Guide · Bulgarian Corporate Law
Company Formation in Bulgaria: A Step-by-Step Guide for Foreign Founders
Author: Velizar Telbiyski - Legal Assistant at Sheyredov Law Firm·Last updated:
Bulgaria offers a competitive business environment in the European Union: a flat 10% corporate income tax, access to the single market, and the possibility to set up a limited liability company with minimum capital of EUR 1, where a single share may not be smaller than one euro cent. This guide walks through the whole incorporation process - choosing the legal form, preparing the documents, paying in capital, filing, and the tax, VAT and social-security consequences that follow.
Bulgaria at a glance
- Corporate income tax
- 10%
- Dividend tax (individuals)
- 5% under the applicable regime
- Standard VAT
- 20% (9% and 0% for certain supplies)
- Minimum capital (OOD/EOOD)
- EUR 1 (share min. EUR 0.01)
- Minimum capital (AD)
- EUR 25,000
- Small-business VAT regime
- Domestic turnover up to EUR 51,130
Choosing the right legal form
| EOOD | Limited liability company with a single owner of the capital. Suitable for sole investments and operating businesses. Minimum capital EUR 1. |
|---|---|
| OOD | Limited liability company with two or more shareholders. Articles of Association are filed, a manager is appointed and the required capital is paid in. |
| AD | Joint-stock company with minimum capital of EUR 25,000. Used for larger projects, investment structures, several investors, or activities where a separate law requires higher capital. |
| Branch of a foreign company | Used where a foreign company wishes to operate in Bulgaria through a registered presence. The tax consequences depend on whether a permanent establishment or fixed establishment arises. |
| Representative office | Suitable only for non-trading presence, contacts and marketing. It is not a legal entity and may not carry out commercial activity; if activity is in fact carried out through it, tax consequences may arise for the foreign person. |
The registration process step by step
1. Choose the legal form and structure
First we determine the number of founders, the management structure, the capital, the origin of the investment, the intended activity and whether it requires a licence or permit. Where a special law requires a permit from a state authority, that licence or permit is presented on filing (Art. 119 of the Commerce Act).
2. Reserve the company name
Before the documents are prepared, we check whether the chosen name may be used. Reserving the name is practically useful where the constitutional documents, the bank procedure and the notarial certifications are prepared in parallel.
3. Prepare the constitutional documents
For an OOD the Articles of Association are filed and announced in the Commercial Register; for an EOOD a sole-owner constitutional act is prepared. A manager (or managers) must be appointed. The Articles state the amount of the capital and, where it is not fully paid in on incorporation, the terms and deadlines for paying the balance - which may not exceed two years from registration (Art. 115(4)(4) of the Commerce Act).
4. Open a capital account and pay in the capital
For registration of an OOD or EOOD the statutory minimum capital must be paid in. Where the company is registered with capital above the statutory minimum, at least 70% of the capital must be paid in (Art. 119 of the Commerce Act).
5. Notarise signatures and file with the Commercial Register
Once the required documents are signed and certified, the application is filed for entry in the Commercial Register. The statutory prerequisites for an OOD/EOOD include filed Articles of Association, an appointed manager, the minimum capital paid in and, where capital exceeds the minimum, at least 70% paid in.
6. Tax and VAT consequences after registration
Once registered, the company is a resident legal person and is taxed on profits and income from sources in Bulgaria and abroad. Profit is taxed at 10% corporate income tax and the annual return under Art. 92 of the Corporate Income Tax Act is filed by 30 June of the following year. VAT registration is not automatic: it depends on turnover, the type of supplies, the place of supply and cross-border services - where services are received from a foreign person and the tax is due by the recipient, registration under Art. 97a of the VAT Act may arise regardless of turnover. From 2026 the domestic small-business regime is linked to domestic turnover of up to EUR 51,130 and further conditions.
7. Social security and management
If the owner, shareholder or manager actually carries out work in the company, social-security obligations may arise, including the self-insured person regime and a declaration on commencement of activity within 7 days. Managers and members of management bodies may fall under a different regime depending on the management contract, remuneration and actual activity. Where the person also works in another EU member state, the applicable legislation is determined under the social-security coordination rules and may be evidenced by an A1 document.
