How to open your own business in Bulgaria

Business in Bulgaria can become one of the grounds for immigration. Many rely on the republic's belonging to the European Union, a close linguistic environment and an understandable mentality of the Bulgarians, while others consider this to be the best option for a stable income and earnings for immigrants.

Benefits of doing business in the Republic of Bulgaria

Every year more and more Russian-speaking entrepreneurs strive to find their niche on the economic map of Bulgaria. Someone wants to establish their own company, while someone intends to buy a ready-made business or open a sales office in Bulgaria.

There are several reasons for moving based on business migration:

• territorial proximity;
• understandable mentality and general language environment;
• state interest in investors;
• belonging of Bulgaria to the European Union;
• the ability to sell goods and services to other European countries under a free trade agreement;
• high probability of the country's entry into the Schengen area;
• democratic taxes;
• development of the local economy, which provides a wide range of areas for business.

Business in Bulgaria for Russians can be aimed at compatriots. But those who do not intend to limit themselves to mainstream retail can get the most out of these factors.

Choosing a direction

Finding a job in a new country is sometimes quite difficult. Therefore, many migrants who have some supply of funds tend to start their own small business, which can provide a steady income.

The key rule when choosing a field of activity can be formulated as follows: it is better to do something in which you already have experience. So, here are some examples of what kind of business a Russian can open in Bulgaria:

1. Repair and decoration of apartments. Today the market is filled with large companies that provide services to the same large customers. But there is practically no one to do the finishing work in the apartments of ordinary citizens. For this reason, there is a steady demand for wall painting, electrical and plumbing replacement, furniture installation and other household work.
2. Beauty salons, nail service, hairdressing services. A master with good experience can start making money at home. Residents of Bulgaria pay attention to their appearance no less than the fair sex in other countries. The main thing is to gain clients, and then you can go to a larger level.
3. Those who are planning a business in Sofia may consider the option of a computer and office equipment repair company. The Bulgarian capital is the country's business center. There are many offices and business centers here, but there are not enough of those who are ready to service office equipment.
4. Catering business. But it should be remembered that it would be a big mistake to focus the institution exclusively on Russian-speaking migrants. It is better to think over the concept in advance in order to satisfy the needs of a wider mass of the population than a small number of your compatriots. The restaurant business in Bulgaria will only generate income if it is located in a good location (look for locations that do not depend on the tourist season).
5. Car service. The country has a large number of used cars that need maintenance. With certain knowledge and skills in this area, you can establish a stable business.
6. Private kindergarten. The problem of organizing the time of preschoolers is acute in almost every country in Europe. Those with specialized education and suitable real estate should consider this type of income.
7. A clothing store is another option for what kind of business you can do in Bulgaria. The advantage will be the proximity of Turkey, which could become the main supplier of products.
8. Transport logistics. There is a great demand for transportation services in Bulgaria. It is important that we have at our disposal vans that can deliver products to shops, cafes and restaurants.
9. Cars sale. Those who drove cars from Europe at home can continue to do so here. The purchase of vehicles, even used ones, but in good condition, is a topical issue for Bulgarians. Opening a company in Bulgaria for the purchase of a car from the EU by the local population can be a profitable business.

You need to be extremely careful with the tourism sector. If you plan to open a small hotel, it is worth remembering that, most likely, you will have to buy an already finished building. And the cost of real estate in resort areas is not so low. Even with the most modest scale, such a project will begin to pay for itself in at least 10 years.

Farming and farming also require careful analysis and planning. After integration into the EU, some quotas for the import of products from Bulgaria were limited; difficulties with sales markets are possible.

