Registration of a branch of a non-Bulgarian incorporated company in Bulgaria

Registration of a branch of a non-Bulgarian incorporated company in Bulgaria

a) Summary
b) Documents required
c) Costs
d) Timeframe
e) Legal issues

a) Summary

New Balkans Law Office (“NBLO”) will be able to assist with the following primary and ancillary aspects of the registration of a branch office of a non-Bulgarian person:

· Advice on the relative advantages of establishing a Bulgarian private limited liability company, a branch of a foreign company, and a commercial representation office of a foreign company;
· Advice on the documentation required for the registration of a branch;
· Drafting and preparation of documents for the registration of a branch including documents to be executed/provided by the parent company;
· Effectuation of a registration with, inter alia, the National Statistics Institute, National Social Security Institute and the Local Tax Authority;
· Registration under the VAT Act of 1999 of the new branch;
· Preparation of branch/company books as required by law.

In addition, NBLO can assist with:

· the setting up of a bank account for the new branch;
· the negotiation of a lease of office space;
· the conclusion of employment contracts with new staff.

b) Documents required

The following documents will need to be prepared and filed with the relevant Bulgarian authorities to effect the branch registration (and if they are not signed in front of notary in Bulgaria then they will need to be witnessed by a suitable official and apostiled in the country of signature):

· Power of Attorney of the person who will be in charge of initiating and completing the procedure for registration of the branch;
· Minutes of a meeting of the directors of the parent company explicitly showing the decision: i) to establish a branch of the parent in Bulgaria, ii) to approve the registered address and business address, iii) to define its scope of activity, iv) to appoint its manager and lawful representative, and v) the limitations of his powers, if any;
· Declaration under Article 141, sub-Article 3, of the Commercial Act of 1991 and a specimen signature of the manager and lawful representative;
· A certificate for current standing of the parent issued by the Registrar of the companies or the respective body as per national company’s registration legislation;
· Certificate for reservation of the branch’s commercial designation issued by the Bulgarian National Reservation System DELFY;
· Receipts for payment of the registration fees.


c) Costs

Generally, the process will cost in the region of EUR 750 (approximately 15 billable hours) and plus registration costs and other disbursements, which are typically as follows:

Typical Disbursements
Value (in BGN)
Value (in Euro)
Translations
30
15
Validation/Notarisation
20
10
Reservation of the name of the branch
100
50
State Gazette Publication
30
15
Sofia City Court Company’s Registrar Fee
60
30
Official copy of the decree for registration
1.50
0.75
Registration with the Statistics Institute
100
50
Official stamp of the branch
33
16.50
Opening of a current bank account
25
12.50



Total
399.50
199.75


d) Timeframe

The registration can be completed by NBLO in approximately 7-10 working days.

e) Legal Issues

Clients should consider carefully whether registering a branch office is the most appropriate form of presence for the business they wish to conduct in Bulgaria.

Branch offices require a manager, who can be a foreign person. There are certain limits on the capacity of the branch office, acting by its manager. As a branch is not a separate legal entity, distinct from its parent, it is normal for the other party to a transaction to require an explicit confirmation by the parent company that the branch is able to conclude the relevant contracts in Bulgaria. As such, a great deal of attention will be paid to the capacity of the branch manager. This may result in delays to the business activity of the branch. Consequently, NBLO recommends that a client register a branch only if it plans to develop a short-term or small to middle-size business activity within Bulgaria.

For alternative methods of starting your business in Bulgaria, please contact NBLO consultants.