Company registration in Bulgaria – June 2019 update!

What to look for when applying to open bank account for new Company in Bulgaria

Company formation in Bulgaria was a straightforward procedure until the end of 2018. One could register new LTD (OOD) effortlessly and could sequentially start trading immediately. Not the case anymore. And no, don’t get me wrong – nothing significant has changed in the Bulgarian commercial law or the other relevant acts. The problem lies elsewhere… in the Bulgarian banks that are now reluctant, least to say, to open bank accounts for any company that is either managed by or owned by non-Bulgarian citizen(s).

The bank account opening problem

Opening bank account when registering Bulgarian company is necessary in order to deposit the capital of the company. No matter how small this initial company capital is – it can be as low as 1 EUR (2 BGN), for the formation to become effective, one has to open temporary (aka seed) bank account for the company and to deposit (officially) the capital. And here is where the problems start. As we have already informed our clients, all banks in Bulgaria started rejecting opening of bank accounts for foreigners.

The cause of the problem

To put it simply, the banks are becoming overly regulated and that leads to their FEAR of breaking one of the many Bulgarian and EU rules (laws) and directives. Accepting someone to become a client who can not prove its business will be not only legitimate, but also sustainable and “noble” (a weird ford for a business, but being used now by many bank managers), can lead to the bank losing its reputation and being fined harshly by the regulators. As Stalin has once said “no man – no problem”, the banks in Bulgaria have now transposed this to “no (foreign) client – no problem”.

The solution

What will (most probably) not work

Unless you are trying to open bank account for internationally renowned company (ie Huawei, Siemens…) or a company with rich and “noble” history in Bulgaria, you have virtually no chances to succeed on your own (data as per June 2019). You may try preparing comprehensive business plans, references from other banks, etc. This might indeed work in some extremely rare cases, but if you count on such probability, you are far better off trying the Lotto instead.

And the other option

is simply hiring professional consultant to do it on your behalf. Ernst and Young, Deloitte and few others will do the job. Their prices however will bite even those with the deepest pockets. As it often happens in life, those who can afford the “big guys” professional fees are those who can do it themselves (multinationals, internationally renowned). The others have few options left. And precisely here is where we believe we can really help.

Please contact us for free quote and professional consultation.