SETTING UP A COMPANY

by Nadia Damon

Anyone looking to buy some land in Bulgaria, even a garden plot the size of a postage stamp, must do so through their own company

But while this may sound horribly complicated at first, armed with the relevant information and documents, you should find the whole process relatively quick and painless.

Taxation and company matters can be confusing enough in your own country, but when you're abroad and trying to adhere to, and understand, a completely different set of rules, it can be a huge headache. Bulgaria's penchant for applying rules differently in various regions of the countrycan also complicate matters. Engaging a local lawyer should be the quickest way to get your business up and running.

"Company documents have to be written in a certain way and you really need to get someone who is familiar with the system, and the associated procedures for your district, to do this for you," says Sofia-based lawyer Veneta Atanasova. Most property agencies have an in-house team who offer this service, so you may prefer to go down this avenue. But, if your setup is not based around an agency purchase, or you simply prefer the idea of having an independent lawyer working for you, look for Bulgarian Bar Association members on the Bulgarian Law Portal website (www.lex. bg), which is conveniently written in English. Select your particular area of Bulgaria on the map, or use the drop-down menu and search options for a list of registered local lawyers. While it is not a guarantee of best practice, everyone listed is a bona fide lawyer. If you do have a complaint about any of the listed members you can contact the Supreme Bar Council to make an official complaint. Word-of-mouth is always going to be the best way to find a lawyer, but if you don't have any contacts in Bulgaria, this website is a handy option.

It's a good idea to familiarise yourself with the whole set-up procedure and agree a price for a third party's services upfront. Bulgaria has some excellent lawyers and accountants, but like anywhere, you need to watch out for any opportunists waiting to take advantage of your ignorance of the country's laws and procedures.

If you don't read Bulgarian, it's essential that you get a translator to run you through the paperwork - after all, you could be placing control of your finances and business in the hands of a total stranger. You should also note that it is illegal for documents to be translated by the person you are empowering to act on your behalf. This point will be strictly observed by notaries. People should always err on the side of caution with representation rights, stresses Atanasova.

"When it comes to setting up a company bank account, I would always recommend that people only empower another person to register their capital for them," says Atanasova. "If you live in Bulgaria, or have plans to visit in the future, it's a much better idea to go to the bank and withdraw the funds yourself. You will then have piece of mind that your money is safe and no one else can access it."

Preparation is the key to an efficient company set-up, so make sure you come prepared with all the necessary information and documents. First you need to decide on a company name and its relevant address in Bulgaria. After you have thought of a suitable moniker, your lawyer will check it is available with a company like Information Service (for more information visit www.is-bg.net) and request it. The name will be issued for a period of around five months; during this time your lawyer will register your company. A legal statement identifying the manager of the company and listing any shareholders will also be drawn up. The manager's signature needs to be notarised and kept on record. The same document will contain the objectives of the company - tourism, consultancy, or property purchase, for example.

After this, you will need to send a representative (using a power of attorney) or go to the bank with them to open a company account. The minimum deposit is 3,500-5,000 leva. It's important to note that you are able to withdraw the deposit sum after the company set-up is complete. However, to do this, you have to close the original account, which is only for registration, and transfer your funds into a normal business account.

The second stage of the set-up procedure focuses on taking documents to a court. After these company documents have been drawn up, your lawyer will take them to a local court. The approval decision takes about a week. It is not a judgement, rather the processing of all your documents through the system.

Following the court approval, your lawyer or representative will then apply for a Bulstat. This is a combination of digits unique to your company that enables people to check the status of your firm - for example, whether it has outstanding debts. Your Bulstat number will be quoted in any transactions and is essentially your company's unique ID. Bulstat numbers are temporarily issued in paper format. After a month your lawyer will need to redeem this for a small plastic card.

Armed with your company name (and an approval document issued by the company name allocation firm) you then go to a local stationery shop for a company stamp. This stamp, which costs around 20 leva for the self-inking variety, must accompany your signature on any invoices or company documents.

Finally, get your lawyer to file your company documents in their office or place them in a safety deposit box for secure storage.

 

Company Checklist and Costs

Stage 1 - preparation

1. Decide on company name and address

2. Select a company manager and allocate portions to any shareholders

3. Company manager presents a specimen signature to a notary - three leva

4. Company capital - 3,500-5000 leva deposited in set-up account

Stage 2 - court

1. All company documents are presented to the court

2. Decision of the court - 151.50 leva (120 leva registration fee, 1.50 leva for a copy of the judgement, 30 leva for publication of the court decision)

Stage 3 - administrative

1. Bulstat registration - 60 leva

2. Company stamp - 20 leva

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