Contribution of Receivables to Company Capital in Bulgaria

What is an in-kind contribution and when is it used

An in-kind contribution (aport) is the transfer of non-cash assets into the capital of a commercial company. The legal framework is set out in Art. 72–73a of the Commercial Act (CA).

In-kind contributions apply in two scenarios:

1. At incorporation — when a founder wishes to contribute assets instead of (or in addition to) a cash contribution;
2. At capital increase — when an existing company wishes to increase its capital through an asset contribution from a partner.

When contributing a receivable makes sense

• Converting a shareholder loan — if you have lent money to your EOOD/OOD and wish to convert the loan into equity rather than demand repayment;
• Converting additional cash contributions — unreturned additional cash contributions under Art. 134 CA can also be contributed as in-kind contributions;
• Capitalising dividends — when the company has accrued but not paid dividends;
• Third-party receivables — if a partner holds a receivable from a third party and wishes to contribute it to the company’s capital.

Types of non-cash contributions

Note: Future labour or future services cannot be the subject of an in-kind contribution — they do not have a present assessable monetary value.

Step-by-step procedure

Step 1: Prepare documents evidencing the receivable

Assemble the documents proving the existence and amount of the receivable: loan agreement, accounting records, bank statements, correspondence with the debtor, repayment schedule (if applicable), company balance sheet.

Step 2: Request the Registry Agency to appoint experts

File an application with the Registry Agency for the appointment of 3 independent court-appointed experts to value the non-cash contribution.

Step 3: Expert valuation (14-day deadline)

The experts prepare their valuation within 14 days (Art. 72(3) CA). The report includes a full description, valuation method, and assessed value in EUR.

Step 4: General Assembly resolution (or sole owner decision)

For OOD: General Assembly resolution with a majority of more than 3/4 of the capital (Art. 137(1)(4) CA). For EOOD: decision of the sole owner with notarised signature.

Key rule (Art. 72(5) CA): The value of the equity interests issued against the non-cash contribution may not exceed the expert valuation.

Step 5: Notification to the debtor

An in-kind contribution of a receivable has the effect of an assignment (Art. 73 CA). The debtor must be notified of the transfer (Art. 99–100 OCA).

Step 6: File with the Commercial Register

File Form A4 with the Registry Agency, accompanied by: expert valuation report, GA resolution/sole owner decision, amended articles, notification to debtor, declaration under Art. 13(4), and proof of paid fee.

State fee: EUR 15.34 (electronic) or EUR 20.45 (paper).

Step 7: Registration

From the moment of registration, the receivable passes to the company’s assets, and the contributor acquires equity interests.

Expert valuation (Art. 72 CA)

The expert valuation is a mandatory and critical stage. Without it, the in-kind contribution is invalid.

What is assessed for receivables

• Nominal value — principal and accrued interest;
• Collectibility — the debtor’s financial condition, existence of security, limitation periods;
• Documentary basis — existence of a written agreement, bank statements, accounting records;
• Liquidity — how easily the receivable can be converted into cash.

Value rule

The expert valuation determines the maximum amount of equity interests that may be issued (Art. 72(5) CA). The difference between the valuation and the issued interests remains in the company as a reserve.

Tax treatment (VAT, CITA, PITA)

VAT — not a supply

Under Art. 10(1)(1) of the VAT Act (ZDDS), a non-cash contribution is not a supply for VAT purposes. No VAT is charged on the contribution.

CITA — continuity of tax values

The rules of Art. 140–142 of the Corporate Income Tax Act (ZKPO) apply. The receiving company records the asset at the experts’ tax value. The principle of continuity of tax values applies.

PITA — no tax at the time of contribution

When a natural person makes an in-kind contribution, no tax is due under the PITA at the time of contribution. A taxable event arises only upon subsequent disposal of the acquired equity interests (10 % on the capital gain).

Contributor’s liability (Art. 73a CA)

If the contributed receivable proves uncollectible, the contributor is liable for its collection. The liability is strict and limited to the amount of the issued equity interests.

Special case: receivable owed by the company itself

When you contribute a receivable owed by the company itself (e.g., a loan to your EOOD), the receivable and the liability are consolidated (confusio). Liability under Art. 73a CA is largely theoretical in this case.

Practical case studies

Case 1: Shareholder loan converted into capital

Situation: Ivan is the sole owner of an EOOD. In 2024, he extended a loan of EUR 30,000 to the company. In 2026, he wishes to convert the loan into capital.

Steps: Request appointment of 3 experts → valuation at EUR 30,000 → sole owner decision → notification (formality) → Form A4 filing → registration. Tax consequences: no VAT, no PITA at contribution, loan obligation extinguished.

Case 2: Converting additional cash contributions into capital

Situation: An OOD with two partners (50/50) received EUR 40,000 total in additional cash contributions. The repayment deadline is approaching but the company lacks liquidity.

Result: Capital increased by EUR 40,000, additional cash contribution liabilities extinguished.

Case 3: Contributing a third-party receivable

Situation: Peter holds a receivable of EUR 15,000 from “Alpha” EOOD and contributes it to “Beta” OOD’s capital.

Risk: If Alpha fails to pay, Peter is liable under Art. 73a CA for collection of the receivable.

Frequently asked questions

Conclusion

Contributing a receivable is an effective tool for capitalising funds already provided — loans, additional cash contributions, or trade receivables. It allows the company to strengthen its capital base without the need for new financing, while remaining tax-neutral.

The Innovires Legal team can assist you with document preparation, coordination with the experts and the Registry Agency, and registration in the Commercial Register. Contact us for a consultation.

This article is for informational purposes only and does not constitute legal advice. The information is current as of 26 March 2026.