8. Licensed and regulated activities
Where a separate law requires a permit or licence for the intended activity, the permit is presented on filing where this is provided for. Some foreign direct investments additionally require clearance under the FDI screening regime - the application is filed with the Bulgarian Investment Agency in Bulgarian with an English translation, together with documents on the investor, the ownership structure, and the value and financing of the investment.
Documents foreign founders should prepare
- Identity documents and details of each individual founder and of the manager.
- Documents evidencing the existence and power of representation of a corporate shareholder.
- Corporate resolution of the shareholder approving participation in the Bulgarian company and appointing a representative.
- Translation and the appropriate form of authentication for documents issued abroad, according to the issuing state and the applicable international rules.
- Power of attorney where the incorporation is handled through a representative.
- For investments under the FDI screening regime: documents on the constitutional act, ownership, the ultimate investor, and the value and financing of the investment.
Costs and timelines
| State registration fee | Confirmed at the date of filing with the Registry Agency |
|---|---|
| Bank charges for the capital account | According to the tariff of the chosen bank |
| Notary fees | Depends on the number of signatures certified |
| Translation and authentication | Where documents issued abroad are used |
| Legal fee | Fixed fee agreed upfront after a short scoping call |
| Timeline | Depends on document readiness, the bank procedure, notarial certifications and the registry workload |
Mistakes that delay registration
- Capital not paid in to the required extent: at least the statutory minimum, and at least 70% where the capital exceeds the minimum.
- The Articles of Association do not regulate the terms and deadlines for paying in the balance of the capital; that period may not exceed two years from registration.
- Starting an activity that requires a licence or permit before the relevant authorisation is in place.
- Failing to analyse whether VAT registration arises on special grounds, including on receipt of services from abroad, where registration may be required regardless of turnover.
- Failing to analyse the social-security consequences for a foreign owner or manager who actually carries out activity in Bulgaria or works simultaneously in another member state.
How we help
Sheyredov Law Firm advises international founders, investors and corporate groups on every stage of establishing a Bulgarian presence: structure, drafting, notarisation, filing, tax and VAT registration, banking introductions and post-incorporation compliance. We work on a fixed fee agreed before we start and can act entirely under power of attorney.
Related: full corporate law service for companies in BulgariaFrequently asked questions
How long does it take to register a company in Bulgaria?
The timeline depends on how quickly the documents are prepared, the bank procedure, the notarial certifications and the current workload of the Registry Agency. We confirm the realistic timeline for your case before filing rather than quoting a fixed number of days.
What is the minimum share capital for a Bulgarian limited liability company?
The minimum registered capital of an OOD or EOOD is EUR 1, and a single share may not be smaller than one euro cent (Art. 117 of the Commerce Act). A joint-stock company (AD) requires a minimum capital of EUR 25,000 (Art. 161 of the Commerce Act).
Do foreign nationals need to travel to Bulgaria to register a company?
Incorporation can be organised through a representative where the documents and the power of representation are properly executed. For investments falling within the foreign direct investment screening regime, the investor and investment documents are filed separately with the Bulgarian Investment Agency.
What taxes apply to Bulgarian companies?
Resident companies pay 10% corporate income tax on taxable profit and file an annual corporate tax return between 1 March and 30 June of the following year. A 5% final tax may apply on dividends distributed to individuals. VAT registration depends on the actual supplies, the turnover and the special registration grounds.
Does the company need a Bulgarian director or a local shareholder?
There is no rule requiring the manager or a shareholder to be a Bulgarian national. Where the owner or manager is a foreign national, the social-security consequences must be analysed, in particular if the person actually carries out activity in Bulgaria or also works in another member state.
What are the ongoing obligations after incorporation?
The company must organise its accounting, file the annual corporate income tax return where the conditions for that are met, analyse whether VAT registration arises, and comply with social-security and employment obligations for staff or for owners and managers who personally carry out activity. Sector-specific licences are obtained where a separate law requires them.
Need legal assistance with company formation in Bulgaria?
Have our law firm handle the incorporation: corporate documents, filings and the registration itself.
Company formation serviceThis guide is general information on Bulgarian law and is not legal advice for a specific matter. Fees, thresholds and procedures change; please confirm the current position before you act.