Features of doing business in Bulgaria

Thanks to the investment policy of the state, a transparent legislative system and a European standard of living, business in Bulgaria is of interest to many citizens of Europe and the CIS. Entrepreneurs with a minimum start-up capital dream of starting their own business and earning money on the territory of the Balkan Peninsula. However, in order to achieve this goal, you need to have a good knowledge of the banking sector in Bulgaria, tax rules and the mentality of the local population.

The main nuances of doing business in Bulgaria

A simple and understandable taxation system, currency stability and a favorable geographical position open up great opportunities for business in Bulgaria. Having on hand from 2000 euros, you can open your own restaurant, a consulting company or a company selling used cars in just a month.

If a foreign citizen has invested more than 250,000 euros in the economy, he is guaranteed to receive a residence permit in this country (Law "On Foreign Investments").

Private entrepreneurs are required to pay tax on income from commercial activities. The tax rate is the smallest among all EU countries and is only 10%. Corporate tax is also set at 10% and VAT at 20%. Therefore, it is not surprising that business in Bulgaria with minimal investment is very popular.

To clearly demonstrate how attractive Bulgaria is for doing business, let's analyze the ranking of European countries in terms of income tax. The rating is based on data provided by the statistical and fiscal authorities of these countries and Eurostat. Here are the maximum, average and minimum values.

It must be said that the potential of Bulgaria is simply huge! The tourism and construction business, the textile and chemical industries, and the transport industry are actively developing here. And the most attractive cities for citizens who want to organize a successful business in Bulgaria are Burgas and Varna.

Territorial and economic features of doing business in Bulgaria

The Valley of Roses, as Bulgaria is also called, is famous primarily for its resorts. In summer, lovers of warm water and bright sun come to the Black Sea coast, and in winter, when the air temperature drops to below zero, areas located near the ski slopes intercept the palm. Every year in the resort areas of Bulgaria new restaurants, hotels are opened, new places for a comfortable stay, amusement parks, beauty salons, offices of travel companies, aimed at both budget and wealthy tourists, appear. Such entrepreneurial activity is explained by the fact that the financial service and maintenance of the company in Bulgaria is quite inexpensive.

If we consider the more "deaf" areas of Bulgaria, then farms are very popular there. Importing vegetables and fruits grown in an ideal climate is a fairly profitable business. Of no small importance is the fact that all merchants whose turnover is less than 50,000 leva (about 25,000 euros) for the reporting period (year) are exempt from paying VAT.

How to organize a business in Bulgaria legally

The country's authorities have created fairly loyal conditions for doing business. Particularly impressive is the work of regulatory, judicial and executive authorities that protect entrepreneurs from unscrupulous competitors by pursuing a nationwide investment policy.

Few of the residents of the CIS who have decided to do business know exactly what to do in Bulgaria and what kind of business to open. Therefore, most of our fellow citizens are interested in how much money they need for this and what documents should be prepared. To answer these questions, it is necessary to consider in more detail the legislative norms relating to the organization of business.

Thus, the legislation of Bulgaria provides for several forms of ownership of enterprises (organizational-legal) allowed for establishment by foreigners:

• Collective society (collective friendship - SD). It is created, as a rule, by co-founders who are well acquainted with each other (from 2 people). Working relationships are regulated by the charter agreement. The founders bear the same responsibility for the obligations. The minimum amount of starting capital is not regulated by law.
• Joint-Stock Company (Joint-Stock Friendship - AD). The founders of AD can be both legal entities and individuals. To establish an AD, you need to have at least 50,000 leva (about 25,000 euros). Managed by the shareholders' meeting. The shareholder with the most shares has the most weight. Shares can be freely bought and sold.
• Limited society (commandite friendship - KD). It is created by the founders, who bear the same responsibility for obligations, and some are unlimited, while others are responsible only for the amount of their own contribution. The responsible co-founder has unlimited managerial rights.
• Limited company with shares (Commandite partnership with shares - KDA). It is formed by signing an agreement between the co-founders. An act-charter is necessarily created, which contains a description of the powers, information on the amount of capital, as well as the type and number of shares. The minimum capital to set up a company is BGN 50,000 (about EUR 25,000).
• Limited Liability Company (Friendship with Limited Excuses - OOD / EOOD). The most demanded form of activity, since the minimum amount of capital is 2 leva (about 1 euro). Co-founders, who are liable for obligations only with the amounts paid, do not have to participate in the management of the company. Minimal changes in constituent documents are registered in court.
• Private entrepreneur (Single-person trader - ET). By law, it is established by a foreigner with permanent residence status, or a citizen of Bulgaria. The amount of capital does not matter. ET is only liable for personal property. The name of the company must consist of the name and surname of the founder.

