Companies in Bulgaria. Bulgaria is actively used as a platform for foreign trade activities in offshore operations. Bulgaria is a state located in the South-Eastern part of Europe, in the east it is washed by the Black Sea.
Since 2007, the country has been a member of the European Union, a little earlier, namely, since 2004 Bulgaria is a member of NATO, as well as a member of the UN, OSCE, BSEC, Council of Europe, and WTO.
The economy of Bulgaria is mainly based on such industries as tourism and services. In turn, agriculture is developing quite well. Recently, business activity in the Republic of Bulgaria has increased significantly. The number of active entrepreneurs in the country ranks among the leaders of other countries in Europe.
Top 10 advantages of registering a company in Bulgaria
- Bulgaria is one of the protected jurisdictions and has a high reputation;
- Developed economy and stable legislation;
- Increasing business relationships, including with offshore companies;
- A stable political and economic environment with an excellent business climate;
- There is no foreign exchange control;
- Preferential tax rates when certain conditions are met;
- There are several agreements on the avoidance of double taxation;
- Possibility of acquiring both a ready-made company and registration of a new company with your proposed name;
- Bulgaria has 6 free trade zones with the ability to move capital abroad (i.e. businessmen can make transactions without notifying local authorities about their activities);
- Availability of well-trained and qualified working personnel.
Companies in Bulgaria. Taxation of a Bulgarian company
The standard income tax rate is 10% (Income received by a Bulgarian company from investment instruments within the EU is taxed at 0). The VAT rate is 20%, levied on assets and services produced domestically. Exports of goods and services are not subject to value-added tax. Profits from financial services such as insurance and banking are also exempt from VAT. The company must be registered with the VAT collection department, whose turnover, during the year, exceeded 50,000 BGN.
Simultaneous opening of a bank account “VAT”, which will be used to pay value-added tax and refund payments. And it is also possible to exempt from taxes on profits from the sale of residential premises and cars, from the sale of securities, from interest received on deposits in local commercial banks, from lottery and gambling winnings, from profits from the sale of assets received by way of inheritance or gifts and other types stipulated by the local legislation of Bulgaria. The meeting of shareholders is held once a year, in any country in the world. Every year, a financial statement is submitted to the Commercial Register, and the balance may be negative.
Starting a business in Bulgaria for tax benefits
Bulgaria is not an offshore zone, it can rightfully be attributed to European offshores – a low-tax jurisdiction and all foreign companies registered in the republic are subject to taxation. That is, this is a jurisdiction that grants foreign investors the right to pay taxes on activities carried out outside the jurisdiction at a reduced rate.
Registered companies in Bulgaria are residents in the country of registration, they are required to register for tax accounting, keep accounting, submit reports and pay local taxes. But there are several advantages of registering companies in Bulgaria, which makes this jurisdiction very popular for entrepreneurs, and allows the country to successfully compete with well-known centers of international tax planning. One of the advantages of registering a company in Bulgaria is tax benefits. This is due to the existing and favorable tax regime that allows you to benefit from the registration of a company in the country.
Organizational and legal forms of a company in Bulgaria
Bulgarian legislation offers the possibility of registering various types of companies, among them:
- Branch of a foreign company;
- Limited partnership;
- Joint-stock company;
- Limited liability company;
- Holding companies;
- Joint venture
The most common among entrepreneurs is registration for conducting international business. A Private Limited Company (PLC) for the implementation of trade and investment projects. For greater confidentiality and security, it is possible to use a nominee service. In the case of using a nominee service, information about the real owner will not be available to third parties.
The Bulgarian state forms the most convenient and safe intermediary in the conduct of offshore business. The country’s authorities stimulate the inflow of foreign investment into the country’s economy.
Business owners who are focused on business modernization will receive a fair amount of investment incentives. Besides, the proposed business must adhere to the requirements of the Bulgarian legislation to enjoy preferential taxation.