Opening a Business Account in Bulgaria Made Easy

Did you know that Bulgaria ranks among the top countries in Europe with a corporate tax rate of just 10%? Bulgaria has become a hotspot for entrepreneurs, with over 400,000 businesses operating within its borders and a strategic position in the EU. However, opening a business account here requires navigating specific processes, documentation, and local regulations. In this blog post, we will learn how to open a business account in Bulgaria step-by-step, ensuring compliance and ease.

Benefits of Having a Business Account in Bulgaria

A business account in Bulgaria is not just about regulatory compliance; it’s essential for efficient and professional business operations. Here’s why:

Access to EU Financial Systems

Bulgaria’s integration with the European Union makes its financial systems robust and accessible. Opening a business account allows companies to participate seamlessly in transactions across EU member states, ensuring compliance with EU banking and economic standards. This access is invaluable for businesses with EU suppliers, clients, or partners.

Currency Options

Bulgarian business accounts support multiple currencies, including BGN, EUR, USD, and GBP. This feature is particularly beneficial for businesses with international operations, allowing them to send, receive, and hold funds in various currencies without frequent currency conversions.

Tax and Compliance Advantages

With a flat corporate tax rate of just 10%, Bulgaria offers one of the most competitive tax environments in the EU. A local business account simplifies tax compliance, including VAT registration and payments. It also facilitates the submission of financial reports to Bulgarian tax authorities, ensuring adherence to local regulations.

Online Banking and Security Features

Most Bulgarian banks provide advanced online banking services, making it easy to manage accounts, make payments, and monitor transactions in real-time. These systems often include multi-language support, including English, robust security measures, and tools for managing multiple accounts.

Types of Business Accounts Available in Bulgaria

In Bulgaria, businesses can choose from various bank account types tailored to their specific needs. The primary categories include:

Current Accounts (Checking Accounts)

These accounts facilitate daily business transactions, such as receiving payments, paying suppliers, and managing payroll. They often have features like online banking, debit cards, and overdraft facilities.

Deposit Accounts (Savings Accounts)

Designed for businesses looking to earn interest on surplus funds, these accounts may have restrictions on withdrawal frequency but offer higher interest rates than current accounts.

Currency Accounts

For companies dealing with international clients or suppliers, currency accounts allow holding and transacting in multiple currencies, including EUR, USD, and GBP, reducing the need for frequent currency conversions.

Escrow Accounts

Escrow accounts are common in real estate deals or large business agreements. They are used to hold funds securely during transactions and ensure that funds are released only when predetermined conditions are met.

Fundraising Accounts

Specific to the company formation process, these temporary accounts are established to deposit the initial share capital required for registering a new company in Bulgaria. Once the company is registered, the funds are transferred to a regular business account.

Specialised Accounts

Some banks offer accounts tailored to specific industries or business activities, such as accounts for non-profit organisations, investment firms, or companies engaged in import-export activities.

Popular Banks in Bulgaria and Their Offerings

UniCredit Bulbank

UniCredit Bulbank is Bulgaria’s largest bank. It offers tailored business accounts, multi-currency options, and advanced digital banking. It also provides corporate loans, project financing, and investment advisory services, making it a top choice for businesses seeking robust financial support and global connectivity.

DSK Bank

DSK Bank boasts a vast branch network and comprehensive business banking services, including payment solutions, current accounts, and credit facilities. Its user-friendly online platforms and treasury services make it a reliable partner for businesses needing financial stability and efficient cash management.

United Bulgarian Bank (UBB)

UBB delivers diverse corporate banking solutions, including trade finance, working capital loans, and cash management services. It stands out for its investment banking expertise and digital tools, which help businesses navigate complex financial landscapes easily.

Postbank (Eurobank Bulgaria)

Postbank offers flexible account options, SME loans, and corporate financing solutions to businesses. Its robust digital platforms simplify financial management, while its focus on cash flow optimisation and tailored lending ensures a competitive edge for businesses of all sizes.

First Investment Bank (Fibank)

Fibank is known for innovation. It offers business accounts, credit products, and trade finance solutions. Its advanced e-banking services and focus on payment processing make it a strong choice for businesses seeking efficiency in local and international transactions.

Raiffeisenbank (Bulgaria)

Raiffeisenbank offers customised corporate accounts, project financing, and leasing solutions. Its strong treasury services, including risk management and currency exchange, alongside comprehensive digital banking, make it a valuable partner for businesses aiming for sustainable growth.

