Setting up a Company in Bulgaria: Step-by-Step Guide, Requirements & Costs

1. Introduction: Why Choose Bulgaria for Your New Business?

Setting up a new business is an exciting venture that requires not only a great idea but also the right jurisdiction. In recent years, Bulgaria has emerged as one of the most attractive destinations in the European Union for company registration. The country offers an extremely favorable tax environment, low operating costs, and a fast administrative procedure.

The main advantages of Bulgaria include:

• Flat Corporate Tax: Just 10% on corporate profits, which is one of the lowest rates in the entire European Union.
• Low Share Capital: The ability to establish a private limited liability company (LTD/OOD) with a share capital starting from only 1 EUR.
• Fast Incorporation: The Commercial Register processes applications within 24 hours.
• EU Market Access: As an EU member state, Bulgarian companies enjoy free trade of goods and services throughout the European single market.

In this guide, we will walk you through the company registration process in Bulgaria step-by-step, the requirements for foreign and local entrepreneurs, banking setup, and accounting duties for 2026.

2. Choosing the Legal Form: EOOD, OOD, or AD

The first step in setting up a business is choosing the appropriate legal structure. Bulgarian commercial law offers several options, but the most popular for small and medium-sized enterprises are:

1. Single-Owner Limited Liability Company (EOOD): Suitable when all shares are owned by a single individual or corporate entity. The owner’s liability is limited to the registered capital, protecting personal assets.
2. Limited Liability Company (OOD): Chosen when there are two or more shareholders (individuals or corporate entities). Relations between them are governed by the Articles of Association.
3. Joint-Stock Company (AD): Suitable for large-scale projects requiring public investment. The minimum share capital is 25,000 EUR.

For foreign investors, registering an EOOD or OOD is the cheapest and easiest option, and no residence permit is required to own or manage the company.

3. Step-by-Step Registration Procedure

Once you have selected a legal structure and a unique company name (verified through the Commercial Register database), the incorporation process involves the following steps:

Step 1: Preparing the Documentation

This includes the Articles of Association (or Foundation Act), a resolution appointing the manager, declarations under Articles 141 and 142 of the Bulgarian Commercial Act, a declaration of truthfulness, and a specimen of the manager’s signature.

Step 2: Notarizing the Documents

Some documents (specifically the specimen of signature and power of attorney) require notarization. This can be completed in two ways:

• In Bulgaria: The fastest and cheapest option. The manager visits a local notary public in person. The procedure takes less than an hour.
• Abroad: Documents can be notarized at a Bulgarian embassy/consulate or by a foreign notary. In the case of a foreign notary, documents must be translated and legalized (usually with an Apostille, depending on the country), which increases the time and costs.

Step 3: Opening an Escrow (Capital) Bank Account

It is mandatory to open a special escrow bank account in Bulgaria to deposit the initial share capital (minimum 1 EUR). Once incorporation is complete, this account is closed, and the capital is transferred to the company’s current account.

Step 4: Filing with the Commercial Register

The application is filed electronically using an electronic signature by a lawyer or the manager. The state filing fee for online submissions is half the cost of paper filings, and registration is usually completed within 24 hours.

4. Tax Address and Virtual Office

Every Bulgarian company must have an official registered office and address of management in the country. This address is registered with the Commercial Register and is used for official correspondence with state authorities, including the National Revenue Agency (NRA).

For foreign entrepreneurs without a physical office in Bulgaria, a “virtual office” (registered address) service is highly recommended. It provides a legal address for tax administration, mail handling, and assistance during tax audits, which is critical for VAT registration purposes.

5. Opening a Corporate Current Bank Account

After the company is registered, the manager must open a current account for the new company. This account is essential for daily transactions—receiving customer payments, paying suppliers, salaries, and taxes.

We can assist you in opening the bank account remotely via a Power of Attorney, without the need to travel to Bulgaria. We maintain established relationships with leading Bulgarian banks for remote account setup.

6. VAT Registration

VAT registration in Bulgaria can be voluntary or mandatory:

• Voluntary Registration: Highly recommended if you plan to trade with other EU countries (B2B transactions) or wish to claim VAT refunds on purchases from day one. The registration process takes up to 14 days.
• Mandatory Registration: Required when taxable turnover reaches 51,129.19 EUR within 12 consecutive months, or when receiving or providing services to EU clients (Article 97a of the VATA).

7. Accounting Services and Key Deadlines

Every registered Bulgarian company must maintain proper books in compliance with the Accountancy Act. The deadlines for filing and tax compliance in 2026 are:

• Monthly VAT Returns: Filed by the 14th day of the following month.
• Annual Tax Closing: The annual corporate tax return (under Article 92 of the CITA) must be filed and the 10% corporate tax paid by June 30th of the following year.
• Filing Annual Financial Reports: The Annual Financial Statements (GFO) must be published in the Commercial Register by September 30th of the following year.

8. Frequently Asked Questions (FAQ)

Q1: Does a foreigner need a residence permit to register a company in Bulgaria?
No, foreign citizens (both EU and non-EU nationals) can freely own shares and act as managers of Bulgarian companies without visas or residence permits.

Q2: How long does the incorporation process take?
Preparing the documents takes 2-3 days. The registration in the Commercial Register itself is completed within 24 hours of submission.

Q3: What is the minimum capital required to set up an LTD?
The minimum capital required by law is 1 EUR. However, we recommend depositing a slightly higher capital (such as 50-100 EUR) to cover initial bank setup fees.

Q4: Can incorporation be done completely remotely?
Yes. The specimen of signature can be notarized at a Bulgarian consulate or by a local notary public in your home country, after which you mail us the documents. We handle the registration and bank setup via a Power of Attorney.

Q5: What is a virtual office, and when is it needed?
A virtual office provides an official business address for your company to receive correspondence. It is essential for foreigners without a physical address in Bulgaria and ensures a smooth VAT registration process.

Q6: What is the dividend tax in Bulgaria?
The dividend tax rate is only 5%, which is one of the lowest in Europe, and is distributed after paying the 10% corporate income tax.

Q7: Does the company need to hire staff immediately after incorporation?
No. The company can exist without active employees. However, once business activities begin, the manager must pay social security contributions either as a self-employed person or under a management contract.

Q8: What are the penalties for missing the annual financial report deadline?
Penalties for failing to submit the Annual Financial Statements (GFO) by September 30th start at 102.26 EUR for the company and 102.26 EUR for the manager personally, increasing for repeated violations.

9. Conclusion

Registering a company in Bulgaria offers quick access to EU markets with minimal tax and operating costs. Despite the straightforward procedure, every detail—from bank selection to VAT documentation—matters for the future stability of your business.

Our accounting firm offers complete support: document preparation, assistance with opening bank accounts, providing a virtual address, VAT registration, and ongoing monthly accounting services. Contact us today to start your business in Bulgaria securely and efficiently.