The founders of firms can be citizens of Bulgaria or other countries who have passed the procedure for registering an enterprise in the commercial register (by decision of the district court) or who have bought a ready-made business.

After registration in the register, you need to be registered with the statistical office, the pension service and the tax office. In addition, a bank account must be opened for financial and economic activities.

Bulgarian banking system: a brief overview

According to the Bulgarian People's Bank, there are currently 30 banks operating in Bulgaria, including 24 licensed banks and 6 branches of foreign banks. 73.3% of assets are controlled by international financial institutions, which indicates a favorable environment for doing business.

Now the banking system in Bulgaria is slowly recovering from the recession. According to the analytical department of Raiffeisen Bank International, economic growth remains weak, but the outlook is positive.

Bulgarian banks are willing to issue loans for up to 30 years and offer a wide range of business services.

What type of business is most attractive for CIS citizens in Bulgaria

As evidenced by the reviews of immigrants from the CIS, in Bulgaria you can "unwind" absolutely any idea and create a stable, highly profitable business. The main thing is to show a little imagination, attract qualified consultants, invest money correctly and take into account the needs of potential customers.

The similarity of the Slavic mentality, as well as the absence of a language barrier, greatly simplifies doing business. In Bulgaria, the Cyrillic alphabet is used, so all the inscriptions are applied in the usual Russian letters. Quite often there are signs in Russian, because the lion's share of local residents and tourists understand Russian.

Market research will help you choose the right business niche. Until the 2000s, CIS citizens sought to open their own cafe, beauty salon or family hotel on the Balkan Peninsula, usually focusing on the needs of vacationers. However, over time, companies engaged in real estate, consulting and other types of business have become more popular.

Often, immigrants from the CIS open bakeries, provide logistics services, perform repairs and decoration of apartments, develop and maintain websites. Quite often, the owners of shops, car services, dental clinics and kindergartens in Bulgaria are our compatriots.

Now many entrepreneurs are striving to open a company in Bulgaria to buy a car, because this type of business requires practically no costs, but it brings solid benefits. As you know, in Bulgaria you can buy a good used car for several thousand euros (almost three to four times cheaper than in Western Europe). Therefore, the scheme, according to which a car is bought for a Bulgarian company, and then this vehicle is operated on the territory of another state (by proxy), has become very popular.

As practice shows, registration of a company in Bulgaria by a citizen of Ukraine, Russia, Belarus or a native of another CIS country takes up to a month. If a competent employee handles paperwork and other organizational issues, you just need to present a foreign passport and deposit funds into the company's account (authorized capital).

The number of co-founders of the company is not limited by law (there may be 15, or 35, or even more), and dishonest intermediaries take advantage of this. At the same time, all co-founders receive the legal right to drive a vehicle that is the property of the company. Therefore, becoming a co-founder of a Bulgarian company is unprofitable, because when you try to sell a car, you will need to gather all the owners and obtain official permission to carry out a sale and purchase transaction. And collecting all the signatures is often simply not impossible.

How to register a business in Bulgaria

According to statistics, investments in Bulgaria in 2019 should exceed the figures for investments in 2018. And all because the attractiveness of the region is growing, the financial opportunities of citizens are increasing, and an active propaganda policy is being carried out aimed at increasing the inflow of foreign capital.

