Bulgaria is a developing country, with an upper-middle-income economy, ranking 56th in the Human Development Index. Its market economy is part of the European Single Market and is largely based on services, followed by industry—especially machine building and mining—and agriculture.
Bulgaria has an open, upper middle income range market economy where the private sector accounts for more than 70% of GDP.
Extraction of metals and minerals, production of chemicals, machine building, steel, biotechnology, tobacco, food processing and petroleum refining are among the major industrial activities. Mining alone employs 24,000 people and generates about 5% of the country's GDP; the number of employed in all mining-related industries is 120,000. Bulgaria is Europe's fifth-largest coal producer. Local deposits of coal, iron, copper and lead are vital for the manufacturing and energy sectors. The main destinations of Bulgarian exports outside the EU are Turkey, China and the United States, while Russia and Turkey are by far the largest import partners. Most of the exports are manufactured goods, machinery, chemicals, fuel products and food. Two-thirds of food and agricultural exports go to OECD countries.
Bulgaria boasts Europe’s lowest public deficit rates Bulgaria has the lowest tax rates in the region –a 10% rate both on personal income and corporate income – as well as a bilateral treaty that allows for the avoidance of doubletaxation with the United States.
Bulgarian resident entities are taxed on a worldwide basis. Foreign entities are taxed on their Bulgarian-source income. Companies are considered to be tax residents if they are registered in Bulgaria. Companies that are non-residents in Bulgaria, but operate in Bulgaria through a branch, office, agency or other form of a permanent establishment are only liable to tax on the profits generated through their Bulgarian establishment.
Businesses investing in municipalities with high the rate of unemployment are eligible for Bulgarian state aid for regional development consisting in retaining up to 100% of the due corporate income tax.
The tax incentive is granted if the profit of the investor is derived from manufacturing activities in municipalities with high the rate of unemployment and provided that the company maintains at least 10 employees of whom 50% are directly engaged in the manufacturing activities and at least 30% reside in the high unemployment rate municipality.
The retained tax must be invested in non-current tangible and intangible assets which form part of an initial investment project.
Subject to certain conditions certified investments may be eligible for the following incentives:
-shorter deadlines for administrative services;
-financial aid for technical infrastructure necessary for carrying out the investment project;
-financial aid for professional qualification and training of persons, including university trainees, taking the new jobs created by the investment;
-financial aid for partial refund of the social security and health insurance contributions paid by the investor as an employer with regard to newly-employed personnel.
The main areas of intellectual property rights under Bulgarian law include:
-copyright and related rights;
-industrial property rights (patents, utility models, trademarks, industrial designs, geographic indications, topologies of integrated circuit)
-sui generis rights (databases, new plant varieties and new animal breeds).
All persons wishing to undertake economic activity through a local company in Bulgaria have to apply to the Bulgarian District Court for registration at the special Commercial Register kept by the Court. Authorization to conduct economic activity is given from the date of entry in the Commercial Register. Foreign entities may operate through joint-ventures, wholly owned subsidiaries and branches in Bulgaria.
Foreigners may own buildings and limited rights over immovable property. Nevertheless, direct ownership of land is prohibited and ownership of agricultural land by foreign persons is restricted.
Bulgaria has a civil law legal system. The judiciary is overseen by the Ministry of Justice. The Supreme Administrative Court and the Supreme Court of Cassation are the highest courts of appeal and oversee the application of laws in subordinate courts. The supreme legislative body is the National Assembly (Narodno Sabranie), seated in the capital Sofia.
It enacts legislation and ratifies international treaties. Municipal councils perform legislative functions at the local level and in full compliance with the laws enacted by the National Assembly.
The judicial power in Bulgaria is independent. It is built up on the basis of a procedure of three instances.
Statutory law governs Bulgaria. Case Law doctrines of precedent and stare decisions are unknown. The legal system is based on legal models found elsewhere in Europe, especially on the civil law systems of France, Germany, Italy and Belgium.
Bulgarian law stipulates that representation in court and before administrative agencies must be performed by duly licensed members of the Bulgarian Bar Association. These individuals can be independent practitioners in law firms or employees of corporations with the necessary skill.
Our law firm VLO provides legal services for corporate and private clients in Bulgaria. These services include mergers and acquisitions, business and debt restructuring, tax and tax disputes, corporate disputes, investments, bankruptcy, litigation and arbitration.