ProCredit Bank

ProCredit Bank focuses on SMEs, offering transparent business accounts, investment loans, and green financing options. Its commitment to sustainability and streamlined digital services supports small businesses in achieving financial security while contributing to environmentally responsible practices.

TBI Bank

TBI Bank specialises in consumer and SME financing, delivering quick and flexible business loans. Its competitive deposit products and efficient online loan applications are ideal for small businesses seeking accessible financing and straightforward banking services with minimal administrative hurdles.

Critical Requirements for Opening a Business Account in Bulgaria

Opening a business account in Bulgaria involves meeting several documentation and compliance requirements. These depend on whether the account is for a Bulgarian entity or a foreign business owner.

For Foreign Business Owners

Foreign business owners face additional scrutiny when opening a business account in Bulgaria. Typical requirements include:

• A valid passport or national ID.
• A Bulgarian residency card, may be mandatory for company directors in some cases.
• Proof of address, either in Bulgaria or the home country of the business owner.

For Bulgarian Entities

Businesses registered in Bulgaria need to present specific documentation, such as:

• Articles of Association outlining the company’s structure and purpose.
• A certificate of good standing from the Bulgarian Commercial Register.
• Tax registration certificates, especially if the company is VAT-registered.

Other Documents

Banks may request additional paperwork depending on the nature of the business or the bank’s internal policies. These may include:

• Notarised documents.
• Signatures of all company directors and shareholders.
• Proof of the source of initial deposits, especially for larger amounts.

Steps to Open a Business Account in Bulgaria

The process of opening a business account in Bulgaria can be broken down into clear steps to ensure a smooth experience:

Step 1: Research and Choose a Bank

The first step is selecting a bank that meets your business needs. Factors to consider include:

• Banking fees and service charges.
• Availability of English-speaking staff for more accessible communication.
• Online banking tools and security measures.
• Reputation and customer reviews.

Top banks in Bulgaria include UniCredit Bulbank, DSK Bank, and First Investment Bank. These institutions have a strong presence and offer tailored services for business clients.

Step 2: Prepare the Required Documents

Gathering the necessary documentation is crucial. These should be prepared in advance and, if required, translated into Bulgarian. Using certified translators ensures that documents meet legal and banking requirements.

Step 3: Open a Deposit Account (if Required)

Before fully opening a business account, some banks may require you to set up a temporary deposit account. This account holds the initial share capital needed to register the company officially. For LLCs, the minimum is 2 BGN, while JSCs need 50,000 BGN.

Step 4: Visit the Bank

Usually, the company director or an authorised representative must visit the bank in person. This step is necessary for submitting documents, verifying identity, and completing the account-opening forms. Some banks may offer appointment services to reduce waiting times.

Step 5: Finalise the Account Setup

Once the bank processes your application and verifies all documents, they will activate your business account. You will receive:

• Online banking credentials.
• Debit cards linked to the account.
• Additional banking tools, such as multi-currency wallets.

Time Taken to Open a Business Account in Bulgaria

The timeline may vary depending on the bank’s internal processes, the completeness of the documentation, and the applicant’s residency status. It’s advisable to consult directly with the bank to ensure all requirements are met efficiently.

Comparison of Banks Providing Business Account Options in Bulgaria

Note: The monthly maintenance fees are approximate and can vary based on the selected account type and services. For the most accurate and up-to-date information, consulting directly with the banks is advisable.

Legal and Tax Implications of a Business Account in Bulgaria

Opening a business account in Bulgaria entails several legal and tax considerations essential for compliance and efficient financial management.

Legal Implications

Company Registration

Your company must be registered with the Bulgarian Commercial Register to open a business account. This process involves submitting the Articles of Association and obtaining a Certificate of Incorporation.

Anti-Money Laundering (AML) Compliance

Bulgarian banks adhere to strict AML regulations. They require detailed information about the company’s ownership structure, the source of funds, and the nature of business activities. Providing accurate and complete information is crucial to avoid delays or account rejection.

Residency Requirements

As of August 1, 2019, Bulgarian banks generally require company representatives to hold Bulgarian residency to open a business account. This policy aims to enhance due diligence and compliance with local regulations.

Tax Implications

Corporate Income Tax

Bulgaria offers a flat corporate tax rate of 10%, one of the lowest in the European Union. This rate applies to the taxable profits of resident and non-resident companies operating through a permanent establishment in Bulgaria.

