Company registration in Bulgaria – 100% fully remote procedure

In Bulgaria, business structures are carefully regulated to provide various options for entrepreneurs, each with its distinct characteristics and benefits. One such business structure is the Variable Capital Company or also known in Bulgarian shortly as DPK. This type of company is relatively less known than the traditional companies. It is still a limited liability company, but it offers unique features that may be appealing to certain types of businesses.

This article aims to provide a detailed explanation of the Variable Capital Company in Bulgaria, its legal framework, characteristics, advantages, and the process of its establishment.

What is Variable Capital Company (DPK) – a new type of limited liability company in Bulgaria?

A Variable Capital Company (DPK) ?is a type of company that allows flexibility in the capital structure. Unlike other companies in Bulgaria, where the capital is fixed and must remain constant, a DPK allows for the capital to vary, meaning shareholders can increase or decrease the company’s capital as needed, without going through a complex procedure of amending the company’s articles of association. This flexibility is particularly attractive for businesses with fluctuating capital needs or those operating in industries requiring frequent adjustments to their funding.

The concept of a DPK is similar to that of a mutual fund or investment fund, where the amount of capital can change depending on the number of shares issued or repurchased. However, a DPK is still a business entity with a specific legal structure, and it is not solely focused on investment.

Key Characteristics and Advantages of Variable Capital Company (DPK)

Registration process is 100% remotely / from a distance:

1. The company registration can be done entirely remotely / from a distance without the need to come to Bulgaria as there is no need to deposit a capital amount in a bank account. Only the director’s consent form and signature specimen needs to be notarized by a public notary in your country or at the nearest Bulgarian Embassy / Consulate.

Variable Capital:

1. The key characteristic of this type of company is the flexibility in capital structure. The capital can be adjusted according to the business’s needs.
2. Capital can be raised or reduced by issuing or buying back shares, without the need for a notary or registration with the Commercial Register for every change. This provides quick flexibility for raising funds or adjusting the company’s size.

Shareholders’ Liability:

1. The liability of the shareholders is limited to the amount of their contribution to the capital of the company. In this sense, the structure is similar to the Limited Liability Company (LLC).
2. Shareholders’ personal assets are not at risk, except to the extent of their investment in the company.

Management:

1. A DPK is typically managed by a board of directors or a sole director, depending on its Articles of association. The management structure can be more flexible than in a traditional LLC, allowing for more customized governance.
2. The directors can make decisions about capital changes, share issuance, and other key aspects of the business without needing approval from the entire shareholder body every time.
3. After the company is setup it can be managed remotely and your Bulgarian lawyer and accountant can do it based on Power of Attorney from you.

Simple Share Transfer:

1. The DPK allows for the transfer of shares without excessive formalities, and the internal regulations of the company can define specific rules for such transfers, providing a level of flexibility that is useful in business transactions or investment opportunities.

Very beneficial for foreigners:

1. You can have a company in Bulgaria, a member of the EU, with one of the lowest tax rates. The company can be registered 100% remotely and from a distance and it can be also managed this way. It will save you much time and efforts.

Our services

• We provide consulting and guidance in the whole process of your company registration.
• We prepare all of the necessary documents (bilingual in Bulgarian and English) – all documents just need to be signed by you and only one of them – the director’s consent form and signature specimen needs to be notarized by a public notary in your country or at the nearest Bulgarian Embassy / Consulate.
• Based on a Power of Attorney we will register the company at the Bulgarian Commercial Registry, which is the final step at the company registration procedure. You will receive a company identification number.
• Additional services: VAT registration and VAT number, EORI registration, registered address, accounting and payroll services.
• Timeframe: company registration can be done within 1 week and VAT registration can take up to 2 weeks.

Conclusion

The Variable Capital Company (DPK) is a unique business structure in Bulgaria, offering significant flexibility in terms of capital management, share issuance, and shareholder rights. It is particularly useful for businesses with fluctuating capital requirements such as startups or investment funds. By allowing for easier adjustment of capital and simplified governance, the DPK can be an attractive option for entrepreneurs seeking a dynamic business model.

If you are considering this type of company for your business, it is important to consult with a lawyer to ensure that this structure aligns with your goals and complies with all legal requirements.