Setting up a Bulgarian branch by a foreign company is one of the legal forms for establishment of a business presence in Bulgaria. Usually the branch office is considered to be an alternative to being a (sole) shareholder of a Bulgarian company.
The Bulgarian branch office is not a separate legal entity but a part of the foreign company. As a result, share capital of the branch is not required and the foreign company is liable for the liabilities incurred by the branch.
Legal Representative of the Bulgarian Branch
Though the Bulgarian branch office is not a separate legal entity and appointment of a director is not required, the authorization of a legal representative of the branch is mandatory. The representative powers of the legal representative are determined by a power of attorney granted to him by the foreign company.
Registration with the Bulgarian Commercial Register
Under Bulgarian legislation branches are required to be registered with the Bulgarian Commercial Register. The necessary documents to register a branch in Bulgaria include:
- official certificate of good standing of the foreign company;
- official incumbency certificate containing the particulars of the persons authorized to represent the foreign company and their representative powers (if not contained in the certificate of good standing);
- resolution of the foreign company to establish a branch in Bulgaria (the persons competent to adopt such a resolution are determined by the national corporate law of the foreign company);
- constituent act/articles of association of the foreign company;
- notarized power of attorney granted to the legal representative of the Bulgarian branch;
- notarized written consent and specimen signature of the legal representative of the Bulgarian branch;
- declaration under art.13, para. 4 of the Bulgarian Commercial Register Act.
Under the Bulgarian Commerce Act following the successful branch office registration, the branch is required to maintain its own bookkeeping as well as to prepare a balance sheet.
Under the Bulgarian tax legislation the profit generated by a foreign company’s branch established in Bulgaria is subject to corporate income tax.