Withholding Taxes

Certain payments to non-residents, such as dividends, interest, and royalties, are subject to withholding tax. The standard rate is 5% for dividends and 10% for interest and royalties, though these rates can be reduced under applicable double taxation treaties.

Value Added Tax (VAT)

The standard VAT rate in Bulgaria is 20%. Businesses with an annual taxable turnover exceeding BGN 50,000 must register for VAT. Maintaining a business account facilitates the proper management of VAT obligations, including collecting and remittance of VAT to the National Revenue Agency.

Financial Reporting

Bulgarian companies are obligated to prepare and file annual financial statements and corporate tax returns, which must be submitted to the National Revenue Agency and the Commercial Register. Accurate financial records, supported by a business account, are essential for compliance and to avoid penalties.

Challenges and Tips for Non-Residents

Foreign business owners face unique challenges when opening a business account in Bulgaria.

Residency Requirements

Banks often require company directors to hold a Bulgarian residency card, which can complicate the process for non-residents. Working with local legal advisors can simplify obtaining residency documentation.

Language Barriers

While many Bulgarian banks have English-speaking staff, not all do. To overcome this, choose a bank with multilingual support or bring a translator during meetings.

Bank Refusal Scenarios

Banks may refuse to open an account if due diligence requirements aren’t met. This situation often arises from incomplete documentation or an unclear business structure. Having notarised and well-organised documents reduces the likelihood of refusal.

Alternative Banking Solutions for Foreign Entrepreneurs

For entrepreneurs unable to meet the requirements of traditional Bulgarian banks, alternative banking solutions offer flexibility:

Fintech Platforms

Platforms like Wise and Revolut provide business accounts tailored for international operations. Their advantages include:

• Multi-currency accounts for global transactions.
• Transparent fees and real exchange rates.
• Quick and straightforward account setup processes.

Virtual Banks in Bulgaria

Some virtual banks and payment providers in Bulgaria cater to startups and small businesses. These institutions often have fewer requirements, making them accessible to non-residents or smaller enterprises.

Tips for Smooth Account Opening

Engage a Local Consultant

Hiring a local consultant experienced in Bulgarian banking laws can significantly streamline the process. These professionals assist with document preparation, translations, and navigating regulatory requirements.

Plan for In-Person Visits

Physical presence is often mandatory when opening a business account. Ensure you or your representative can visit the chosen bank for timely delivery.

Maintain Transparent Documentation

Having accurate and complete documentation reduces the chances of rejection. Ensure all documents are up-to-date, notarised, and translated as the bank requires.

Common Mistakes to Avoid

Incomplete Paperwork

Submitting incomplete or incorrect documentation is a standard error that delays account setup. Carefully review all requirements and prepare additional documents if requested.

Not Understanding Local Regulations

Bulgaria has stringent financial regulations, including compliance with Anti-Money Laundering (AML) laws. Failing to meet these standards can lead to account closure or legal issues.

Choosing the Wrong Bank

Each bank in Bulgaria has its policies, fees, and services. Selecting a bank that does not align with your business needs can lead to inefficiencies and higher costs.

FAQs

Can a foreigner open a bank account in Bulgaria?

Yes, a foreigner can open a bank account in Bulgaria. Banks usually require identification, proof of address, and sometimes a reference letter. Additional documentation, such as visa details or work permits, may be needed for non-residents.

Can a foreigner start a business in Bulgaria?

Foreigners can start a business in Bulgaria with no restrictions. They must register the company with the Commercial Register and provide the necessary documents, including proof of identity and a company address. Legal assistance is often recommended.

How much does it cost to start a business in Bulgaria?

Starting a business in Bulgaria costs approximately €50–€500, depending on the type of business. This includes registration fees and capital requirements. Based on the company, additional costs for legal assistance, tax registrations, and permits may apply.

What is the most accessible country in which to open a business account?

Countries like Estonia, Singapore, and Cyprus are known for their streamlined processes and minimal paperwork. Estonia, for instance, offers an e-residency program, enabling digital access to banking services without physical presence requirements.

Which country is the best for doing business as a foreigner?

Singapore, the United States, and the UAE are famous for foreigners due to solid legal frameworks, low taxes, and supportive policies. The choice depends on industry, location preferences, and ease of obtaining residency or work permits.