130 | Investment in Bulgaria 2017 Investment in Bulgaria 2017 KPMG in Bulgaria kpmg.com/bg Investment in Bulgaria Edition 2017 Investment in Bulgaria 2017 | 3 Preface Investment in Bulgaria is one of a series of booklets published by firms within the KPMG network to provide information to those considering investing or doing business internationally. Every care has been taken to ensure that the information presented in this publication is correct and reflects the situation as of May 2017 unless otherwise stated. Its purpose is to provide general guidelines on investment and business in Bulgaria. As the economic situation is undergoing rapid change, further advice should be sought before making any specific decisions. For further information on matters discussed in this publication, please contact Gergana Mantarkova, Managing Partner. KPMG in Bulgaria Sofia Varna Burgas 45/A Bulgaria Boulevard 3 Sofia Street, floor 2 2B Serdika Street, floor 2 1404 Sofia 9000 Varna 8000 Burgas Bulgaria Bulgaria Bulgaria Tel: +359 2 96 97 300 Tel: +359 52 699 650 Tel: +359 56 826 086 Fax: +359 2 96 97 878 Fax: +359 52 611 502 Fax: +359 2 96 97 878 [email protected] kpmg.com/bg 4 | Investment in Bulgaria 2017 Contents General Information .......................................................................................................... 7 Population and language ...........................................................................................................7 Infrastructure .............................................................................................................................7 Internet .................................................................................................................................... 11 Currency ..................................................................................................................................12 Labor force ..............................................................................................................................12 Political system........................................................................................................................12 Opportunities created via EU funding .....................................................................................13 Bulgaria and NATO ..................................................................................................................14 Economy .................................................................................................................................14 Restrictions with regard to offshore companies .....................................................................16 Opportunities for International Investors .......................................................................18 Protection and promotion of foreign investments ..................................................................18 Eligibility for investment incentives.........................................................................................21 Profit and capital repatriation ..................................................................................................22 Establishment of new business entities or acquisition of shares in existing entities........................................................................................................22 Branches .................................................................................................................................23 Representative offices ............................................................................................................23 Capital markets .......................................................................................................................23 Concessions ............................................................................................................................24 Licensing .................................................................................................................................24 Renewable energy ..................................................................................................................26 Banking and finance ................................................................................................................28 © 2017 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Investment in Bulgaria 2017 | 5 Company Law .................................................................................................................. 30 Rules applicable to all forms of business association .............................................................30 Limited liability company (OOD) .............................................................................................34 Joint-stock company (AD) .......................................................................................................36 Other forms of business association ......................................................................................39 Commercial Register ..............................................................................................................40 Real Estate ....................................................................................................................... 42 Types of ownership over real estate .......................................................................................42 Condominium ownership management .................................................................................43 Evidence of title ......................................................................................................................43 Acquisition of real estate ........................................................................................................44 Project development ...............................................................................................................45 Participants in the development process ................................................................................48 Accounting and Auditing ................................................................................................ 52 Accounting ..............................................................................................................................52 Auditing and reporting .............................................................................................................56 Taxation ............................................................................................................................ 60 Corporate tax ...........................................................................................................................60 Taxation of individuals .............................................................................................................70 EU social security ....................................................................................................................75 Property transfer, gift, inheritance and tourist taxes ...............................................................76 Value added tax .......................................................................................................................77 Customs duties .......................................................................................................................88 Excise duties ...........................................................................................................................90 Insurance Premium Tax (IPT) ...................................................................................................91 Employment Regulations ............................................................................................... 92 Legislation ...............................................................................................................................92 Employment contracts ............................................................................................................92 Working hours .........................................................................................................................94 © 2017 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 6 | Investment in Bulgaria 2017 Holidays ...................................................................................................................................94 Medical check-ups ...................................................................................................................95 Healthy and safe working conditions ......................................................................................95 Posting or sending of employees from Bulgaria to EU/EEA/Switzerland in the framework of provision of services ..............................................................................96 Termination of employment contracts ....................................................................................96 Foreign nationals working in Bulgaria .....................................................................................97 Foreign Nationals ...........................................................................................................