Bulgarian company formation SCAMS

The scammers are striking again. In 2021, we are now witnessing more scammers offering Bulgarian company formation, than ever before. Bulgaria has extremely low tax rate, but it is not an offshore tropical island with shady practicies! The country is fully fledged EU member state for 14 years already and is cherishing its reputation. Bulgaria offers no miracles, only the best tax legislation and administrative conditions in the EU.

Favorable tax and administrative regime and huge demand by foreign investors to open business in Bulgaria

Bulgaria has been known for long about its favorable tax regime and low administrative costs. All this combined with the company’s full EU membership has resulted in unprecedented amount of foreign investors willing to register companies in Bulgaria.

Unfortunately, the more the demand, the more aggressive are the scammers. We will outline below the most frequent scams, reported by our clients in 2021. It appears that there is huge number of foreign scam artists, who are trying to market Bulgarian company formation. To lure their victims and make them pay money (in some cases a lot of money), they offer “special” conditions. Unfortunately, such “deals” are illegal and many of the investors have not only lost their money, but some are serving time in Bulgarian institutions.

Where are the scammers coming from

It appears that most of the scam offers for Bulgarian company formation are coming from outside of Bulgaria. Even those, originating from Bulgaria, appear to be mostly run by foreigners, pretending to be Bulgarians.

So what are the countries that you should be extremely cautious if you receive an offer for company formation in Bulgaria?

The scams originate mainly from persons or organizations in Cyprus, Israel, Hong Kong, Switzerland, Albania, Russia, Ukraine, South Africa, Turkey and Lebanon. Not that there are no scammers located elsewhere, but if you are contacted by anyone from these countries, be on alert. Most probably, what you will hear will be too good to be true. And of course, engaging in such business may have catastrophic consequences.

What are the most common scams?

The scammers are extremely smart and scams are being invented every day. Still, there are some, that we hear every day, again and again. So here they are:

You can register Bulgarian company online (and of course we will do it for you, after you pay the fee);
In Bulgaria the corporate tax rate is 10%, but with some smart moves, you can bring it down to 5% and even less;
In Bulgaria you don’t have to pay dividend tax, because you are foreigner;
You don’t have to pay VAT in Bulgaria;
The first one million is tax free in Bulgaria, so if you don’t make too much, you won’t need paying taxes;
In Bulgaria, you will get 3 years free of taxes as a gesture by the government, so you can start your business;
When you register business in Bulgaria, you will get Bulgarian citizenship.

What to do if you are offered anything from the above?

Simply said – RUN AWAY! You will lose any money that you will pay for any such promises. Worst of all, you may need to stay in Bulgaria for a while, on a state budget, but you won’t like the conditions.