Legal representation on Bulgarian corporate & commercial matters

Setting up, transfer (change of ownership) and liquidation (closing) of Bulgarian companies & other corporate entities.

If you are foreign physical individual and you need to register in your name a local corporate body (a Bulgarian company), then in our capacity of Bulgarian corporate lawyers we may offer to you to prepare and perform the registration on your behalf, without any need for you to visit Bulgaria. We can register a company in your name anywhere in Bulgaria. Note that there are various types of local corporate bodies, and a brief professional advice may find the right type of company to protect your (and your partners') investment best.

- SETTING UP A BULGARIAN COMPANY: When registering a local corporate body, the Establishing Memorandum should be prepared by a Bulgarian law practitioner, following your strict requirements in order to fit your interests best in relation to the type and activities of the company, the term of the existence of the company, the rights and obligations of the shareholders (if more than one) etc. Also the incorporation has to be performed properly and quickly, especially when needed for purchasing a concrete Bulgarian real estate in the name of the company; and this is namely what we can offerto you. When registering a local corporate entity on behalf of foreigners, we need to point that Bulgarian lawyers have a professional insurance towards clients, which unfortunately other trading parties (real estate agents, accountants and intermediaries) do not have, so this is why local lawyers are responsible to clients and a bridge of trust can easily be set up between a lawyer and a client. If the foreign individual has to authorize a person to register on their behalf a local Bulgarian corporate body, then the best option will be to hire a Bulgarian lawyer, who will be fully liable to them.

- KEEPING A BULGARIAN COMPANY IN PROPER ORDER: If you already own a local Bulgarian company, then please note that owning and managing the affairs of a local corporate body is not a simple job, even when it is just a non-working company without any business accounts (in most cases registered to buy an immovable property in Bulgaria). The properties you buy in the name of the company represent assets of the company, respectively their price has to be detailed in the company accountancy (especially the zero annual tax returns). This means that even if it is an empty local company, or a non-working local company each year the manager of the company should submit and get the financial reports published at the local Companies House. Otherwise there is a State fine. In addition, bearing the properties you sell on behalf of the company bring profit or loss, and Capital Gains obligations to your company, you should get a legal advice before you manage these operations & transfers. We may advise you about the rights and obligations of managers/directors of local companies, before you appoint yourself to be one. We keep in proper order the local companies of hundreds of foreing investors from the UK and Ireland.

- CHANGES IN THE CIRCUMSTANCES OF A LOCAL COMPANY - very often it is required, especially in cases where the whole company is sold altogether with the property, changing shareholders or managers, or just for changing your local representatives (i.e. the official management address of the company), or broke up partners, in case of decease of a shareholder, etc. Proper performance of amendments in the company legal status is advisable to be performed by a qualified Bulgarian lawyer who will handle all the procedure on your behalf. We can perform any change of the circumstances of your company, no matter where in Bulgaria it has been registered. For transfer / sale of a local company body towards another individual, legal assistance is needed so the whole paperwork related to the transfer to be proper, resp. to be accepted & published at the Companies House, when the new company owner applies for change in the circumstances of the company.

- CLOSING / LIQUIDATION OF BULGARIAN COMPANY - even if it is related to non-working, or an empty company without any assets, this is not a simple or a short-term procedure, which requires lots of documents and activities to be done in various institutions. We are corporate lawyers and we can perform the liquidation of your local company on your behalf, no matter where in Bulgaria the ecompany is registered and without involving you in the long process, where at the end we will present to you the Certificate for liquidated company.

- ADVANTAGES TO LIQUIDATE YOUR NON-WORKING COMPANY: Since 2012, EU citizens are legally entitled to own regulated plots in Bulgaria in their capacity of private individuals. I.e. setting up a local company for buying land in Bulgaria is not needed any longer for these particular investors. For these who own non-working local Bulgarian companies, we will try to compare the advantages of closing the company & owning a real estate in Bulgaria as physical individual, instead of keeping a company active only because of the property. So if you are in this situation, then you can have a thought and to make a decision and choose the best suitable option for you:
1) In short term: Annual property taxes are lower if a property is owned by physical individual, than if it is owned by a company. The post-communist and so-called "democratic" system in Bulgaria considers that if a company owns a property, then it makes profit of it, so it should pay higher annual property taxes. This is very important especially if you have already missed to pay several years the council property taxes.
2) You won't pay any longer for publishing annual financial reports (zero tax returns) of your company at the local Companies House (we usually quote 100-150 Euro annual fee for submitting these on behalf of the company). Moreover you won't be subject of any State fines/tickets in the legal region 250-2500 Euro for missed deadlines in submitting these by ex-accountants, ex representatives etc. I.e. it is much safer, easier and cheaper for you to close the company and to deal with the property as physical individual.
3) In long term: There are less tax complications (namely Capital Gains) if you sell a property as physical individual, than if you sell it as a corporate body. If you acquire the property in your capacity of physical individual now, the local Law provides that after three of five years (depending of the type of your real estate) you may re-sell it for whatever profit you can achieve, without being obliged to pay any Capital Gains. This option is not available for companies at all, where 10% Capital Gains always applies and cannot be avoided. It has important role especially in situations, where you may have been misled previously to get a Title Deed with stipulated lower price than actually paid.
4) Soon or later, you will have to liquidate the local Bulgarian corporate entity and pay the related fees and State taxes, where to wait 6 months liquidation period, during which to act as liquidator of your own company. This will definitely happen because it is very likely that a prospective buyer of your property will chose to buy it separately from the company. I.e. buyers do not feel safe to buy companies together with the plots and they do not use to do it - simply because they are afraid of the company's history, eventual liabilities and debts to third parties and previously performed accountancy. This is valid especially for the Russian buyers who now form the biggest part of the market - they don't buy companies and they don't buy plots. For hundreds performed property sales so far we have not had a single case where a buyer has agreed to buy the proposed to them company together with the property - although the property transfer taxes are much lower in such a transfer. It is understandable that that people are afraid to buy somebody's company.
This is why a professional handling of your company matters by a Bulgarian lawyer is always recommendable. We are experienced corporate lawyers and we may provide legal assistance and guidance to you, to perform all needed legal activities and to take care of the documentation related to your company; to keep it in our records and to keep the company in proper legal standing, resp. to close it. Contact us for quotation and guidance.