Choosing an organizational form

Let's say you decide to open a cafe in Bulgaria or a souvenir shop. The next thing to do is to determine what organizational and legal form your company will have. Each of them is briefly discussed in the table:

Company organization form	Description	A responsibility	The size of the authorized capital
ET or "Sole trader" - a private trader	Almost completely corresponds to Russian individual entrepreneurship. The name of the subject coincides with the surname of the owner, who is the sole founder.	Full	Not regulated
SL or Choice Fellowship "- full partnership	The founders are at least 2 people.	Full	2 leva / 1 euro
AD or "A corporation" in Bulgaria - joint stock company	The founders can be non-residents.	As part of the property of a joint stock company.	50 thousand leva / 25,570 euros
KD or "Commandite friendship" - limited partnership	The founder and manager is one shareholder (commander), who attracts other entrepreneurs (limited partners) to the business.	For the commander - full responsibility, for the rest - limited.	Not regulated
KDA or "Commandite partnership with shares" - an analogue of LLC in Bulgaria).	The founder is one chief commander, who is also the manager of the company. The board also includes 3 shareholders.	For the main shareholder - full, for the rest - partial.	50 thousand leva / 25,570 euros. Half of them are deposited immediately.
EOOD or OOD - "Single-handed friendship with limited excuse" - limited liability company.	The main requirement is the creation of 10 jobs for the citizens of the country.	As part of company ownership.	2 leva / 1 euro.

In addition, a foreigner can open a branch of a foreign company in Bulgaria.

Let's pay attention to the following points:

• a foreign person who has received permanent residence can register as ET. He will have to pay 10% of the firm's income.
• limited partnerships are more suitable for the family business of Bulgarian citizens.
• for foreigners, the most suitable options are AD and EOOD in Bulgaria, since the founders in this case can apply for permanent residence status.

How to open a business for a foreigner

Registration of a company in Bulgaria is a simple procedure. It can be carried out directly by the owner or by an intermediary firm offering to do it on a turnkey basis. It makes sense to resort to her services for those who do not speak Bulgarian and are not strong in local legislation.

The Bulgarian company legislation provides for the following procedure:

1. Creation of the name of the company. A complete list of already operating enterprises is contained in the Trade Register of the Republic.It is important that there are no repetitions and that the name sounds euphonious in Bulgarian.
2. Clarification of the complete list of founders and their share in the business.
3. Formation of capital for the creation of a company (its amount is indicated in the table above).
4. Determination of the legal address. Most often, this is the residence of the main founder.
5. Coordination of the list of activities that the enterprise will be engaged in. Here you need to list all the directions. Clarify if they require a license.

At this stage, the preparatory stage of how to open a company in Bulgaria for Russians ends. You can go to the main part of the process:

1. Open a savings account in a Bulgarian bank and deposit funds from the authorized capital into it. It is advisable to keep the receipt of payment.
2. Pay the duty of the Trade Register, in which the company is to be registered.
3. With a receipt for the paid contribution, you must visit one of the branches of this organization (available in all major cities) and fill out the A4 form - an application for registering a company.

Based on the application, the company is assigned an identification number - EIC. The Trade Register will then issue a certificate. The process ends with the issue of a seal and the opening of a current account.

Documents and issue price

Registration of a company in Bulgaria involves the preparation of the following package of papers:

1. Declaration, which must indicate the name and surname of the applicant, his citizenship, place and date of birth, data of the foreign passport, address of residence.
2. Declaration that the founder of the company was not in a state of bankruptcy and did not take part in suspicious transactions with petroleum products.
3. Confirmation that the founder has read Art. 142 of the Law "On Trade", which states that all decisions are made by the head only with the consent of the society.
4. The company's charter in duplicate.
5. Agreement with the head of the company.
6. Decryption from the bank account to which the funds of the authorized capital were deposited.
7. The owner's decision to establish a company.
8. A card with a sample signature of the founder.

The last document must be notarized.

The cost of starting a company in Bulgaria includes the following fees:

• name registration - 25-50 levs (13-26 euros);
• opening a bank account - 10 levs (5 euros);
• Commercial register fee - 110 levs (56 euros) when submitting a paper application and 55 levs (28 euros) when sending an electronic request;
• fee for issuing a certificate of the current state of the company - 7 levs (4 euros).

