Company formation in Bulgaria does not require the owners to travel: a limited liability company is registered with the Commercial Register by electronic filing through a Bulgarian lawyer under an apostilled power of attorney, in 7–14 working days from abroad. What decides whether the structure actually works is not registration but the bank collection account for the capital, the bank review of foreign owners, the residence permit tied to employing Bulgarian staff, and how the company is treated in the country where its shareholders live.
Company formation in Bulgaria: which structure is right for you?
For most foreign investors, company formation in Bulgaria means a limited liability company: 100% foreign ownership, EUR 1 minimum capital, a manager of any nationality, the EU VAT and customs regime and a flat 10% corporate tax. It exists in a single-member and a multi-member form; in the incorporations we run, the choice depends on who the shareholder will be and whether a separate legal entity is wanted.
Formed with a passport and a notarised, apostilled power of attorney; in the single-member form the owner’s decision and founding act are signed by the owner, with no notarisation.
- Separate legal entity, limited liability
- No residence permit needed for the shareholder
- Dividends are declared in the shareholder’s home country
The parent’s registry extract, resolution and power of attorney are apostilled and translated into Bulgarian by a sworn translator; Bulgaria is party to the Apostille Convention, so no consular legalisation is needed.
- The parent receives profits as participation income
- Document preparation adds 2–3 weeks
- The resolution states capital, name and representative
A branch may trade and its obligations stay with the parent; a representative office may only promote and cannot earn income.
- Branch profit is taxed in Bulgaria
- All parent documents must be apostilled
- A representative office is registered with the chamber of commerce
In company formation in Bulgaria, a joint-stock company is used for raising capital, a listing or a regulated sector: EUR 25,000 capital (at least a quarter paid before registration), a board of at least three members or a two-tier structure, and a statutory audit every year. Otherwise the limited liability company is enough; most investors choose it for company formation in Bulgaria. A sole proprietorship carries unlimited liability and, for people from outside the European Union, depends on residence status.
Whatever the structure, the case for company formation in Bulgaria rests mainly on tax and cost: a flat 10% corporate tax unchanged since 2007, 10% income tax, 5% withholding on dividends, a EUR 620.20 monthly minimum wage and moderate social security. A corporate tax exemption for production in high-unemployment municipalities, a 25% extra deduction for research costs and Class A and B certificates under the Investment Promotion Act are further incentives; they are conditional and not granted automatically.
How does company formation in Bulgaria work, step by step?
OzbekCPA runs incorporation together with its legal partner in Bulgaria, Leinonen Bulgaria: the document list is issued, the founding act and declarations are drafted with a Bulgarian lawyer, translations and attestations are arranged, the register application is filed through an authorised representative and the bank opening is accompanied. Company formation in Bulgaria is filed electronically or on paper; electronic filing needs a qualified electronic signature, which a foreign owner covers by giving the Bulgarian lawyer a power of attorney.
- Days 1–2Structure, name and activitiesShareholders, manager and signing powers are fixed; the name is screened in the commercial register and the company-type suffix is added. Activities are written into the founding act; licensed activities need a separate permit.
- Weeks 1–2Documents and apostilleAn individual shareholder provides a passport and a notarised, apostilled power of attorney; a corporate shareholder provides an apostilled registry extract, a resolution and an ownership chart. Sworn translation is done in Bulgaria; apostille takes 3–5 days and translation 1–2 days.
- Days 2–5Collection account and capitalA collection account is opened at a bank, the capital is paid in and the bank issues a capital certificate. For foreign owners the bank carries out an extra review; this is the least predictable step.
- 1 dayManager’s consent and declarationsThe manager’s consent and specimen signature are notarised (EUR 3–7); the non-compete, manager-requirements and accuracy declarations are signed.
- 1–3 working daysRegister entryThe application form is filed electronically with the commercial register; state fee EUR 28 (EUR 56 on paper). On entry a single company identification number is issued, which is also the tax number.
- Registration + 7 daysEmployer registration, bank and VAT assessmentIf staff will be hired, the employer is registered with the National Revenue Agency, an accountant is appointed and the collection account is converted into an operating account; VAT registration is assessed against the threshold and customer base.
