Bulgaria Country Profile business trade issues

Bulgaria

DOING BUSINESS

Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

The companies of the European Union countries can benefit from not refundable loans through the PHARE program, meant for the assistance to the Economic Reconstruction (Poland, Hungary and Bulgaria). It aims at financing industrial restructuration projects, helping the country to set up a market economy.
Protection of foreign investments provides a VAT and customs duties exemption on material incorporated into foreign subsidiaries capital, provided that this material contribution accounts for at least USD 100,000 and 30% of the incorporated capital. The BFIA (Bulgarian Foreign Investment Agency) is the governmental agency for the promotion of international investments providing an investor's guide.

Legal forms of companies

Form	Number of partners/shareholders	Minimum and/or maximum capital	Liability	Registration fee	Release of financial documents
Private Limited Company (OOD)	Minimum 2 partners. 1 member for a sole proprietorship.	Minimum BGL 50,000 (shares of minimum BGL 500).	Liability is limited to the amount contributed.		No
Joint-stock company (AD)	Minimum 2 shareholders.	Minimum BGL 1 million (5 million in case of public subscription).	Liability on assets of the company and up to their value towards creditors.		Yes
General partnership	Minimum 2 partners.	No minimum capital.	Partners' liability is joint and unlimited .		No
Limited partnership	Minimum 2 partners, a sleeping partner and an active partner.	No minimum capital.	Active partners' liability is joint and indefinite. Sleeping partners' liability is limited to the amount contributed.		No
Partnership limited by shares	Minimum 3 sleeping partners. Minimum 2 active partners.	Minimum BGL 1 million ( 5 million in case of public subscription).	Active partners' liability is joint and unlimited. Sleeping partners' liability is limited to the amount contributed.		Yes

Registration and licensing procedures
To register an OOD with the Trade Register, minimum 70% of the registered share capital has to be paid. An AD must be registered with the Trade Register and a minimum of 25% of the share capital has to be paid.
Finally, a branch must be registered with the Trade Register of the competent regional Court.

Foreign exchange control
Free conversion of the Bulgarian currency, Leva, is carried out in the country. It can be exchanged into foreign currencies within banks allowed by the Central Bank to carry out transactions in foreign currencies.

Regulations concerning equity investment
The proportion of foreign participation in new or existing businesses is not limited. Foreigners have the right to register any company types according to the Bulgarian Commercial Code, including legal type of businesses extending the benefit of Private Limited Company status to sole owners with a 100% foreign participation.

Foreign Direct Investment inflows in Bulgaria

FDI inflows	2003	2004	2005	World rank (*) 2005
FDI inflows (USD million)	2097	3 443	2 223	9/141

Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

Last modified in 2006 - ongoing update