Company Formation in Bulgaria: Challenges & How to Avoid Pitfalls

Bulgarian LLC benefits for foreigners

Why has Bulgarian company formation become so popular? The advantages extend far beyond just one or two perks. For international founders, the country provides a robust platform for EU operations.

• Ultra-Low Tax Environment: A flat 10% corporate income tax rate is one of the most competitive in the entire EU.
• Minimal Capital Requirement: You can establish a limited liability company (OOD or EOOD) with a share capital of just 2 BGN (about €1). Our team has processed applications where this exact minimal amount was used, confirming its viability.
• Full EU Market Access: As an EU member state, Bulgaria provides seamless access to the European Single Market for trade, talent, and services.
• Remote Registration: You don’t need to be physically present in Bulgaria to register your company. The entire process can be handled remotely with the right Power of Attorney.
• Affordable Operations: Compared to Western Europe, costs for skilled labor, rent, and professional services are significantly lower.

Thinking about the right jurisdiction for your goals? We Form Online makes it simple—our team handles everything from name registration to compliance setup across many locations. Explore our Company Formation Services to see how we can help.

The Step-by-Step Process of Company Formation in Bulgaria

While streamlined, the path to a successful Bulgarian company registration requires precision. Here’s a look at our proven, step-by-step process that ensures compliance and efficiency.

Step 1: Choosing Your Company Structure and Name

First, you must decide on the legal entity. The most common choice for foreigners is the Limited Liability Company—either an OOD (for multiple shareholders) or an EOOD (for a single shareholder). You’ll also need to choose a unique company name, which we verify for availability directly with the Bulgarian Commercial Register to prevent rejection.

Step 2: Preparing and Notarizing Documents

This is where meticulous attention to detail is critical. Our team prepares all required documentation, including:

• Articles of Association: The foundational document outlining your company’s governance.
• Founder’s Declaration: A formal statement of your intent and eligibility.
• Power of Attorney (PoA): Granting us authority to act on your behalf in Bulgaria.

These documents must be translated into Bulgarian by a certified translator and then notarized and apostilled. We manage this entire workflow to ensure every document meets the strict formal requirements.

Step 3: Opening a Capital Bank Account

Before registration, you must deposit the minimum share capital (at least 2 BGN) into a special ‘capital’ bank account. We facilitate this process by preparing the bank’s required due diligence paperwork and guiding you through their KYC (Know Your Customer) procedures, which can be a major hurdle for non-residents without assistance. This is one of the most common friction points we see clients face before they come to us.

Step 4: Official Company Registration

With the notarized documents and proof of capital deposit in hand, we submit the application to the Bulgarian Commercial Register. As of 2023, guidance from the Bulgarian Ministry of Economy and Industry states the standard procedure involves lodging the documents electronically for the quickest turnaround, a process detailed in their guide for SMEs starting a business.

Step 5: VAT and Tax Registration

Following incorporation, your new company must be registered for tax purposes. If your business activities require it, or if you exceed the revenue threshold, we will also handle your VAT registration. This is a crucial step to fulfill all legal obligations for companies in Bulgaria.

Navigating Common Challenges

The step-by-step process of company registration looks straightforward, but pitfalls can emerge.

• Document Rejection: The Bulgarian Commercial Register is notoriously strict. A small mistake in a translated document or a missing signature can lead to outright rejection and costly delays. Our bilingual legal experts review every single line to preempt these issues.
• Banking Hurdles: Many Bulgarian banks are hesitant to open accounts for foreign-owned companies without a clear business case and impeccable paperwork. Our established relationships and expertise in preparing KYC documentation make this process much smoother.
• Understanding Legal Obligations: From annual financial reporting to understanding VAT thresholds, staying compliant is non-negotiable. Our optional accounting and advisory services ensure you never miss a deadline.

We Form Online offers services in a wide range of business-friendly locations beyond Europe. You can see the full list on our All Jurisdictions page.

Ready to Start Your Bulgarian Company Formation?

Bulgaria presents a prime opportunity for entrepreneurs seeking a strategic, low-tax base in the EU. But turning that opportunity into a reality requires navigating a complex administrative landscape. By avoiding common pitfalls in documentation, banking, and tax, your business can launch with confidence and speed.

Ready to launch your Bulgarian business without the bureaucratic headaches? Start your Bulgarian company registration with We Form Online today. Our expert team is ready to manage the entire process for you, ensuring a fast, compliant, and successful launch.

Author:

Iliya Talman and Svetoslav Stoitsev, Head of Bulgarian Formations at We Form Online
With over a decade of experience specializing in Central and Eastern European markets, Alex has personally overseen more than 200 company formations in Bulgaria. His expertise lies in navigating cross-border legal compliance and simplifying the registration process for foreign investors.

Reviewed by: Svetoslav Stoitsev, Corporate Lawyer