An investor opening a branch instead of company formation in Bulgaria follows the same sequence; the difference is that all of the parent’s documents are submitted with apostille and translation and the obligations remain with the parent. According to the sources a branch is registered in about three days, in practice up to a month. A representative office is entered with the Bulgarian Chamber of Commerce and Industry.
Is a local partner, a local manager or a nominee director required?
No. Company formation in Bulgaria requires no Bulgarian shareholder, director or representative; a foreign owner may hold all of the company. A limited liability company has at least one manager, who must be an individual; no nationality or residence requirement appears to apply. A joint-stock company needs a board of at least three members.
The only requirement in company formation in Bulgaria is a registered address: the company has a head-office address in Bulgaria, written exactly as the administrative unit. For a rented address the registration officer may ask for the lease or the owner’s written consent. The manager is named in the founding act and entered in the register; they need not be an employee and serve under a management contract, paid or unpaid. Because most banks ask a foreign manager for a face-to-face meeting or a notarised power of attorney, a single trip to Sofia during incorporation shortens this stage.
A nominee director (a director on paper) is not a recognised institution in Bulgarian law: every registered manager carries liability for their office, the beneficial owner is declared separately under anti-money-laundering rules and banks ask who really decides. A nominee director also gives no answer to the question of where the company is actually managed from, which the shareholders’ home country will ask.
Capital, trade name and multiple activities
The minimum capital for company formation in Bulgaria is EUR 1 for a limited liability company (Commerce Act Article 117; the old amount was BGN 2), at least EUR 0.01 per share, and the shares must add up to the capital. Capital is paid into a bank collection account before registration and the bank certificate is attached to the application. EUR 1 is a legal floor; because banks and tenders consider very low capital weak, starting with an amount such as EUR 1,000–5,000 makes assessment easier. A joint-stock company needs EUR 25,000; branches and representative offices have no capital of their own.
In company formation in Bulgaria the trade name is chosen freely and carries the company-type suffix. The register checks for conflicts with existing names but not for trademarks, so the name is screened in advance against the register and trademark records. If the same name as the parent is wanted, a registered trademark certificate and the parent’s consent letter help.
For company formation in Bulgaria, activities are described in the register with national classification codes; no limit on the number of activities written into the founding act appears to apply, and there is no extra fee. Licensed activities (finance, health, education, transport, security) need permission from the competent authority before they start. The type of activity does not change the corporate tax rate; with a mixed activity profile, VAT liability is assessed from the start.
What does company formation in Bulgaria cost?
The figures below for company formation in Bulgaria are indicative first-year amounts for a single-shareholder investor choosing a limited liability company for company formation in Bulgaria (EUR). Official fees are low; the cost lies in the collection account, translation and apostille, legal preparation, the address and accounting. A service quotation defines the scope.
| Item | Amount (EUR) |
|---|---|
| Register state fee (electronic / paper) | 28 / 56 |
| Notary (manager’s consent and specimen signature) | 3–7 |
| Collection account (for a foreign individual) | 150–460 |
| Qualified electronic signature | 14–19 |
| Apostille and sworn translation (higher for a corporate shareholder) | by document count |
| Incorporation advice and legal preparation | service quotation |
| Minimum capital (stays with the company) | 1 (a meaningful amount advised) |
| Registered address (virtual office, annual) | 180–600 |
| Accounting and returns (annual, low volume) | 1,200–2,400 |
| VAT work (if registered, annual) | 360–960 |
| Annual accounts, register fee | ≈ 26 |
| Indicative first-year total (excluding staff) | ≈ 2,000–4,500 |
The employer cost of one minimum-wage employee is about EUR 737–742 a month; an accounting office runs payroll for EUR 20–40 per employee a month. For a branch or representative office, the difference is the apostille and translation of all parent documents.
Taxes, accounting and invoicing after incorporation
Corporate tax. Company formation in Bulgaria means a flat 10% rate, unchanged since 2007. Losses are carried forward five years and not back. Net financing costs are deductible up to 30% of tax EBITDA, with no limit up to EUR 3 million. A 25% extra deduction for research costs applies from 2026. The annual return is due by 30 June and the tax is paid the same day; companies with sales above EUR 1.53 million pay monthly advances, those between EUR 153,000 and that amount quarterly, while new companies and small sellers pay none.
