More and more often we receive questions related to opening a company by a foreigner. In the next article we will try to give an answer and explain the procedure for registering a company by a foreign citizen in Bulgaria. Here you will learn which foreigners can register companies in Bulgaria, whether the respective foreigner must live in the country, how much it costs to register the company and others.

When it comes to opening a company by a foreigner in Bulgaria or transferring the management of an existing one in our country, the presence of certain specifics must be taken into account. As the person is not a citizen of the Republic of Bulgaria, slightly different and additional provisions and legal requirements apply to him. Before we talk about them, let’s first focus on the reasons why a foreigner would register a company in Bulgaria.

The pros of opening a company by a foreigner can be divided into two groups – social and economic.

Social benefits

Most foreigners who are not citizens of the European Union register companies in the country for the purpose of residing in the territory. For example, a foreigner from the Middle East can undertake remote company registration and, in compliance with legal requirements and rules, quite legally start living and doing business in Bulgaria.

Economic benefits

Here we mean the low taxes in our country compared to Western EU members. This is the reason why many companies are reorienting their management in our country, as it is very cheap for them. Accounting services can also be negotiated at very good prices in a Bulgarian accounting firm. Another economic factor in opening a company by a foreigner is the extremely low salaries, compared to European ones. That is why it is extremely profitable for the big European producers to redirect their production to Bulgaria.

Which foreigners can register companies in Bulgaria?

All foreign citizens have the right to register their company in Bulgaria. There is no restriction on whether or not the foreigner concerned is a citizen of an EU Member State. We want to mention here that the person does not need to reside in Bulgaria to open a company here. It is also not necessary to understand or speak Bulgarian. In this case, we recommend that the documents be bilingual.

The first step in opening a company by a foreigner, as well as in any registration of a company is to open the so-called accumulation account. You can read more HERE.

Here is the time to note something very important. Recent amendments to the Anti-Money Laundering Measures have complicated the process of opening fundraising accounts. Following these changes, opening a fundraising account for foreign companies has become difficult, and for third-country nationals (non-EU nationals) it has become almost impossible.

What is the procedure?

The procedure for opening a company by a foreigner is in fact no different from that of Bulgarian citizens. Here, too, the minimum capital for registration of Ltd. / Ltd. is BGN 2, the documents submitted to the Commercial Register are also identical. State fees are unchanged. The partners are not responsible for the obligations of the company with their personal property.

Specifics (*this is not all the specifics)

1. When opening a company by a foreigner, it is important that he / she is aware of the content of the documents he / she signs. There are 2 possibilities:

• Registration documents must be translated into the foreigner’s mother tongue or another language he understands. In this case, a bilingual version of the documents is prepared. The translation may not be made by a sworn translator, but then the person who did it should indicate his names, certify the accuracy of the translation and sign it.
• When opening a company by a foreigner, there is the following possibility. The documents may not be translated, but in this case a person who knows the relevant language must declare that he has translated the contents of the documents into a language understood by the foreigner and sign. The foreigner, for his part, must also declare that he understands the meaning of the documents and sign. These actions are performed before a notary.
• Of course, if the foreigner speaks and speaks Bulgarian, the need for translation is eliminated.

2. Another specificity is that the name of the foreigner should be written in Cyrillic.

Is it possible to open a company by a foreigner remotely?

The answer is yes! Foreign citizens can register companies in Bulgaria without being physically present in the country. To open a company by a foreigner, the foreign citizen must notarize the documents in the country where he resides. The role of a notary abroad for Bulgarian documents is performed by the Bulgarian embassies and consulates.

The other option is a local notary. This complicates and makes the process much more expensive. The local notary can certify the documents only if they are in his own language, after which they have to go through translation into Bulgarian and legalization, which also considerably prolongs the process.

The two documents that must be certified in case you will remotely open a company by a foreigner are again the sample signed by the manager, but also a power of attorney to open a fundraising account of the company and deposit capital on behalf of the partners.

We are ready to assist you and advise you on issues related to starting a company by a foreigner in Bulgaria. CONTACT US!