If you have questions, please us right now.
E-mail: vlolawfirm@gmail.com
Bulgaria has an open, upper middle income range market economy where the private sector accounts for more than 70% of GDP.
Extraction of metals and minerals, production of chemicals, machine building, steel, biotechnology, tobacco, food processing and petroleum refining are among the major industrial activities. Mining alone employs 24,000 people and generates about 5% of the country's GDP; the number of employed in all mining-related industries is 120,000. Bulgaria is Europe's fifth-largest coal producer. Local deposits of coal, iron, copper and lead are vital for the manufacturing and energy sectors. The main destinations of Bulgarian exports outside the EU are Turkey, China and the United States, while Russia and Turkey are by far the largest import partners. Most of the exports are manufactured goods, machinery, chemicals, fuel products and food. Two-thirds of food and agricultural exports go to OECD countries.
Bulgaria boasts Europe’s lowest public deficit rates Bulgaria has the lowest tax rates in the region –a 10% rate both on personal income and corporate income – as well as a bilateral treaty that allows for the avoidance of doubletaxation with the United States.
Bulgarian resident entities are taxed on a worldwide basis. Foreign entities are taxed on their Bulgarian-source income. Companies are considered to be tax residents if they are registered in Bulgaria. Companies that are non-residents in Bulgaria, but operate in Bulgaria through a branch, office, agency or other form of a permanent establishment are only liable to tax on the profits generated through their Bulgarian establishment.
Businesses investing in municipalities with high the rate of unemployment are eligible for Bulgarian state aid for regional development consisting in retaining up to 100% of the due corporate income tax.
The tax incentive is granted if the profit of the investor is derived from manufacturing activities in municipalities with high the rate of unemployment and provided that the company maintains at least 10 employees of whom 50% are directly engaged in the manufacturing activities and at least 30% reside in the high unemployment rate municipality.
The retained tax must be invested in non-current tangible and intangible assets which form part of an initial investment project.
Subject to certain conditions certified investments may be eligible for the following incentives:
-shorter deadlines for administrative services;
-financial aid for technical infrastructure necessary for carrying out the investment project;
-financial aid for professional qualification and training of persons, including university trainees, taking the new jobs created by the investment;
-financial aid for partial refund of the social security and health insurance contributions paid by the investor as an employer with regard to newly-employed personnel.
The main areas of intellectual property rights under Bulgarian law include:
-copyright and related rights;
-industrial property rights (patents, utility models, trademarks, industrial designs, geographic indications, topologies of integrated circuit)
-sui generis rights (databases, new plant varieties and new animal breeds).
All persons wishing to undertake economic activity through a local company in Bulgaria have to apply to the Bulgarian District Court for registration at the special Commercial Register kept by the Court. Authorization to conduct economic activity is given from the date of entry in the Commercial Register. Foreign entities may operate through joint-ventures, wholly owned subsidiaries and branches in Bulgaria.
Foreigners may own buildings and limited rights over immovable property. Nevertheless, direct ownership of land is prohibited and ownership of agricultural land by foreign persons is restricted.
Bulgaria has a civil law legal system. The judiciary is overseen by the Ministry of Justice. The Supreme Administrative Court and the Supreme Court of Cassation are the highest courts of appeal and oversee the application of laws in subordinate courts. The supreme legislative body is the National Assembly (Narodno Sabranie), seated in the capital Sofia.
It enacts legislation and ratifies international treaties. Municipal councils perform legislative functions at the local level and in full compliance with the laws enacted by the National Assembly.
The judicial power in Bulgaria is independent. It is built up on the basis of a procedure of three instances.
Statutory law governs Bulgaria. Case Law doctrines of precedent and stare decisions are unknown. The legal system is based on legal models found elsewhere in Europe, especially on the civil law systems of France, Germany, Italy and Belgium.
Bulgarian law stipulates that representation in court and before administrative agencies must be performed by duly licensed members of the Bulgarian Bar Association. These individuals can be independent practitioners in law firms or employees of corporations with the necessary skill.
Our law firm VLO provides legal services for corporate and private clients in Bulgaria. These services include mergers and acquisitions, business and debt restructuring, tax and tax disputes, corporate disputes, investments, bankruptcy, litigation and arbitration.
If you have questions, please us right now.
E-mail: vlolawfirm@gmail.com
Bulgaria