How to manage a company in Bulgaria
How to manage a company in Bulgaria
So, here are some of the more important things you should know in order to properly and effectively manage your company in Bulgaria.
After the registration
Company registration in Bulgaria is fairly easy but there are some things which you should keep in mind after the procedure is concluded.
Under EU law the company has to be registered as a data controller in a member state since it operates with private data — such of customers and employees. You can do this in Bulgaria for free and your registration will be valid for the whole EU. Our team can assist you with the necessary documents.
You should also be aware that the company manager must pay security contributions. They amount to around 150 BGN (75 euros) per month. In order to do this, the manager has to file a specific declaration at the National Revenue Agency — a declaration that signifies the moment when the company starts to operate.
A couple of things about taxes
When you register a company in Bulgaria it isn’t automatically a registered enterprise under the VAT act. If you want your company to charge VAT, you must first register it in the National revenue agency. Regardless of whether you want to do this or not, the company has to be registered if it imports or exports goods and services from and to other countries or once it reaches a commercial turnover of 50,000 BGN for a period of 12 months. Voluntary registration is also possible and the procedure can be concluded in 2 weeks.
Corporate income tax in Bulgaria is flat 10% and is paid on an annual basis if the company makes a profit for the calendar year. If you want to transfer the profit to you as an owner of the company you must also pay a capital gains tax of 5%.
Whether your company makes a profit or not is determined by the annual financial report which your company has to draft and file no later than 30 June of the next year. This is one of the reasons why you should hire an accountant but there are actually a lot more. Accounting services in Bulgaria are fairly cheap and monthly subscription will likely cost you around €50 per month.
The accountant will, of course, take care of the booking and taxes but will also deal with the security contributions for the manager and the employees if you want to hire someone to work for you. Hiring an accountant is a must.
Changes in the company
Sometimes you want to make certain changes in your company. Perhaps you want a new name or a different address or maybe you want to appoint a new manager. In Bulgaria, you can change literally every single thing about your company except for the UIC, which is issued by the Trade register upon registration.
In order for a change in the company to be made it should be recorded in the Trade register of Bulgaria. This action is what makes it official and it usually takes about one week.
Acquisition of real property
Under Bulgarian national law, foreign citizens are only allowed to purchase or otherwise obtain real property under certain conditions. However, no restrictions exist for companies owned by foreign citizens. This basically means that even if you are not legally able to purchase real property in Bulgaria on your own as an individual, you can still do this on behalf of your company.
Labor law and employment
First thing you should know about employment in Bulgaria is that the work day is commonly 8 hours, not including any breaks, meaning that the workweek is 40 hours.
You can hire employees for a definite or indefinite term. The most important thing you should know is that labor law in Bulgaria mostly protects the interest of the employee and is especially strict in terms of contract termination.
If you want to protect your brand in the country you should consider registering a trademark. The procedure for Bulgaria is really cheap and the state taxes amount to less than 300 euros in total. Of course, you can think big and register the trademark for the whole European union. Our team can assist you in both cases.
That’s it. Managing a company in Bulgaria is a simple job. Just make sure to always use the services of professionals when in doubt. If you still haven’t decided on incorporating your business in the country you should check the top 5 reasons to invest in Bulgaria.
This article was originally published on Medium.