In order to quickly and without unnecessary hassle to create their own company, some citizens use the services of legal organizations. However, there are people who seek to open a company in Bulgaria on their own. And in part they are doing the right thing, taking the situation into their own hands.

To open a company on your own, it is enough to study the legal aspects of this issue and follow the instructions developed by experienced specialists:

• first, you need to come up with and register a unique name;
• secondly, to choose a suitable organizational and legal form of doing business, in order to simplify its process and taxation later.
• thirdly, get a legal address, register a company in all instances, choose seals and stamps, open a bank account.

The process of organizing a business abroad is quite long and tiring, so if you are too busy or just want to get rid of unnecessary troubles and worries, it is better to use the services of specialists who, for a small fee, will help you register a new company, buy or sell a ready-made business.

Buying and selling a business in Bulgaria: pros and cons

Sometimes it is much more profitable to acquire a ready-made business in Bulgaria than to create your own company from scratch. After all, an already established mechanism is much easier to keep afloat than to experiment every day, trying to win a certain market share.

The company must be chosen carefully and slowly, since the price of a ready-made business varies quite seriously and depends on the field of activity. So, for example, a small shop will cost about 20,000 euros, a villa in a resort - 70,000 euros, and a modest bar - 50,000 euros.

Of course, the sale of a business in Bulgaria is fraught with many "pitfalls" - for example, if the owner significantly underestimates the value of the company. In this case, you need to analyze the business reputation of the company, check for debts, and also read the recently adopted laws - perhaps this type of business has been banned or artificial restrictions have been created for it by the state.

Experts recommend acquiring young promising companies that were created specifically for resale. Heads or managers of such companies often provide legal, financial and advisory support, helping Ukrainians, Russians, Belarusians to buy a business in Bulgaria at an affordable price.

Features of obtaining a business visa

To carry out commercial activities in the territory of another country, you will need to apply for a business visa by submitting a full package of documents to the embassy, ​​the main of which is an invitation from a foreign organization or business partner.

It should be clearly understood that business visas are single, double and multiple (multivisas). Documents for obtaining a visa can be submitted personally by the applicant, the applicant's authorized representative (if there is a power of attorney on company letterhead) and a third person who has received the right to officially represent the interests of the applicant.

A business visa allows you to stay in Bulgaria for up to 90 days (every 6 months), so it cannot be considered as one of the options to enter the country for permanent residence.

What documents are needed to obtain a visa

In order to enter the territory of Bulgaria, it is necessary to obtain a visa. To do this, it is necessary to prepare documents in Russian or Bulgarian in advance in order to subsequently submit them for consideration to the responsible person.

Be sure that obtaining a visa will give you only positive emotions if you submit the full package of documents indicated on the consulate website, namely:

• a completed visa application form (surname and name - as in the passport);
• copies of purchased tickets, hotel reservations;
• 1 color photograph 35x45 mm, fingerprints;
• original passport and a copy of the first page;
• an invitation from a business partner (issued in accordance with all the rules);
• medical insurance covering costs in the amount of 30,000 euros;
• documents confirming the availability of funds (certificate of employment, bank statement, etc.).

Business in Bulgaria with a residence permit

If you are planning a trip to Bulgaria for a long time in order to obtain a residence permit and organize a business without any restrictions, it is better for you to apply for a category “D” visa. In this case, you can independently register a company and do what you love without resorting to the services of intermediaries. Remember: a residence permit is issued within a month and is valid for exactly 1 year (extension for a similar period is possible).

To feel comfortable in a foreign land, it is better to buy an apartment or a villa in this country, but for this you need to know the specifics of the legal registration of a guest house in Bulgaria. By law, foreigners can freely acquire any real estate without land (for example, apartments, apartments), however, in order to obtain ownership of a private house with a land plot, mandatory registration of a legal entity is required. You already know exactly how to do this by carefully reading our article and drawing the appropriate conclusions.

Residence permit in Bulgaria. Obtaining a residence permit in Bulgaria: Video