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Merger and acquisition - M&A - activity in Sevlievo follows the same national legal framework that applies across Bulgaria, with some local practical steps tied to municipal and regional authorities. M&A transactions can involve transfers of shares or assets, mergers of companies, restructurings, or cross-border deals. Key stages include structuring the deal, conducting legal and financial due diligence, drafting and negotiating transaction documents, obtaining any required regulatory approvals, and completing registration and post-closing integration. For transactions involving real estate, employees, or regulated industries, there are extra local and sectoral requirements to consider.
Hiring a lawyer experienced in Bulgarian M&A is important for multiple reasons:
- Transaction structure and tax planning - deciding between a share deal and an asset deal, and advising on Bulgarian corporate tax, VAT, and local tax implications.
- Due diligence - assessing corporate records, contracts, liabilities, employee claims, property titles, permits, and any hidden risks.
- Negotiation and drafting - preparing heads of terms, share purchase agreements, asset purchase agreements, shareholders agreements, warranties, indemnities, escrow agreements, and other closing documents.
- Regulatory compliance - identifying whether the transaction triggers merger control review, sectorial approvals, public takeover rules, or competition filings.
- Employment and transfer of undertakings - ensuring compliance with the Labor Code and EU-derived protections that preserve employee rights on transfers.
- Real estate and permits - checking land ownership rules, municipal zoning and construction permits, and any restrictions on transfer of specific property types in Sevlievo or the Gabrovo region.
- Closing and registration - coordinating filings with the Commercial Register, tax authorities, and any sector regulators to ensure the transfer is legally effective.
Several Bulgarian laws and administrative regimes are central to M&A work in Sevlievo. Below are the main ones to understand:
- Commerce Act - governs company types, corporate procedures, mergers, demergers and changes to company structure. It sets out formalities for transferring shares and registering changes with the Commercial Register.
- Obligations and Contracts Act - regulates contractual relations, sale of assets, representations and warranties, and general principles of obligations applicable to transaction documents.
- Commercial Register and Register of Non-Profit Legal Entities - administered by the Registry Agency. All company changes - including mergers, share transfers where required, and amendments to articles of association - must be registered to be effective against third parties.
- Competition Protection Act - enforces merger control through the Commission for Protection of Competition. Certain concentrations must be notified if applicable thresholds are met, or otherwise risk sanctions and unwinding.
- Public Offering of Securities Act and Financial Supervision Commission rules - govern takeovers and mandatory offers for public companies and regulated securities markets.
- Labor Code - provides employee protections on transfer of undertakings, notice requirements and collective bargaining considerations that affect M&A timelines and liabilities.
- Tax legislation - corporate income tax, VAT and local taxes affect structuring, valuation and timing. Bulgaria’s corporate income tax rate is comparatively low - seek up to date tax advice for precise calculations.
- Real estate, environmental and planning laws - transfers of property, land-use changes, environmental permits and construction authorizations must be verified at municipal and regional levels. The Sevlievo municipality and Gabrovo regional authorities may have specific procedures.
- Foreign ownership rules - Bulgaria is an EU member state, so EU citizens and EU-based entities generally have the same rights as Bulgarian entities. Non-EU investors should check sector-specific restrictions and land ownership rules, and may use local vehicles where necessary.
In a share deal you buy the shares of the target company - you acquire the legal entity with its assets and liabilities. In an asset deal you buy specific assets and assume only agreed liabilities. Share deals are often simpler for retaining business continuity, but may carry hidden liabilities. Asset deals allow selective acquisition, but can require multiple consent and transfer formalities, including for real estate and contracts.
Not always. Notification is required when the concentration meets statutory thresholds under the Competition Protection Act. Whether thresholds apply depends on the turnover and market shares of the parties involved. If thresholds are met, the Commission for Protection of Competition must be notified and clearance obtained before closing.
Under Bulgarian law and EU rules on transfer of undertakings, employees typically transfer to the new employer on the same terms and with preserved rights. The buyer must recognize existing employment contracts, accrued rights and social payments. There are also consultation and information duties - failure to follow them can create liabilities.
