YOUR BUSINESS OPPORTUNITIES IN BULGARIA
THE BULGARIAN CHAMBER OF COMMERCE AND INDUSTRY
YOUR PARTNER

Last update: 12.4.2005

Statutory Regulations

Guided by the striving for transition to a market economy and encouragement of foreign investments the Bulgarian Parliament passed a series of laws:

Certain aspects of the business activities of the foreign persons are legally regulated likewise in the Constitution of the Republic of Bulgaria, in the Council of Ministers' Decree No 233 of 2000, and in some other operative legal acts.
 

Privatization Processes

The foreign investors can participate in the privatization of:

The privatization method is set up by Decision of the Privatization Agency (in case of state property privatization) and by Decision of the Municipal Councils (in case of municipal property privatization).

Trade companies stocks that are state or municipal property can be sold through:

Private limited companies shares that are state or municipal property as well as separate units of trade companies property with more than 50% state or municipal share can be sold through:

The privatization of trade companies with more than 50% state ownership, which are of significance to the national security (according to a published list), is realized through a publicly announced tender. The privatization of these companies is announced by Decision of the Council of Ministers at a proposal of the Privatization Agency.

The terms and order of conducting public tenders, public competitions and centralized public tenders are set up by Ordinances of the Council of Ministers.

The competent authorities' decision on privatization is promulgated in the Official Gazette and in two national daily newspapers at least.


Principal Terms and Conditions for the Foreign Investors

Bulgaria has concluded bilateral agreements for the mutual protection of investments with various countries like Germany, France, Italy, China, USA and Finland; agreements for economic and trade cooperation with Italy, Germany and the United Kingdom.

Bulgaria has signed agreements for avoiding double taxation with 41 countries: Austria, Finland, Malta, the United Kingdom, France, Germany, Greece, Sweden, Denmark, Norway, China, Belgium, Spain, Japan, Switzerland, Indonesia, Italy, Luxembourg, Poland, the republic of Korea, the Netherlands, India, Zimbabwe, Russia, Armenia, Portugal, Turkey, Ukraine, Hungary, Romania, Belarus, Belgium, Spain, Kazakhstan, Croatia, Yugoslavia, Macedonia, the Czech Republic, etc.
 

Forms of Activity

Limited liability companies, general partnerships, joint stock companies, limited partnerships, holdings and cooperatives are legal entities.

Private merchants, branches and representations are not independent legal entities.

Branch offices may engage in economic activities; they have their own property and compile a separate balance sheet, if the branch is open by a foreign entity.

Representation offices may not engage in economic activities.
 

Authorized Fixed Capital

The minimum authorized capital levels for setting up companies are as follows:


Branch and representation office in Bulgaria

  1. A foreign person may register a branch or representation office in Bulgaria, provided that the foreign person may carry out business activities according to his own legislation. The branch should be registered at the respective regional Bulgarian Court. The trade representation should be registered at the Bulgarian Chamber of Commerce and Industry.


Foreign Persons' Rights of Ownership

Last update: 12.4.2005

  1. The companies with foreign participation that have registered in Bulgaria (notwithstanding the percentage of foreign participation in them), are entitled to acquire the ownership of buildings, lands and limited property rights on real estates (the right of use, building lease, the right of secondary building structures and easements).
  2. Till entry into force of the Agreement for accession of Bulgaria to the European Union the ownership of buildings and restricted ownership of immovable property may be acquired by a foreign entity provided that it:
  1. Upon entry into force of the Agreement for accession of Bulgaria to the European Union foreign physical and juridical persons may acquire ownership of land in Bulgaria under the provisions ensuing from the accession of Bulgaria or by virtue of an international agreement ratified by the country.
  2. Real estate rents in Bulgaria are freely negotiated between the parties.

 

Banking and Insurance

Last update: 12.4.2005

  1. Foreign persons may establish banks, on the basis of licenses issued by the Central Bank.

    The legal form in the field of banking is the public limited company.

    The minimum required bank capital is BGN 10 million, which, upon incorporation of the bank, should be in cash installments only.

    The shares issued by the bank are registered and each share gives the right to one vote. Without the written permission of the Central Bank, no shareholder is entitled to acquire shares, either directly or indirectly, these shares constituting ten and more percents of the shares with a right of vote.

    A foreign bank may register a branch in Bulgaria for conducting bank activities only after obtaining a license from the Bulgarian National Bank.

    For the registration of a trade representation of a foreign bank, the latter should submit to the Central Bank a copy of the registration act. The trade representation is not entitled to execute any bank transactions.

