A foreign company in control of one or several subsidiaries in other countries is called a holding company. Depending on the legal system, opening a holding company in Bulgaria might be subject to owning about 80% of the shares of the subsidiary. Our company formation agents in Bulgaria can help you set up a holding company in the country, in order to properly start your activities.
| Quick Facts | |
|---|---|
| Legal entities used | Private Limited Liability Company, Joint-Stock Company, Partnership |
| Incorporation method | With the Bulgarian Trade Register |
| Incorporation time | Around 3 days |
| Advantages | Entitled to EU funding |
| Precautions | Investing at least 25% of capital stock to subsidiaries |
| Shareholding structure | 1 or 2 shareholders, depending on the structure |
| Minimum Capital | EUR25,000 for JSC |
| Taxation | 10% corporate tax rate |
| Control | Foreign ownership available |
| Accounting and Reporting | Standard accounting rules |
| Number of double taxation treaties | 64 |
Table of Contents
Optimal structures for opening a holding company in Bulgaria
There are 3 types of business structures under which a holding company can operate in Bulgaria. Here are what they are and what characteristics they have:
- EAD or Joint Stock Company – Minimum share capital is EUR 25,000. This structure is optimal for raising the investment pool from the public.
- LP or partnership limited by shares – 2 shareholders and EUR 2 as minimum share capital are required. This structure is optimal for professional services.
- OOD or limited liability company – You can initiate any type of activity, and you will only need one shareholder and EUR 1 as minimum share capital.
Regardless of the structure chosen for the establishment of a holding company in Bulgaria, it is important to know that easily buying and managing shares of foreign legal entities is among the benefits. Also, a holding company in Bulgaria can finance managed companies. You can discover more details by contacting one of our local specialists. We can help you open a company in Bulgaria.
Steps of holding company registration in Bulgaria
In order to register a holding company in Bulgaria, you must pay attention to the following formalities:
- It begins with the preparation of the company’s founding documents. The Articles of Association can be made by one of our company formation agents in Bulgaria. We also represent our clients with a power of attorney.
- The completed documents are sent to the Bulgarian Trade Register.
- Managers of holding companies in Bulgaria are obliged to sign a Specimen at a public notary in the city where the holding company is registered. This document must be translated and legalized.
- Next is the opening of a bank account in Bulgaria for the holding company.
- It is also necessary to obtain a VAT number. The registration to obtain this tax ID can be done with the help of our specialists in company formation in Bulgaria.
Are you interested in opening a holding company in Bulgaria and do you need help in complying with the legal procedures? You can benefit from the support offered by our local specialists.
Other considerations about holding companies in Bulgaria
If you are thinking of registering a holding company in Bulgaria, you should know that this structure can offer loans to only those companies in which it either contributes directly or oversees them. On the other hand, it is good to know that subsidiary companies can make deposits in holding companies in Bulgaria up to 3 times the price of capital stock. If you want more information about the registration of a holding company in Bulgaria, do not hesitate to contact us online or by phone whenever you want.
We also recommend the services offered by our accountants in Bulgaria who have experience in this field and who can provide the necessary services for a company. Legislation can change frequently, and one of our specialists can implement any kind of changes, in addition to offering payroll, audits, and bookkeeping services. So, contact our experts to benefit from complete accounting services.
Legal aspects of the holding companies in Bulgaria
In order to establish a holding company in Bulgaria you need to consider a few important requirements, as follows:
- According to the Commercial Code, at least 25% of the holding company’s capital needs to be paid to the company which owns interests. A holding company in Bulgaria can be set up with the purpose of dealing with bond investments, in order to control another company.
- It is good to know that holding companies in Bulgaria cannot participate in businesses with no legal entities, and cannot purchase licenses that are not planned for use by its controlled companies.
- Foreign investors who wish to open a holding company in Bulgaria can choose between limited liability companies, joint stock companies, or limited partnerships.
Are you ready to open a startup in Bulgaria? Our specialists are at your disposal to help in preparing documents, opening a bank account, registering a business address, registering to pay taxes, and much more. It is much more advantageous to call on a team of company formation agents in Bulgaria than to act on your own for the advantages offered. Contact us today to benefit from a free case evaluation and guidance.
The corporate tax for holding companies in Bulgaria
The corporate tax rate in Bulgaria is set at 10% and it is applicable for holding companies in this country. Also, the dividends are subject to a withholding tax of 5%, but it may vary, depending on the double tax treaties and their provisions. The interests are levied with a 10% withholding tax rate, but deductions can be applied as in the case of taxation of dividends.