Dividends and withholding tax. 5% is withheld on dividends and 10% on interest, royalties and technical services (installation, assembly, consulting, market research). The Turkey treaty gives 10%/15% on dividends and 10% on interest and royalties; on dividends the lower domestic rate of 5% applies. Treaty relief normally needs prior approval; a recipient with annual income from one Bulgarian payer up to EUR 255,645.94 can rely directly on a residence certificate and a beneficial-owner declaration.
VAT. 20% standard, 9% reduced. A company with annual sales above EUR 51,130 registers within seven days; below the threshold voluntary registration is possible and cannot be left for twelve months. Returns and ledgers are monthly, due by the 14th. For services bought from Turkey the place of supply is Bulgaria: the Bulgarian recipient self-assesses the 20% VAT, and a recipient that is not VAT registered must register for this.
Accounting. Bulgarian national accounting standards apply and books are double-entry. Annual accounts are published with the commercial register by 30 September. A statutory audit is required when two of the size criteria are exceeded (the threshold amounts are confirmed from current legislation); a joint-stock company is audited every year except in an inactive year.
Invoicing. In 2026 there is no mandatory domestic business-to-business e-invoicing; a paper or PDF invoice is valid. E-invoicing to public bodies has been mandatory since 2019. A draft, not yet law, provides for clearance e-invoicing through the national system from 2028. The electronic audit file (SAF-T) reaches only large enterprises in 2026; a newly formed small company comes into scope in 2029–2030.
- Registration + 7 days: employer registration (if staff), accountant
- Within 7 days of threshold: VAT registration
- 14th of each month: VAT return and ledgers
- 25th of each month: social security and income tax declarations and payments
- 30 June: annual corporate tax return and payment
- 30 September: accounts filed with the register
- On request: transfer pricing file (in an audit)
Tax differences in company formation in Bulgaria by branch or representative office: a branch pays 10% on its Bulgarian profit and the obligations stay with the parent; a representative office earns no income and so pays no corporate tax. Accounting and beneficial-owner obligations apply in all three structures.
Work permits and employer obligations
Employing people from outside the European Union is governed by the Labour Migration and Labour Mobility Act: the employer advertises the vacancy 15 days to 3 months in advance (labour market test), the Employment Agency gives its opinion and the Migration Directorate then issues the single permit for residence and work. The permit is tied to one employer, position and place; it is granted for up to 12 months at first, extendable to a maximum of three years, and the whole process takes three to six months.
After company formation in Bulgaria, workers from outside the European Union may not exceed 20% of average headcount (35% for small businesses). For highly qualified staff there is the Blue Card (1.5 times the average wage; no test or cap) and an intra-corporate transfer permit.
Company formation in Bulgaria gives the manager no automatic right of residence: for a foreign owner or manager who wants to live in Bulgaria and run the company, the Foreigners Act asks for at least 10 full-time Bulgarian employees; the alternative is for the manager to sign an employment contract with the company and obtain a single permit. Turkish citizens need a Schengen visa. Being entered as manager may not by itself require a permit; whether a management contract falls outside the permit rules is confirmed in writing with the Employment Agency.
For company formation in Bulgaria the employer burden is moderate: the employer pays about 18.9%–19.6% of gross salary in social security (pension 8.22%, supplementary pension 2.8%, sickness and maternity 2.1%, unemployment 0.6%, health 4.8%, accident 0.4%–1.1%), the employee pays 13.78%, and 10% income tax is withheld on the rest. For gross pay of EUR 2,000, net pay is about EUR 1,552 and total employer cost about EUR 2,380–2,390. The maximum insurable income is EUR 2,300 from 1 August 2026.
After company formation in Bulgaria, a written contract is signed before work starts and notified to the National Revenue Agency within three days; probation is at most six months, notice is generally 30 days and annual leave is at least 20 working days. When a foreign employee starts, the labour inspectorate is notified within seven days.
The home-country side: what decides the outcome
Bulgaria has double tax treaties with more than sixty countries, which matter in company formation in Bulgaria. A treaty allocates taxing rights; residence, controlled foreign company rules and the taxation of dividends are determined by the home country’s own legislation. Each point below depends on facts that should be settled before incorporation.
- Place of effective management. A Bulgarian company whose decisions are taken in another country is treated in many countries as resident there and taxed on worldwide income. A registered address and a virtual office do not answer this question; a real manager, decision records and an address in Bulgaria are the only defence.
