3. Establishment of a Company
The procedure for incorporation of a company in Bulgaria does not differ when local or foreign persons participate in its establishment. Under Bulgarian law there are no restrictions as to the size of the foreign participation in the capital of a Bulgarian company and, therefore, up to 100% of the registered capital of a local company can be held by foreign persons.
As of 1 January 2008 all types of commercial companies and all branches of foreign commercial companies are incorporated by way of registration in the Commercial Register administered by the Registry Agency with the Ministry of Justice. This is a one-stop shop registration upon which the registered company obtains a unified identification code which serves for all commercial, tax, social security, statistics and other public purposes. The company is identified by the said code throughout its entire existence. No other secondary registration is required from newly incorporated companies and branches to start effectively performing their business activity.
The requirements for the registration of each particular type of commercial company or branch are set forth in the Commerce Act. The registration procedure itself and the documents required for such registration are set forth in the Commercial Register Act and the secondary legislation in implementation thereof. The registration procedure varies depending on the type of company that is to be registered, whereas for example, currently registration of a JSC (as well as an LLC) takes approximately up to five business days as of filing the relevant documents, registration of a branch of a foreign company takes about two weeks, etc. The incorporated company or branch becomes a capable legal entity as of the date of its entry in the Commercial Register.
Further to the above, in order to bring their activity in conformity with the Commercial Register Act, all types of commercial companies, sole traders and branches of foreign commercial companies had to re-register with the Commercial Register by 31 December 2011. Sole traders and branches of foreign companies that failed to re-register with the Commercial Register on time are considered deregistered from the Commercial Register and winded-up ex officio by the Registry Agency as of 1 January 2012. The other traders that have not been re-registered within the deadline have seized their activity on 1 January 2012 and are to be liquidated and de-registered in accordance with a special procedure provided by law.
Unlike commercial companies and branches of foreign commercial companies, a TRO of a foreign company is established by means of registration in the Commercial Register with the Bulgarian Chamber of Commerce and Industry and is subject to secondary registration in the BUSLTAT Register, a united national administrative register also held by the Registry Agency under the BULSTAT Register Act 2005. This secondary registration serves as tax, social security and statistics registration for the TRO.
Although a local company or a branch should register its scope of activities, it is free to conduct any type of activities not prohibited by law, even if the respective activity is not expressly included in its registered scope of activities. Where a license or permit is required by virtue of special laws for the performance of a specific activity, such activity may be performed after obtaining the respective license or permit. By way of example, activities subject to a licensing/permit regime include banking, insurance, gambling, trade in medicines, trade in tobacco, etc.