Service	Price
Formation of a Bulgarian EOOD company	100 €	Order
Liquidation of a Bulgarian company	200 €	Order
Formation of a Bulgarian OOD company	100 €	Order
Formation of a Bulgarian EOOD holding	499 €	Order
Formation of a Bulgarian OOD holding	599 €	Order
Opening of a Bulgarian Trade Representative Office (TRO)	799 €	Order
Formation of a Bulgarian joint stock company	899 €	Order
Formation of a Bulgarian joint stock holding	1,199 €	Order
Registration of a Branch Office in Bulgaria	699 €	Order
Bulgarian Ready Made Company	1,599 €	Order
Registered office address outside of packages	100 €	Order
Change of the company's name	149 €	Order
Change to the company's capital	149 €	Order
Other changes in the company's circumstances	149 €	Order
Opening of a Bulgarian company bank account	249 €	Order
Bulgaria VAT Registration	199 €	Order
Bulgarian Police Clearance Certificate	99 €	Order
European Health Insurance Card	50 €	Order
Assistance to buy a property in Bulgaria	499 €	Order

The experienced chartered accountants of VARNAFLATS.EU Ltd. can assist you with accounting services, tax advice and assistance to obtain tax residence of Bulgaria. 

One of first and most important question for people looking to establish a company in Bulgaria is: “What are the accountancy fees in Bulgaria?”. You will often get this question answered with: “That depends, we need some more information before we can tell you”. And yes it actually depends on a few basic things: number of personnel, number of invoices and whether your company is VAT registered.

Annual Accounting fees in Bulgaria 

Prices for 2024

Monthly Documents	Before VAT registration	After VAT registration
Minimalist light
up to 10 docs	100 €	200 €
Minimalist
up to 20 docs	200 €	400 €
Professional
up to 50 docs	300 €	400 €
Business
up to 100 docs	500 €	600 €
Enterprise
up to 150 docs	700 €	800 €
Bulk
up to 1000 docs	1,000 €	1,400 €
up to 5000 docs	1.400 €	1,600 €
up to 10000 docs	3,600 €	4,800€
up to 20000 docs	4,200 €	6,000 €

If you believe that our monthly accounting packages are too broad and they do not fit your business needs, please contact us for an individual offer.

The above Accounting & Bookkeeping service fees apply if you prepay twelve months services. Prepaying twelve months accounting services, you get two months free. 

If your company is VAT registered but it is not actively trading, we can assist you with the monthly VAT declaration for only 25 € monthly or 250 € if prepaid for 12 months’ service.

Benefits of using our Bookkeeping & Payroll services

• If you incorporate a Bulgarian company with us, you will get 2 months free accounting services;
• Purchasing our accounting services in Bulgaria, we will assist you to obtain certificates S1 and A1 free of charge;
• Our accounting packages include monthly Balance, Profit & Loss Accounts, Cash Flow Report and Own Capital Report in English;
• You can upgrade or downgrade your monthly accounting plan any time, paying the difference between the two packages;
• If you change your current Bulgarian Accountant with us, you will get 3 months free accounting services in Bulgaria (if prepaid 12 months accounting services);
• Shifting your accounting work to us, we may assist you to change your registered office address for free of charge;
• Prepaying twelve months accounting and bookkeeping services, you get VAT and EORI registration for free;

Frequently Asked Questions

When is VAT registration required?

VAT registration is not required if the turnover is up to BGN 50 000. However, there is a requirement that if a company provides services to VAT-registered customers from another EU Member State, it must be registered for VAT seven days prior to the service, its invoicing, and payment. If the company is not VAT registered, VAT will be charged on the invoice for purchases from the EU. When a Bulgarian company that is VAT registered carries out transactions with VAT-registered companies in another EU Member State, VAT is not charged. For services from third parties (non-EU Member States), VAT is not due. In the case of transactions with third parties with goods, customs must be passed.

What is the procedure for VAT registration?

After submitting an application for VAT registration within seven days, the requested documents from the National Revenue Agency must be submitted, which include a turnover statement 12 months before the current one, bank statements at the time of filing the application, contract for using of the address of registration in the Commercial Register of the company, an accounting service contract, and a power of attorney. After submitting all the documents to the NRA, the person is registered for VAT up to seven days.

What happens after the VAT registration?

All purchase invoices, sales invoices, and bank statements must be sent until 10^th of the month. The VAT declaration is submitted by the 14^th of the following month.

How VAT can be refunded?

VAT refunds are made three months after the first refund occurs.

Self-insured person in Bulgaria

Any person who is the owner and manager can be insured as a self-insured person on a minimum insurable income of BGN 610,00 in 2020 up to a maximum insurable income of BGN 3000,00. The amount of social security contributions for SSS, SM, and SMPS per month is 27.8% of the selected insurance income. In this case, the person does not receive a salary and, accordingly, the insurances are not recognised as the company’s expense.