- Two sides of the 10% rate. The flat 10% rate is an advantage in Bulgaria, but the minimum-tax condition of participation exemptions in the shareholders’ country is often a threshold such as 15%, which 10% does not meet. Controlled foreign company rules often use a threshold just below 10%; the Bulgarian rate sits exactly at it, and if an incentive lowers the effective burden the rule can apply. The choice should be made on the combined burden in both countries.
- Intra-group invoices. In company formation in Bulgaria, management and consulting invoices from the parent to its Bulgarian subsidiary meet 10% withholding and the transfer pricing file in Bulgaria, and the same invoice is reviewed in the parent’s country. The agreement should be designed for both sides together.
- Branch or company? A branch’s profit is the parent’s own income: participation exemptions in the shareholders’ country do not apply to a branch, while the 10% paid in Bulgaria is credited against the parent’s tax. In a limited liability company, the dividend exemption and controlled foreign company rules come into play.
- Treaty rate and residence certificate. For reduced withholding on interest and royalties paid from Bulgaria, the recipient’s residence certificate from its own country must be on file at the time of payment; on dividends the domestic 5% is lower than the treaty rates.
- Individual shareholders. In company formation in Bulgaria, dividend withholding in Bulgaria is generally credited in the shareholder’s own home-country return; being a manager or holding a short-term visa does not change residence in another country.
Frequently asked questions
Do I need to travel to Bulgaria for company formation?
Not for incorporation: documents are handed to a Bulgarian lawyer under an apostilled power of attorney and the register application is filed electronically. A bank may ask a foreign owner for a face-to-face meeting or a notarised power of attorney, so combining the account opening in one trip shortens the process.
Can a company be the shareholder instead of an individual in company formation in Bulgaria?
Yes. The parent’s registry extract, resolution and power of attorney are apostilled and translated into Bulgarian by a sworn translator; because Bulgaria is party to the Apostille Convention, no consular legalisation is needed. The resolution must state the formation in Bulgaria, the capital, the name and the representative; document preparation takes two to three weeks.
Is a Bulgarian partner or local manager required?
In no structure. A foreign owner may hold the whole company; the manager must be an individual and no residence requirement applies. The only requirement is a registered address in Bulgaria.
What is the minimum share capital?
EUR 1 for a limited liability company; the capital is paid into a bank collection account before registration and the bank certificate is attached to the application. Because banks and tenders consider very low capital weak, starting with an amount such as EUR 1,000–5,000 is advised. A joint-stock company needs EUR 25,000.
How long does the bank account take?
A collection account is opened before registration for the capital; after registration it is converted into an operating account. Opening takes two to five days and can take longer with foreign shareholders because the bank carries out a review. The collection account fee can be EUR 150–460 for a foreign individual.
Is a national e-invoicing system mandatory for issuing invoices?
In 2026 there is no mandatory domestic business-to-business e-invoicing; a paper or PDF invoice is valid. Only e-invoicing to public bodies is mandatory. A draft, not yet law, provides for clearance e-invoicing from 2028, and the electronic audit file starts in stages between 2026 and 2030 depending on company size.
Is an office required in Bulgaria?
Company formation in Bulgaria requires a registered address, not a physical office: a virtual office is accepted. For a rented address the registration officer may ask for the lease or the owner’s consent; addresses shared by many companies may draw tax authority scrutiny.
How does OzbekCPA support company formation in Bulgaria?
OzbekCPA runs the incorporation and bank stages together with its legal partner in Bulgaria, Leinonen Bulgaria, and takes on the following: modelling the effect of the 10% corporate tax and 5% withholding together with the tax result in the shareholders’ own country, preparing the shareholders’ documents and apostilles, structuring service and licence agreements with the parent under both countries’ rules, and assessing how the Bulgarian company is treated in the shareholders’ country. After incorporation, accounting, VAT, payroll and electronic filings are provided through the accounting team in Bulgaria.
OzbekCPA advises investors and companies worldwide on company formation in Bulgaria: choosing the structure and assessing the tax effect, apostille and translation of documents, designing intra-group agreements and assessing the structure in the shareholders’ own country. For a structure review based on your activity and customer base, contact us. Related articles on company formation in Bulgaria and home-country tax: Effective Management and Control · Foreign Participation Exemption: Presidential Decision 11257 · Transfer Pricing in Turkey.
