The tide of startup culture is growing worldwide, and it didn't take long for it to grab hold in Bulgaria. If you are considering starting your own business and being self-employed in Bulgaria, we've got you covered. In this article, we'll help you understand the process of setting up.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in Bulgaria
The sole proprietorship (Едноличен Търговец) is the easiest way to set up your business and start offering services to clients as an independent contractor. It is one of the legal forms regulated by the Bulgarian commercial law that allows a person to be self-employed and exercise a freelance activity. The sole proprietor has commercial characteristics attributed by law without being a legal entity.
Sole proprietorship according to Bulgarian Commercial Law
A sole proprietor (art. 56 and following TK) can be any natural person residing in the country, regardless of their citizenship. To register, foreign citizens and people with dual nationality need to have a permanent residence permit in Bulgaria. A person can only register one business as a sole proprietorship. The sole proprietor is fully liable for the company's debts and can benefit from the full profits it generates. In the case of liquidation or bankruptcy, the sole proprietor doesn't have separated liability from the business; therefore, his/her personal assets can be affected by it.
Registration in the Commercial Register
Even though you are not creating a legal entity, you will need to sign into the commercial register at the Registry Agency of the Bulgarian Ministry of Justice.
Any Bulgarian citizen or foreign national with residence in the Republic of Bulgaria can register as a sole proprietor in the Commercial Register. The registration as a sole proprietor is impossible for specific categories of people, such as a person in the bankruptcy process or an insolvent whose rights haven't been reinstated. The fee you have to pay for the Commercial Register amounts to BGN 30 (BGN 15 if you submit the application form through the Agency's website electronically with qualified electronic signature).
The process is reasonably simple: in the Commercial Register, you submit an application form (A1 form) that states the sole proprietor's name and personal ID number. Some business activities may be subject to a special regime. In that case, the application must include educational or qualification certification, or the relevant license/permit. You must also submit a declaration proving the sole proprietor is neither in bankruptcy nor deprived of the right to engage in business. Finally, you sign a statement confirming you don't have another sole proprietor entity registered to your name.
You can submit the application in person in a division of the Registry Agency, or through the Agency's website electronically. If you need help filling out any of these documents, it's best to look for legal advice.
Choosing the Business Name
An essential step in registering as a sole proprietor is to choose the name your business will bear. Sole proprietors in Bulgaria can freely choose the business's name if it doesn't mislead and prejudice public morality. According to the Commercial Bulgarian law, the name of the sole proprietorship must contain the founder's first and last name, without abbreviations.