    The respective district court, according to the business seat of the bank (the branch), makes the registration after the respective permits issued by the Central Bank, have been submitted.

  2. There are no impediments for the participation of a foreign natural or legal person in the incorporation or acquisition of shares in a Bulgarian public limited insurance company. The possible legal forms for executing insurance activities are:

A foreign insurer, having obtained authorization for performing insurance activity in one or more EU countries, may enjoy certain rights in Bulgaria, set by the Insurance Act.

The minimal statutory capital for the public limited company or for a branch of a foreign insurance company is as follows:

Insurance companies can have only registered shares.

As of the moment of filling in the application for obtaining the insurance activity permit, the cash capital of the Bulgarian insurers and the deposit for the branch of a foreign insurer should be paid in full at the Bulgarian National Bank.

A foreign insurer can carry out insurance and re-insurance activity on the territory of Bulgaria upon a permission of the Financial Supervision Commission. The branch office has to be registered by the respective Bulgarian Court and the financial means of the branch in the country may not be less than the minimum amount of capital mentioned above with regards to the public limited companies. Manager of a branch of a foreign insurer may be a person who has a permanent address or permission for permanent residence in the country and meets certain requirements set by the Insurance Act.

The mutual insurance cooperative is incorporated by not less than 500 legally capable natural persons. The founders are obliged to be insured in the cooperative, as well as to make the first-year payment for the insurance chosen by them.

Employment and Social Security Relations

  1. Foreign persons can freely hire labor and contract labor remunerations.
  2. Employment relations between any partnership with foreign participation (as well as a branch or a representation office of a foreign person) and workers and employees who are foreign citizens shall be regulated freely by a contract of employment. The contract of employment is in writing and it should meet the formal requirements for maximum duration of the working hours, the minimum annual paid leave, the national minimum wage, the minimum period of notice of terminating the contract of employment.
  3. Any worker and employee who is a foreign citizen shall be compulsorily insured in compliance with the Bulgarian legislation.


Pricing of Goods in Bulgaria

In Bulgaria pricing is free and depends only on supply and demand. Exception to this rule is only a limited number of products of vital necessity which are monitored by the Government and have ceiling prices.
 

Taxation

Last update: 12.4.2005

  1. The corporate Tax is at the rate of 15 %.
  2. Dividends (when not distributed under the form of shares or stock) and income from share participation are taxed at 7%.
  3. The investment companies that have a licence for carrying out transactions in securities, under the Law on Public Offering of Securities, are not levied with Corporate Tax for the part of their profit resulting from jobbing.
  4. According to the Value Added Tax Law, the rate of VAT is 20%. VAT is not due for goods and services exported from Bulgaria.
  5. The Law on excise duties shall provide for the payment of excise duties for some goods, which are not staple commodities. Their rate is different for the different commodities.


Foreign Investment Preferences and Protection

Last update: 12.4.2005

  1. The provisions of the Law that have been effective at the moment of making the investment, should be applied for any foreign investment executed before the changes of the legislation setting up legal normative restrictions for the foreign investments.
  2. The bodies of the executive authority and the local self-government provide administrative service to investors within terms shorter than the ones envisaged in normative acts.
  3. According to amount investments fall into first class (investments over BGN 100 million), second class (investments from BGN 50 million up to BGN 100 million inclusive) and third class (investments from BGN 10 million up to BGN 50 million inclusive). An investor, possessing Certificate for First or Second Investment Class, has the right to receive from the Bulgarian Investment Agency individual administrative service before all central and territorial bodies of the executive power and the local self-government.
  4. At request on behalf of investor, having received First Class Certificate, the Bulgarian Investment Agency proposes to the competent authorities:
  5. At request on behalf of investor, having received First Class Certificate, the Council of Ministers can grant funds for technical infrastructure building, necessary for the implementation of the investment plan to the border of the estate; the granting of the funds, which are state aids, is performed upon permission on behalf of the Commission on Competition Protection under the State Aids Act.


The Bulgarian Chamber of Commerce and Industry

  1. The system of BCCI includes 27 regional chambers, which are the link between the Chamber and its members in the respective regions. Members of BCCI are 67 branch organizations.
  2. BCCI maintains contacts with approximately 200 Commercial Chambers all over the globe and takes part in the activities of 30 international, inter-governmental and non-governmental organizations. BCCI is a member of ICC /International Chamber of Commerce/ in Paris, the Association of the Balkan Chambers of Commerce, and affiliated member of the Eurochambres.

The Bureaux established with BCCI offer the following services

BCCI has shares in:

 

Specific activities of BCCI The Bulgarian Chamber of Commerce and Industry: