Branch Registration for Foreign Companies in Bulgaria (2026)

Introduction

When a foreign company wishes to expand its operations to the Bulgarian market, it has several options — establishing a subsidiary (EOOD or OOD), registering a branch, or operating through a representative office. Each of these forms has distinct legal, tax, and operational characteristics that determine which is most suitable for a given situation.

This article provides a detailed guide for foreign investors on registering a branch of a foreign company in Bulgaria. It covers the applicable legal framework, required documents, fees, and practical considerations. Special attention is given to the comparison between a branch and a subsidiary (EOOD), which is critical for making the right choice of organizational form.

Legal Framework

Applicable Legislation

The registration and operation of branches of foreign companies in Bulgaria are governed by:

• Art. 17a–20 of the Commerce Act (CA) — principal provisions on branches
• Commercial Register and Register of Non-Profit Legal Entities Act (CRRNPLEA) — registration procedure
• Ordinance No. 1 of 14.02.2007 — requirements for applications and attachments

Legal Status of a Branch

A branch of a foreign company is not an independent legal entity. It is a legally distinct part of the foreign company that conducts commercial activity in Bulgaria on behalf of and for the account of the foreign trader. This legal characteristic has several important consequences:

• The foreign company bears unlimited liability for the obligations assumed by the branch.
• The branch does not possess its own capital in the legal sense.
• The branch cannot independently participate in court proceedings as a party — the foreign company, acting through its branch, is the plaintiff or defendant.
• The branch has no corporate governance bodies of its own — it is managed by a manager authorized by the foreign company.

Despite the lack of independent legal personality, the branch receives its own UIC (Unified Identification Code) in the Commercial Register and can conduct full commercial activity, including hiring employees, entering into contracts, and issuing invoices.

Key Advantages of a Branch

Tax Efficiency on Profit Repatriation

The primary tax advantage of a branch over a subsidiary is the absence of withholding tax (dividend tax) when repatriating profits. When a subsidiary (EOOD) distributes dividends to its foreign parent, a 5 % withholding tax typically applies (or a lower rate under an applicable Double Tax Treaty). With a branch, the profit is directly the profit of the foreign company, and its transfer to the head office is not treated as a dividend distribution.

The corporate tax rate remains 10 % — the same for both branches and subsidiaries.

Simplified Management Structure

The branch is managed by a manager appointed by the foreign company. There is no need to establish separate governance bodies (general meeting, board of directors, etc.), which simplifies administrative processes.

Faster Setup

Branch registration is faster than incorporating an EOOD because it does not require determining share capital, opening an accumulation account, or depositing capital.

Unified Accounting

The branch’s operations are included in the consolidated financial statements of the foreign company, which may simplify reporting for multinational groups.

Branch vs. EOOD (Subsidiary) — Comparison Table

Step-by-Step Registration Procedure

Step 1: Resolution to Open a Branch

The competent body of the foreign company (typically the general meeting of shareholders or the board of directors) adopts a resolution to open a branch in Bulgaria. The resolution should contain:

• Name and identification data of the foreign company
• Decision to open a branch in the Republic of Bulgaria
• Registered office and management address of the branch
• Scope of activity of the branch
• Appointment of a branch manager and the scope of their representative power

Step 2: Document Preparation and Legalization

Documents from the foreign company:

• Current extract from the commercial register (or equivalent document) in the company’s country of origin
• Articles of association (memorandum, articles of incorporation) of the foreign company
• Resolution of the competent body to open a branch
• Power of attorney for the branch manager (if the manager is not a legal representative of the company)

Legalization: For countries that have ratified the 1961 Hague Convention, documents are certified with an apostille. For other countries, full consular legalization is required. All documents in a foreign language must be translated into Bulgarian by a sworn translator, and the translation must be certified by the Ministry of Foreign Affairs.

Documents prepared in Bulgaria:

• Application form A8 for registration in the Commercial Register
• Declaration under Art. 13(4) of the CRRNPLEA
• Declaration under Art. 13(5) of the CRRNPLEA (truthfulness of declared circumstances)
• Notarially certified specimen of the branch manager’s signature
• Proof of payment of the state fee

Step 3: Filing with the Commercial Register

The application for branch registration is filed using form A8 with the Commercial Register at the Registry Agency. Filing can be done:

• Electronically — through the Commercial Register portal, using a qualified electronic signature (recommended — lower fee)
• On paper — at the regional offices of the Registry Agency

The state fee for electronic filing is EUR 86.92.

Step 4: Review and Registration

The Registry Agency reviews the application within 3–7 business days. If deficiencies are found, instructions for rectification are issued with a 3-day deadline.

Upon successful registration, the branch receives its own UIC and may commence operations.

