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Practice

Dividends in Bulgaria 5%

Making a decision to distribute a dividend is within the competence of the general meeting of the company. Dividend shall be paid only if, according to the adopted annual financial statement, the net value of the property reduced by the dividends to be paid is not less than the amount of the capital of the company. The Reserve Fund and the other funds, which the company obliged to form by statute or statute. The company is obliged to pay to the shareholders the dividend voted by the General Meeting. Within three months of its holding, unless the statutes provide for a longer term. On the amount to be distributed as dividend, the payer of the income shall deduct 5% of the final tax.. Where the recipient of the dividend is a sole trader, a resident natural person and a foreign natural person. The final tax is due on the gross amount of the distributed dividend determined by the decision of the General Meeting.

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Company types in Bulgaria

The Bulgarian OOD is a form of business especially established by the small and medium companies and it is formed by members with the liability limited to their contribution to the company’s capital. It is considered very advantageous to open a Bulgarian OOD because, unlike other jurisdictions, there is no need to submit a minimal share capital at incorporation.

The main documents of a Bulgarian limited liability company necessary for registration are the articles of incorporation and the memorandum of association (the last one in case only one shareholder is involved). The company of this type is managed by a director appointed by the general meeting of the shareholders (considered the highest instance in the entity). The name of the company must be unique and followed by the termination OOD.

A joint stock company in Bulgaria (AD) is a type of company designed for major businesses and must be incorporated by at least two individuals or corporate bodies. The name of the company must be unique and followed by the termination AD. Unlike the limited liability company, this entity must provide a minimum share capital of 50,000 BGN (for a closed joint stock company) or 100,000 BGN (for an open joint stock company) divided into shares with nominal value of 100 BGN.

At the base of each joint stock company, sits the by-laws of the company, containing the name and the registered address of the company, its purposes, details regarding the capital stock and shares, the name of the advantaged members and type of advantages, the modality of appointing the board of directors and the supervisory board, transforming or liquidating the entity. The main difference between the closed Bulgarian AD and the open Bulgarian AD is the only the shares of the last one can be traded at the stock market.

A single entrepreneur can register a Bulgarian sole proprietorship. The entrepreneur is fully liable for the company’s debts and can benefit from the full profits of it. There is no minimum share capital required for this type of business incorporated in Bulgaria and, in case of liquidation, the owner doesn’t have separated liability from its business and his personal assets may be affected by this process.

The Bulgarian general partnership is formed by two or more members with unlimited liabilities, united under the same name and with the same economic purposes. Just like in the case of the Bulgarian sole proprietorship, the personal assets of the members can be affected by the liquidation processes. A general partnership is based on the partnership’s articles which must state the name and address of each partner, the name of the partnership (formed by the names of the partners followed by the termination SD), the amount contributed by each partner and the modality the losses and profits will be divided between them.

Similar with the general partnership is the Bulgarian limited partnershipwhich is formed by two or more partners who can be general (this type of partner is fully liable for the entity’s liabilities and has full decisional powers and doesn’t need to contribute with a fix amount to the capital) and the silent partner (which has a liability limited to his contribution to the capital, doesn’t have a decisional power and, in case of liquidation, has his personal assets protected). This type of Bulgarian partnership is also based on the partnership’s articles. The name of this type of limited partnership must contain at least one general member’s name followed by the termination KD.

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VAT registration for a EU Foreign company

The VAT registration in Bulgaria for a EU Foreign company will be something which can happen without any additional problems from the National Revenue Agency. The registration itself takes 14 days.
Regarding the VAT registration, the needed documents are as follows:

1. Only for the manager of the company: a claim for issuing of personal identification number (a special form which we will prepare).
2. Claim for issuing of identification number for the company (another special form NRA we will prepare).
3. Application form for the VAT registration. (another special form NRA we will prepare).
4. Declaration under art. 74 signed by the manager. In general here you have to declare that you have no criminal proceedings against the tax system. (a special form which we will prepare and send to you for signing).
5. Turnover report for the last 12 months; (a form which we will prepare).
6. Application and declaration under art. 101 p. from 5 VAT Act – with this document you inform the Bulgarian National revenue agency about your official e-mail address. In case of change you have to inform the NRA about it within 7 days. (a form which we will prepare and send to you for signing).
7. Official (signed and stamped) document by the authorized Greece Agency for the main activity of the company.
8. Certified Certificate (official) from the Chamber of Commerce in Greece if such registration exists – provided by the company.
9. Translation and legalization of a Certificate of current status and the Company Tax Registration Certificate (in Greece).
10. Power of attorney for the person who has to submit the above mentioned documents.

Note: All documents in a foreign language are to be translated into Bulgarian by a sworn translator

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Calculation of working time

Working time – the period the employee is available to his employer. In the working time the time to travel to work is not included and the time to prepare for work is not included.

Working week is from Monday to Sunday

Normal working day is 8 hours

Normal Working week 40 hours

Total calculation of working time – calculation of working time which can be estimated in period One month, two months or up to six months.

One days or weeks can be longer and this difference to be compensated in the other period.

No agreement is needed from the employees to make Total calculation of working time.

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