Remotely- Luxembourg, Cyprus or third part payment providers. Please contact us for further details.
Timescales
New company set-up or shelf company transfer within 5 business days. VAT registration 15-20 business days. (Tax authorities may request additional information, such as contracts and invoices with Bulgarian vendors/clients). It takes a minimum of 15-20 business days for bank account activation upon receipt of required information and originally signed bank forms.
Accounting requirements
submitted for each 12 month fiscal period, which can be up to 15 months for newly established companies in the first fiscal year (standard fiscal year is the calendar year, January-December). Deadline to submit the Annual Report to the State Revenue Service is March 31th.
An audit of the Company’s Annual Report is required if at least 2 out of 3 below criteria are met:
- balance sheet total - EUR 1 500 000
- annual turnover – EUR 2 500 000
- number of employees - 50
How do I proceed?
In order to commence incorporation and account introduction, we will require the following:
- Detailed description of company work with Completed bank questionnaire form.
- CV and/or Recommendation letter of the Beneficial Owner/ Authorised Signatory
- Passport copy + utility bill not older than three months of Beneficial Owner, Directors and Shareholders.
- For corporate shareholders – certified corporate documents with translation. Ask us for details.
- Company Register forms (prepared by Confidus) must be certified and/or legalized Local Bulgarian embassy or consulate. Ask us for details.
- 100% of the company formation cost.
Trading with VAT
The most popular business entity is the limited liability company broadly used as European trading vehicle as VAT registration is normally easy to obtain, and the corporate tax is only 10%.
Typical structure
A Client in one country orders goods from a Bulgarian intermediary company, which sources the goods from the supplier directly to the client. Such movement of goods is called triangulation.
If the Supplier Company in EU is registered with VAT number it can zero rate its invoice to the Intermediary company only if the Intermediary company is as well registered with EU VAT number.
In case the Intermediary company does not have EU VAT number, the Supplier must charge full VAT at its local rate to the Intermediary Company.
If the Bulgarian company sources out the goods to the EU client with VAT, then it also applies 0% VAT to its invoices.
In case of export of goods, no VAT is applied.
Taxation
A Bulgarian company is taxed on worldwide income at standard rate of 10%. Withholding tax 5% is applied to a profit distributed to individual Shareholders, unless the rate is decreased by a treaty. Structuring is possible to omit withholding tax completely.
One must note that any payment to any non-EU offshore company (see complete “black list” at the end) – whether dividend, loan or invoice payment – is taxed 10% at time of transaction.
Bulgarian company can obtain Tax residence certificate in order to use double tax treaties.
POPULAR PACKAGE
Registration fees:
- Shelf Company with VAT number
- Bank account set-up remotely
- Domicile/Legal address
- Annual Report & Tax return