Step 5: Post-Registration Actions

After registration in the Commercial Register, the following additional steps are required:

• NRA registration — the branch must be registered for tax purposes
• VAT registration — mandatory when turnover reaches EUR 51,130 within a calendar year (Art. 96 VATA, effective from 01.01.2026), or voluntary
• Bank account opening — at a Bulgarian bank
• Registration as an employer — if the branch will hire employees
• Labour Inspectorate registration — when hiring employees
• Accounting services — the branch must maintain accounting records and file annual financial statements

Tax Regime

Corporate Tax

The branch is subject to corporate income tax at a rate of 10 % on profits generated from its activities in Bulgaria. The Corporate Income Tax Act (CITA) applies, as well as the relevant Double Tax Treaty (DTT), if one is in force.

Profit Repatriation — No Withholding Tax

The key tax advantage: no withholding tax is due when transferring profits from the branch to the head office. Since the branch is not a separate legal entity, its profit is directly the profit of the foreign company. The transfer of funds is not treated as a dividend distribution.

By comparison, a subsidiary (EOOD/OOD) distributing dividends to its foreign owner is subject to 5 % withholding tax (Art. 194 CITA), which may be reduced under an applicable DTT.

VAT

The branch is subject to VAT registration under the same conditions as domestic companies — mandatory at turnover of EUR 51,130 within a calendar year (Art. 96 VATA, effective from 01.01.2026), or voluntary. The standard VAT rate is 20 %.

Transfer Pricing

Since the branch is part of the foreign company, transactions between the branch and the head office are subject to transfer pricing rules. Intra-group transactions must be at arm’s length prices, and transfer pricing documentation must be maintained.

Management and Representation

Branch Manager

The branch manager is appointed by the foreign company and registered in the Commercial Register. The manager acts on behalf of and for the account of the foreign company within the scope of the representative power granted.

The manager may be:

• A Bulgarian citizen
• A foreign citizen (with or without a residence permit in Bulgaria)
• A legal representative of the foreign company

When appointing a foreign citizen as manager, the requirements of the Foreigners in the Republic of Bulgaria Act and the Labour Migration and Labour Mobility Act must be observed if the manager will reside and work in Bulgaria.

Limitations on Representative Power

The scope of the manager’s representative power is defined in the power of attorney issued by the foreign company and is recorded in the Commercial Register. Limitations on representative power recorded in the Commercial Register are enforceable against third parties.

Annual Obligations

The branch must annually:

• Prepare and publish annual financial statements in the Commercial Register
• File an annual corporate tax return (Art. 92 CITA)
• File monthly VAT returns (if VAT-registered)
• File monthly social security declarations (if employees are hired)
• Publish the annual financial statements of the foreign parent company (translated into Bulgarian)

Closing a Branch

A branch may be de-registered from the Commercial Register by resolution of the foreign company. The de-registration procedure is significantly simpler than liquidating a subsidiary and includes:

• Resolution of the foreign company to close the branch
• Settlement of all branch obligations
• NRA notification and obtaining an Art. 77 DOPK certificate
• Filing a de-registration application with the Commercial Register

De-registration does not involve a formal liquidation procedure with appointment of a liquidator and publication of a call to creditors, which is a significant advantage over closing an EOOD.

Practical Considerations for Foreign Investors

When a Branch Is Preferable to an EOOD

• When the primary objective is tax optimization on profit repatriation (no dividend tax)
• When the foreign company wants direct control over Bulgarian operations
• When liability limitation is not essential (activity does not involve high commercial risk)
• When a temporary market presence in Bulgaria is planned

When an EOOD Is Preferable to a Branch

• When liability limitation is necessary for the foreign investor
• When Bulgarian operations involve high commercial or legal risk
• When local partners or investors may be brought in
• When the foreign company seeks legal separation of Bulgarian operations

Banking

In practice, some Bulgarian banks may impose additional requirements when opening an account for a branch, including requiring the personal presence of the foreign company’s legal representative. It is advisable to clarify the chosen bank’s requirements in advance.

Hiring Employees

The branch may hire employees under employment contracts governed by the Bulgarian Labour Code. Social security contributions are due under Bulgarian law. When hiring non-EU foreign nationals, a work permit is required.

Frequently Asked Questions

Conclusion

Registering a branch of a foreign company in Bulgaria is an attractive alternative to establishing a subsidiary, particularly when tax efficiency on profit repatriation is a priority. The key advantages include the absence of withholding tax on profit transfers, a simpler management structure, and a faster de-registration process.

At the same time, the risks must be carefully weighed — notably the unlimited liability of the foreign company for branch obligations and the more complex document legalization requirements. The choice between a branch and an EOOD depends on the specific circumstances, strategic objectives, and tax planning of the foreign investor.

If you need assistance with branch registration, the team at Innovires Legal can guide you through the entire process — from document preparation to post-registration actions. Contact us for a consultation.

This article is for informational purposes only and does not constitute legal advice. For specific questions regarding branch registration for foreign companies in Bulgaria, please consult a qualified lawyer.