Tax advantages of Bulgarian holding companies
Foreign entrepreneurs interested in holding companies in Bulgaria need to know the benefits of such a structure in terms of taxes. Here is other information and advantages of this structure in terms of taxation:
- Bulgaria has signed more than 60 double taxation treaties with countries around the world in order to protect against double taxation and prevent tax evasion.
- Annual distributions are subject to a 5% withholding tax, which is a great advantage over foreign investors.
- In addition, companies established in the cities with the highest unemployment rate can benefit from a total exemption from the corporate tax rate.
- Financing is possible for holding companies managed in Bulgaria.
- Bulgarian holding companies can set up and control shares in international companies.
- EU funding is possible with a holding company in Bulgaria.
Reasons to set up a holding company in Bulgaria
Foreign investors choose to open holding companies in Bulgaria to buy, sell, and manage bonds, copyrights, commercial interests, or foreign legal entity stocks. In Bulgaria, a holding company can financially support its administered businesses. Holding companies in Bulgaria can be created with special conditions, and here we mention the possibility of receiving a preferential taxation system.
You can find out more about the charging system of the Bulgarian holding company from our specialists. The registration of business in Bulgaria can be done with the help of our local agents.
Frequently Asked Questions
Our specialists are at your disposal with information about Bulgarian holding companies, and the questions below can help you in the decision to open such a structure. Do not hesitate to talk to us and benefit from support if you are interested in setting up a holding company in Bulgaria.
1. What can a holding company in Bulgaria be used for?
Control of other existing companies can be done with the help of a holding company in Bulgaria. It can buy and sell bonds, securities, patents, and copyrights, but it can also manage them.
2. What is the minimum share capital for holding companies in Bulgaria?
If the holding company in Bulgaria operates under the rules of the joint-stock company, a minimum share capital of EUR 25,000 is required. At least 25% of this amount must be paid upon establishment. In the case of an LLC, the minimum share capital is EUR 2.
3. How many shareholders are needed to register a holding company in Bulgaria?
At least 1 investor or shareholder can set up a holding company in Bulgaria, and two are required if you are interested in the LLC structure.
4. What costs are required to set up a holding company in Bulgaria?
This structure is subject to low costs, including low rental costs. In addition, taxes are much more advantageous for the holding company in Bulgaria.
5. What is the corporate income tax imposed on holding companies in Bulgaria?
10% is corporate income tax for Bulgarian holding companies, one of the smallest in the European Union. These business structures can also benefit from other low taxes or even their elimination if they open businesses in areas with high unemployment.
6. Can a holding company in Bulgaria control shares in a foreign company?
Of course, this is possible and represents another benefit offered to foreign investors in Bulgaria. For more details, you can contact our team of company formation agents in Bulgaria.
7. Can a Bulgarian holding company control shares in another foreign company?
Yes, according to Company Law in Bulgaria, holding companies established in this country can manage shares in other foreign companies.
8. What is the dividend tax system for holding companies in Bulgaria?
There are no dividend payments received by holding companies in Bulgaria. Also, the payment of dividends by a holding company in Bulgaria to a company in the EEA area is exempt from taxes.
9. Is the holding company in Bulgaria protected by double tax agreements signed by Bulgaria?
Yes, Bulgaria has signed a number of double taxation treaties in order to prevent tax evasion and protect against double tax payments. These treaties are also valid for holding companies registered in Bulgaria.
10. Can subsidiaries open financial deposits in a Bulgarian holding company?
Yes, this is possible if a deposit is not exceeded by up to three times the value of the stock capital, according to the same Company Law in Bulgaria.
Why you should collaborate with our Bulgarian agents
There are many reasons why Bulgaria is on the list of top investment destinations. If you also fit into this landscape, it is good to know that we can help you. Regardless of the business structure you choose, you will have at your disposal a well-trained and professional team, which will take care of all the formalities and procedures involved. Our services are at your disposal from the first meeting, to know exactly the steps of setting up a company in Bulgaria. We can also help you with registration for paying taxes, obtaining the necessary business license as well and registering a trademark, as the case may be. Prices are affordable, and even our offers can be customized.
You are invited to contact our company formation agents in Bulgaria for additional information about how to open a holding company in the country. We can also help you incorporate a company in other countries with the help of our local partners.