Best Investment & Business Structuring Lawyers in Bulgaria

1. About Investment & Business Structuring Law in Bulgaria

Investment and business structuring law in Bulgaria governs how companies are formed, reorganized, financed, and managed. It covers corporate forms, governance rules, cross-border transactions, mergers and acquisitions, and ongoing compliance. The framework is designed to facilitate investment while ensuring transparency and accountability.

For investors, this area includes choosing the right corporate form, structuring holding or SPV arrangements, and planning for taxes, securities, and regulatory obligations. It also encompasses due diligence, cross-border concerns within the EU, and ongoing compliance with anti-money laundering and beneficial ownership rules. Engaging a qualified legal counsel can streamline formation, restructure, and long-term governance.

2. Why You May Need a Lawyer

Setting up a Bulgarian subsidiary or holding company requires careful choice of corporate form (for example operating as an ООО with limited liability or a single-member EOOD) and alignment with local company law. A lawyer can draft and file the articles of association, register with the trade register, and set up governance documents that protect minority rights and facilitate future financing.

Executing an M&A or cross-border reorganization involves due diligence, corporate restructuring, and compliance with Bulgarian and EU rules. Lawyers coordinate with auditors, negotiate terms, and ensure that the share transfers, asset contributions, and corporate changes are properly documented and registered.

Raising capital or issuing shares requires precise shareholder resolutions, capitalization structures, and compliance with anti-dilution and pre-emption rights. A legal advisor helps draft the instruments and ensures timely regulatory filings to avoid delays or penalties.

Real estate investment through Bulgarian SPVs demands careful structuring to separate risk, manage currency flows, and comply with AML and beneficial ownership requirements. An attorney can advise on ownership chains, currency controls, and ongoing reporting obligations.

Compliance for regulated activities and licensing in Bulgaria may require sector-specific licenses. A lawyer can identify applicable regimes, prepare licensing applications, and align corporate structures to meet ongoing regulatory standards.

Converting from a sole proprietor to a corporate form (for liability protection and investment handling) involves tax planning, payroll, and corporate governance changes. A solicitor can map the conversion steps, manage filings, and minimize disruption to operations.

3. Local Laws Overview

Law on Commercial Companies (Закон за търговските дружества) governs formation, governance, capital requirements, and dissolution of Bulgarian companies such as ООО (OOD) and ЕООД (EOOD). It sets rules for shareholders, general meetings, and corporate capacity. This act is frequently amended to reflect EU and domestic priorities, so current text should be consulted for precise provisions.

Bulgarian corporate law is subject to periodic amendments to align with EU business standards and digital filing practices. World Bank Bulgaria investment and business environment overview

Corporate Income Tax Act (Закон за данъка върху доходите на юридическите лица) sets the rules for corporate taxation in Bulgaria. The standard corporate income tax rate is 10 percent for resident companies, with applicable deductions and treaty-based relief. The act provides the framework for tax bases, allowances, transfer pricing, and cross-border taxation issues that affect investment structuring.

VAT Act (Закон за данък върху добавената стойност) governs value added tax in Bulgaria. The standard rate is 20 percent, with certain goods and services subject to reduced rates or exemptions. VAT registration obligations apply to businesses exceeding threshold levels and to cross-border supplies within the EU, impacting pricing and cash flow in structuring decisions.

4. Frequently Asked Questions

What is the Law on Commercial Companies in Bulgaria?

The Law on Commercial Companies regulates formation, governance, and dissolution of Bulgarian companies such as OOD and EOOD. It covers share capital, management, shareholder rights, and general meetings. Always check the current text for recent amendments that affect control and reporting requirements.

How do I start a Bulgarian LLC as a foreign investor?

Begin by choosing the right form (OOD or EOOD), prepare articles of association, appoint a legal representative, and register with the Bulgarian Trade Register. You will need standard corporate documents, proof of address, and identification for shareholders. A local attorney can coordinate filings and ensure compliance with AML rules.

What is the corporate tax rate in Bulgaria for investment projects?

The standard Bulgarian corporate income tax rate is 10 percent. This rate applies to resident companies on their worldwide income, with reliefs under double taxation treaties. Tax planning should consider transfer pricing and cross-border allocation of profits.

How long does it take to register a company in Bulgaria?

Electronic filings can take about 1-2 weeks from submitting all documents, provided there are no missing items. Physical filings may take longer due to administrative checks. Processing times vary with the complexity of the structure and the completeness of documents.

Do I need a Bulgarian attorney to set up a local company?

While not mandatory, engaging a Bulgarian attorney or solicitor is highly advisable. A local lawyer helps with filings, governance documents, and ensuring compliance with local obligations, including AML and beneficial ownership rules. This reduces the risk of delays or penalties.

What is an Ultimate Beneficial Owner in Bulgarian law?

An Ultimate Beneficial Owner is a person who ultimately owns or controls a company through ownership or voting rights. Bulgarian authorities require disclosure of beneficial ownership in the corporate registry and ongoing reporting to ensure transparency. Compliance reduces risks of money laundering allegations.

How much does a typical Bulgarian company formation cost?

Costs vary by complexity and service provider, but expect government filing fees plus legal fees. A standard formation, including documentation, may range from a few hundred to a few thousand Bulgarian lev. A lawyer can provide a detailed estimate after reviewing your structure.

What is the difference between an OOD and an EOOD?

ООД is a Limited Liability Company with possibly multiple owners; ЕООД is a single-member LLC. Both protect owners' liability to the amount of their contributed capital, but governance and shareholding mechanics differ. An attorney can help choose the best form for your structure.

Can Bulgarian entities engage in cross-border M&A within the EU?

Yes, Bulgarian entities can participate in cross-border M&A under EU law. The structuring must respect Bulgarian corporate law as well as EU directives on company law and taxation. A Bulgarian legal advisor should coordinate the transaction to address local and cross-border requirements.

What steps should I take to ensure AML compliance in Bulgaria?

Identify your customer profiles, conduct beneficial ownership checks, and implement transaction monitoring. Bulgaria follows EU anti-money laundering standards, with reporting obligations to authorities. A lawyer can design and implement a compliant AML program for your structure.

5. Additional Resources

• World Bank - Bulgaria country profile - provides data on the business environment, governance, and investment indicators relevant to structuring decisions.
• OECD - Bulgaria Investment Policy - overview of investment climate, regulatory framework, and policy guidance for investors.
• U.S. Department of Commerce - Bulgaria Country Commercial Guide - practical information for foreign investors on market entry, regulatory considerations, and business practices.

6. Next Steps

1. Define your investment and restructuring goals clearly, including desired corporate forms and ownership structure.
2. Identify a Bulgarian attorney or law firm with demonstrated experience in corporate structuring and cross-border transactions.
3. Gather key documents: corporate documents, ownership details, tax registrations, and any licenses relevant to your sector.
4. Request a scope of work and fee estimate, including government filing fees and anticipated legal costs.
5. Schedule an initial consultation to discuss structure, timelines, and compliance requirements including AML and beneficial ownership.
6. Confirm engagement terms in a written letter of engagement, including deliverables, timelines, and communication channels.
7. Begin the process with a phased plan, starting with entity formation, governance framework, and then tax and regulatory optimization.