Growing your company into Bulgaria comes with big opportunities. You’ll get to form new business relationships and enter new markets. However, setting up a Bulgaria subsidiary can be a complicated process.
Luckily, there is another option. With a global Employer of Record (EOR) like G-P, you can bypass entity setup and begin operations in a fraction of the time.
How to set up a Bulgaria subsidiary
When you’re researching how to set up a Bulgaria subsidiary, it will help to decide where you want to incorporate and what type of company structure you need since both can impact the subsidiary setup process. Different regions or cities in Bulgaria may have their own subsidiary laws that can impact how you incorporate. If you don’t have time to research the area around a physical office space, you should work with a consultant or lawyer who can help you through the process.
We also recommend deciding which subsidiary structure is best for your company. Your actions will be limited by the entity you choose, and each structure has its own incorporation process. Bulgaria’s business entities include a limited liability company (LLC), joint-stock company, limited partnership, free zone company, sole proprietorship, branch office, and representative office. Most companies choose to incorporate as an LLC since it can benefit both the subsidiary and the parent company.
The steps to set up an LLC in Bulgaria, include:
- Designating at least 1 shareholder.
- Choosing the new company’s name and confirming its availability before the Bulgarian Commercial Register.
- Defining the share capital of the new company. The minimum statutory share capital is EUR 1.
- Obtaining a registered address in the selected location.
- Choosing a legal representative to be appointed as director of the new company. Non-nationals can be appointed but may need to have a tax ID number for the online services of the Bulgarian tax authorities.
- Drafting a memorandum and articles of association, along with additional incorporation documentation that must be prepared by a local attorney.
- Creating a resolution of the parent company detailing the decision to create a subsidiary.
- Obtaining documents from the new company’s shareholders. These include certificates of registration, articles of association and tax registrations and powers of attorneys, among others. Some of these documents may need to be notarized and apostilled.
- Opening a bank account with a local bank. The bank account needs to be setup before the company can be incorporated.
- Filing all documents with the Central Commercial Register at the Registry Agency of the Ministry of Justice.
- Applying for the company’s tax identification number.
Bulgaria subsidiary laws
Bulgaria’s subsidiary laws depend on what type of entity you choose and where your office is located. LLCs need a single shareholder and a single director who can be of any nationality and do not have to live in Bulgaria.
Opening a local bank account can be a lengthy process, taking around 1 month. The appointed director may need to be present to conclude the bank account opening. Once you incorporate, you’ll need to file annual financial statements with the Bulgarian Trade Register every year before March 31.
The country uses a double-entry accounting system stated in the Accountancy Act (ZS) that all LLCs must comply with. Companies have to register for VAT if annual turnover exceeds BGN 50,000 and file VAT returns monthly.
Benefits of setting up a Bulgaria subsidiary
Setting up a Bulgaria subsidiary is the first step for companies looking to expand the traditional way. Many companies expand as an LLC because it offers limited liability to the parent company. It also helps the subsidiary create its own structure and culture based on Bulgaria’s overarching culture.
Other important considerations
Before setting up a subsidiary in Bulgaria, it’s advisable to recognize the amount of time and resources it takes. Someone from your company will need to learn every aspect of Bulgarian subsidiary laws or you’ll need to invest significant amounts of money to hire professional counsel to assist with the setup and maintenance of the Bulgaria subsidiary.
However, G-P can take the hassle out of setting up a subsidiary by hiring employees on your behalf. With a global EOR like G-P by your side, you can start working faster and in compliance with Bulgaria’s employment laws.
Enter new markets with G-P — no new entities required.
Beat the competition and enter new markets in minutes, not months, with G-P. We’ve paired our industry-leading team of in-region HR and legal experts with our #1 global employment platform to help you hire compliantly in 180+ countries, eliminating the need to set up local entities or subsidiaries.
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