Example:

For a month:

Revenue	BGN 5000,00
Expenses	BGN 0,00
Profit	BGN 5000,00
Tax profit of 10% paid for the calendar year until 31.03 of the next year	BGN 500,00
Insurances for the month on the minimum insurance threshold of BGN 560,00	BGN 155,68
Dividend tax of 5%	BGN 225,00
Total taxes and insurances due for a month	BGN 655,68

Salary

When a person chooses to be insured through a labour contract, each occupation and position in a different economic activity has a minimum salary threshold. In this case, the gross salary is deducted at the expense of the worker, then the DOD is deducted from the salary, and the rest is transferred to the employee. At the same time, insurances at the expense of the employer are also due. Salary in Bulgaria can be paid in cash every month as the worker signs up on a salary payroll and a payslip that states that he has received his salary in cash. When the salary is transferred via bank, a signature is not required as it is visible from the bank account statement.

Example:

Gross salary	BGN 1000,00
Insurances at the expense of the employee – 13,78%	BGN 137,80
Income tax levied	BGN 862,20
Income tax – 10%	BGN 86,22
Total deductions at the expense of the employee	BGN 224,02
Amount to be paid to the employee	BGN 775,98
Insurances at the expense of the employer – 18,92%	BGN 189,20
Total amount of insurances due monthly	BGN 413,22
Amount recognised as company expense monthly	BGN 1189,20

For a month:

Revenue	BGN 5000,00
Expenses	BGN 1189,20
Profit	BGN 3810,80
Tax profit of 10% paid for the calendar year until 31.03 of the next year	BGN 381,08
Dividend tax of 5%	BGN 171,49
Total taxes and insurances due for a month	BGN 794,30

The selection from the two options depends on the realized turnover.

It must be kept in mind that the maximum insurable income is BGN 3000,00, which means that in the case of a salary over this amount, the insurances are due to BGN 3000,00, and only income tax is due on the whole amount.

Example:

Gross salary	BGN 10000,00
Insurances at the expense of the employee – 13,78% х BGN 2600,00	BGN 413,40
Income tax levied	BGN 9586,60
Income tax – 10%	BGN 958,66
Total deductions at the expense of the employee	BGN 1372,06
Amount to be paid to the employee	BGN 8627,94
Insurances at the expense of the employer on the salary – 18,92% х BGN 2600,00	BGN 567,60
Total amount of insurances due monthly	BGN 1939,66
Amount recognised as company expense monthly	BGN 10567,60

Appointment and termination of employment

The number and the date of conclusion of the contract, the gross salary, the occupation, and the economic activity of the company are announced to the NRA. The starting date must be at least one day before the start date. Nothing can be done retrospectively in the labour contracts. The labour relations are terminated at most seven days afterwards.

Payment of social security contributions

All contributions are due by the 25^th of the following month.

Profit tax and dividends

After the end of the calendar year, by 31^st March of the following year, an annual tax return, an annual financial statement for statistics, and profit tax of 10% must be paid. It is offset by the realized profit, and the remaining amount can be distributed as a dividend to the owner by paying 5% of the distributed amount. The rest is transferred to the owner’s personal bank account. If revenue is EUR 90,000 per year and no costs, tax will be 10%, EUR 9,000, due until March 31^st of the following year. After tax deduction, the remaining amount of EUR 81,000 may be distributed as a dividend at a desired time and a 5% dividend tax, EUR 4050, must be paid. If the company has costs, they are deducted from the revenue, and then the corresponding taxes are charged – 10% profit tax and 5% dividend tax.

After submitting an annual tax return to the NRA and an annual report to the NSI by March 31^st of the following year, the annual financial statement is published in the Commercial Register by June 30^th, for which BGN 42,00 is paid.

Companies that have no activity during the calendar year do not submit an annual tax return to the NRA but submit a declaration of inactivity to the NSI and the Commercial Register by March 31^st of the following year for which no fee is due.

Our clients’ portfolio

Our accounting firm mainly assists small and medium sized companies based in the their home countries or in Sofia and Varna regions in Bulgaria and doing business in the following fields:

• IT services
• International trade (export and import)
• Transport 
• Manufacturing
• Real Estate and Construction 
• Tourism and catering
• Car rental service
• Agriculture