Bulgarian legislation provides for the establishment of enterprises or companies with foreign investment. These must take the form of any of the business organizations stipulated in the Commercial Code. There are no limitations as far as the share participation of foreign persons is concerned and so is the extend of their investments and nature.Under the Commercial Code, the following forms of business organizations are open to foreign investors:
- • private limited company
- • single-owner private limited liability company
- • public limited company
- • general partnership (unlimited partnership)
- • limited partnership
- • public limited partnership• sole trader
Foreign legal entities registered abroad, as well as foreign natural persons and entities which are not legal persons, may register branches if they have been registered as merchants in accordance with the legislation of their countries. A branch is a part of the main company, but with a different seat. It is entered into the commercial register of the court at its location. A branch keeps account books as an independent company. A branch of a foreign company prepares a balance sheet. No authorized capital is needed for its opening. Foreign nationals and companies can register a branch provided they are registered abroad and are entitled to engage in business activities under the national law.
Representative offices are regulated by the Act on Encouragement of Investments. Foreign persons entitled to engage in business activities under their national legislation may set up representative offices, which are registered at the Bulgarian Chamber of Commerce and Industry. The representative offices are not legal persons and may not engage in economic activities. They may only engage in activities related to marketing, finding clients, establishing contacts within the country, as well as any other activities, which are not considered as economic or commercial by virtue of the Law.
Joint venture is a company formed jointly by a Bulgarian and a foreign partner. The size of foreign participation in a joint venture is not limited. Joint ventures must take one of the forms of business entities pursuant to the Bulgarian Commercial Code.
As a rule, no prior permits from government institutions are required to set up a company and like the Bulgarian entrepreneurs, foreign investors have to register their activities with:
- Local Tax Administration Offices for taxation purposes.
- Local Social Security Offices, if foreign investors have employees on their pay-roll.
- National Institute on Statistics under the registration system BULSTAT for statistical purposes.
- Customs Authorities when foreign trade operations are performed.