Real estate stays with the legal owner. In a share deal the property remains owned by the company, so transfers are registered only if the company title changes. In an asset deal individual property titles must be transferred in the registry - this may require municipal permissions, updated deeds, and possibly clearance for agricultural land or other restricted categories.
Yes. Cross-border mergers and acquisitions can trigger additional rules - EU company law instruments, Bulgarian registration requirements, potential double taxation considerations, and sector-specific approvals. Notification to Bulgarian authorities and compliance with both Bulgarian and foreign law is essential.
Common requests include corporate documents, shareholder registers, financial statements, tax filings, employment records, commercial contracts, intellectual property registrations, real estate titles, licenses and permits, insurance policies, litigation records and environmental compliance documentation.
Timing depends on complexity. Small share deals can close in a few weeks if there is minimal due diligence and no regulatory approvals. Complex transactions with regulatory clearances, real estate transfers, labour consultations, or cross-border elements can take several months to a year. Early planning and clear timelines help manage expectations.
EU citizens and EU-established companies have broad rights to acquire property and companies in Bulgaria. Non-EU investors should check land ownership rules and sectoral restrictions. In some cases non-EU persons use Bulgarian entities to hold real estate - legal and tax advice is recommended to ensure compliance.
Buyers commonly negotiate warranties, indemnities, price adjustment mechanisms, escrow arrangements, and retention of part of the purchase price as security for potential claims. Warranty insurance is available in some transactions. Clear definitions of breaches and limitation periods are important.
Look for experience in Bulgarian M&A and relevant sectors, familiarity with local authorities and courts, language capabilities, clear billing practices and client references. For complex deals, a team that includes corporate, tax, labor and real estate specialists is often needed. Ask for an engagement letter that outlines scope, fees, timeline and confidentiality.
When seeking more information or formal filings, the following Bulgarian bodies and organizations are commonly involved in M&A matters - contact them through their official channels or consult a lawyer to interface with them:
- Registry Agency - for company registration and Commercial Register matters.
- Commission for Protection of Competition - for merger control and competition questions.
- Financial Supervision Commission - for public company takeovers and securities regulation.
- National Revenue Agency - for tax registrations, VAT and corporate tax matters.
- Municipality of Sevlievo and Gabrovo regional authorities - for local planning, real estate and municipal permit queries.
- Bulgarian Chamber of Commerce and Industry and local business associations - for market information and networking.
- Bulgarian Bar Association - for locating regulated lawyers and checking professional standing.
- Regional Environmental Inspectorate - for environmental permits and compliance if the business involves regulated activities.
If you need legal assistance with an M&A in Sevlievo, consider the following practical steps:
- Prepare an initial packet - gather basic company documents, recent financials, list of key contracts and a brief description of the target business.
- Arrange an initial consultation - contact a Bulgarian M&A lawyer to discuss goals, timelines and potential issues. Ask about their previous M&A experience and local knowledge.
- Agree the engagement terms - get a written engagement letter that defines scope, fees, confidentiality and deliverables.
- Conduct pre-deal planning - outline preferred deal structure, preliminary valuation concerns, and likely regulatory notifications.
- Perform due diligence - allow your legal team to review legal, tax, labour and environmental aspects and provide a risk report.
- Negotiate and sign transaction documents - use clear drafting to allocate risks, provide closing conditions, and set out post-closing obligations.
- Obtain approvals and register changes - file any required notifications with competition authorities, the Commercial Register and local offices; secure permits and clearances.
- Close the deal and integrate - complete payments, transfer titles and manage employee and operational integration with legal oversight to reduce post-closing disputes.
If you are unsure where to start, a short preliminary meeting with a local M&A lawyer or law firm is the most efficient way to map out the process specific to your transaction in Sevlievo. Lawyers can also liaise with municipal authorities and provide an action plan tailored to your industry and the scale of the deal.
