If you are considering opening a company in Bulgaria it is it is very likely that, before reaching this point, you are wondering what corporate forms are available and how to choose them.
In Bulgaria, there are several company forms to choose from, including:
1. Sole ownership (sole proprietorship): it is a form of entrepreneurial activity in which a natural person is the sole owner of the company and manages all aspects of it.
2. General Partnership: it is a company made up of two or more natural persons who undertake to contribute resources (capital and labour) to the management of the company. The partners are unlimitedly and jointly liable for the company's debts.
3. Limited Partnership: it is a company established by at least one general partner (with unlimited and direct liability) and at least one limited partner (with limited liability to the paid-up share capital).
4. Limited Liability Company: is a form of company in which the members are not personally liable for the company's debts beyond the subscribed share capital. This form of company is the most popular in Bulgaria.
5. Joint-Stock Company: it is a company in which the share capital is divided into shares and the members are responsible only for the value of the shares they own.
6. Branch office: it is a permanent representation of a foreign company in Bulgaria.
7. Representative office: is a form of commercial presence that allows a foreign company to conduct marketing, promotion and market research activities in Bulgaria, without establishing a permanent structure.
The choice of corporate form in Bulgaria depends on the specific needs of the company. Below are some factors that can help you choose the most suitable corporate form:
1. Liability: If the goal is to limit the liability of members, the best corporate form may be a limited liability company (LLC) or a joint stock company (JSC).
2. Taxation: Depending on the type of business, there may be tax advantages associated with certain corporate forms. For example, the limited liability company may be subject to lower taxation than other corporate forms.
3. Number of shareholders: if you want to have direct control over the company, the best corporate form could be the limited liability company, where the number of shareholders is limited.
4. Formation requirements: Different corporate forms have different formation requirements, for example the minimum share capital required for a joint-stock company. It is important to carefully evaluate these requirements before choosing the corporate form.
5. Possibility of market access: if the goal is to expand the business in Bulgaria, the establishment of a branch of a foreign company or a representative office could be the most suitable corporate form.
6. Costs: different corporate forms have different costs associated with setting up and managing the company. It is important to carefully evaluate the costs to choose the company form best suited to your needs and financial resources.
Are you considering moving your business to Bulgaria or starting a new business here? Before doing anything, call us for an initial free, no-obligation telephone conversation. Start on the right foot followed by the best professionals in the sector.
