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Closing a Bulgarian Limited Company

As the Bulgarian law still states that foreign passport holders cannot own Bulgarian soil directly, many owners of Bulgarian houses and land own their assets through a Bulgarian limited company. It acts as a legal vehicle to entitle foreigners to indirect ownership; they are the sole shareholder and director, they own the company and the company owns the property.

 

Like any limited company, it must report to the state each year, comply with regulations changes, submit annual accounts (even if a nil return), each of which costs time and money. Most often these need to be done by a third party such as NewEstate, an accountant or solicitor etc and so annual costs can rack up for owners. This can be especially frustrating if you have recently sold your assets and the company no longer owns anything, thus has become an unnecessary burden and cost.

 

Why not just abandon a Bulgarian company when it is no longer needed?

 

Some owners abandon their companies and cease to maintain their responsibilities as directors by simply forgetting it exists. However, the system does not forget and the fines will only add up year on year, which in many cases are 1000 euros / year for those who fail to submit their accounts. Sadly it does not matter if the company is Mircosoft or your non trading holiday home owning vehicle that has no bank account, no activity and no turnover, the state regards them as the same as the director’s responsibilities are the same.

 

If you are considering abandoning your company without officially terminating your ownership, please read this article. For those who are considering closing their company and properly concluding all matters and responsibilities, please see below.

 

How to close your Bulgarian company:

 

In the UK you can close a company within days, as long as it is in good standing and fully up to date a £15 application to the registrar at Companies House will be all that is needed to have it struck from the register and your responsibilities terminated. Not so in Bulgaria. Closing a Bulgarian limited company is a time consuming and expensive process, in short the state requires that the directors prove that they do not owe anything to anyone. Proving you have not done something is a little like being assumed guilty before being proven innocent, it is a laborious task for a joint team of solicitor and accountant to get concluded. It will take around 6 months and there are substantial costs involved.

 

However, it is not all bad news. There are many ways in which your responsibility can be terminated and concluded, not all of them obvious and some are very creative. Your exact solution will largely depend on the structure of the company, the number of owners, the age of the company, if it has any existing fines or other liabilities, if it has made a loss or a profit, has claimed any VAT or is due to etc. Any combination of these variables can change the process and reduce the costs and time involved. There is no fixed single solution, each company must be considered on its own merits on a case by case basis.

 

NewEstate is able to offer innovative, creative and cost effective solutions to help owners who wish to close their Bulgarian companies for the least amount of hassle and financial outlay. Please contact us directly to discuss your case.

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