Acquisition of a ready-made business

Instead of starting their own business, some are considering the option of buying a ready-made business in Bulgaria. The prices for such an acquisition may seem quite acceptable to many:

• a small cafe in the capital - about 70 thousand euros;
• dairy production plant - almost 2.5 million euros;
• medium-sized hotel - 600 thousand euros.

A purchase of 600 thousand euros or more provides an entrepreneur not only with a permanent income, but also an opportunity to obtain a residence permit in a simplified manner. But there are two points here. First, not all businessmen have that kind of money. Secondly, why is a profitable object put up for sale?

Before buying a restaurant in Bulgaria or any other enterprise, you need to find out the financial condition of the business, the reasons why it is being sold, as well as its demand in the local and European market.

Bulgarian banks

Today, according to the National Bank of Bulgaria, there are 30 banking institutions in the country. Of these, 24 banks are licensed structures, another 6 are branches of foreign banks.

On average, 73.3% of all assets are controlled by international financial institutions. This confirms once again that doing business in Bulgaria is a safe event due to the comfortable economic environment. In addition, the sale of a business in Bulgaria to foreigners today is also possible on credit.

The banking sector in the country is gradually recovering from a long recession. According to the research results of the analytical department of Raiffeisen Bank International, the growth of economic indicators is still weak, but positive changes are obvious. Banks in Bulgaria are currently lending for 30 years and offer various service programs for entrepreneurs.

What you need to know about doing business in Bulgaria

Bulgarian legislation is in line with European standards and is aimed at protecting entrepreneurs and investors. Those who wish can start their activities by receiving special education in one of the country's business schools.

Intending to launch a business project, it is necessary to take into account the peculiarities of the local mentality:

• punctuality - Bulgarians are very demanding on timely arrival at a meeting; if you feel that you are late, it is better to call back and reschedule it;
• dress code - in this respect Bulgaria is hardly different from other European countries. Preference is given to business clothes in dark shades;
• language - most negotiations are conducted in Bulgarian. Many local residents speak Romanian and Turkish, the generation over 40 speaks Russian, the younger generation of entrepreneurs actively uses English;
• non-verbal communication - it should be remembered that moving the head up and down here means "no", and to the sides - "yes".

Conditions for investing in the Bulgarian economy

In 2009 the Bulgarian government made some changes to the Law on Foreign Citizens. They touched upon the types of investments that need to be made in order to obtain a residence permit, permanent residence, and Bulgarian citizenship.

To obtain a legal status, you must:

• purchase shares of a Bulgarian company;
• buy municipal or government bonds with at least 50% participation of the state or municipality;
• become the owner of the Bulgarian intellectual property;
• invest money in investment portfolios in credit institutions for a period of 5 years or more.

The new amendments to the law not only expanded the list of investments, but also increased their minimum threshold from 350 thousand euros to 1 million leva (511 298 euros). In case of purchasing shares of Bulgarian companies, the investment must reach 6 million leva (3,067,788 euros).

The innovations have canceled the mandatory stay in the country for investors and their family members for six months. Obtaining permanent residence and the obligation to live in the Bulgarian territory are no longer interconnected without fail.

Tax

The tax policy of the Republic of Bulgaria is attractive and one of the most loyal in Europe. Bulgaria has signed a double tax exemption agreement with more than 60 world powers.

In 2021, tax rates look like this:

• corporate income tax - 10%. For those who operate in regions with an unemployment rate of 35%, the state provides tax incentives, sometimes up to 100%. Farmers and companies employing people with disabilities can get help.
• VAT - 20%. Some businesses are subject to a 9% rate. These include, for example, hotels and hostels. Firms working in the field of international transport and those that export goods outside the European Union receive full exemption from VAT.
• Income tax is 10%.
• The tax on the received dividends is 5%.

Outcomes

Doing business in Bulgaria means access to the European market and the opportunity to work under one of the most loyal tax systems in Europe. You need to start by choosing a field of activity and business form, registering a company in the Trade Register. Investors in Bulgarian companies are provided with a preferential legalization procedure when investing capital in the local economy in the amount of 500 thousand euros or more.