Branch of a Bulgarian Company — When and How to Open a Regional Branch (2026)

What is a commercial branch

The legal framework for a commercial branch is set out in Articles 17–20 of the Bulgarian Commerce Act. A branch is a segregated part of the parent company's commercial enterprise, located in a place other than the seat of the merchant. Despite its organisational autonomy, a branch is not a separate legal entity — it is a structural unit through which the company conducts business at a particular location.

This principle has several practical consequences:

• Contracts concluded in the name of the branch are contracts of the company itself. The counterparty may seek performance either from the branch or directly from the seat of the merchant.
• A branch cannot be sued in its own right, but claims arising from the branch's transactions may also be filed at the branch's seat — this is a procedural convenience, not a sign of separate legal personality.
• Liability for the branch's obligations always rests with the parent company and its entire assets.

Still, a branch has one feature that brings it close to an independent operating unit: its own commercial books. Under Article 19 of the Commerce Act the branch keeps its own books reflecting the transactions it carries out. However, this does not mean a separate balance sheet — the annual financial statements are prepared on a consolidated basis by the parent company and cover the activity of all branches.

When it is registered in the Commercial Register, the branch receives its own UIC (unique identification code), different from that of the parent company. Under this UIC it is identified before banks, the National Revenue Agency (NRA), suppliers and counterparties, even though it is legally part of one and the same legal entity.

Key rules of the branch structure

Number of branches

The Commerce Act does not cap the total number of branches a company can open. A nationwide business can build a network of dozens of branches — one in each city in which it operates.

One branch per locality

The limitation is territorial: a merchant can have only one branch per locality. The restriction has a practical rationale — a branch is designed for local presence, and duplicating it in the same place would serve no purpose in a public register.

Exception — banks and insurers

For banks and insurance companies the legislator makes a principled exception. These entities may have more than one branch in the same locality, including at the seat of their head office. The reason is operational: a bank's network of offices and branches is the very face of its business and is incompatible with a "one branch per city" rule.

Registration in the Commercial Register

The branch comes into existence upon its entry in the Commercial Register at the Registry Agency. The application is filed by the parent company and follows the standard procedure for merchants — electronically with a qualified electronic signature or on paper at the Registry Agency's regional offices.

Which companies can open a branch

The right to open a branch is recognised for all merchants within the meaning of the Commerce Act. This includes:

• Sole trader (ET) — although a sole trader is not a separate legal entity, they are a merchant under the Commerce Act and may open a branch.
• Single-member limited liability company (EOOD) and Limited liability company (OOD) — by far the most frequent clients for branch registration in our practice.
• Joint-stock company (AD) and Single-member joint-stock company (EAD) — particularly for banks, insurers and large retail chains.
• General partnership (SD), Limited partnership (KD) and Limited partnership with shares (KDA).

In practice, the branch structure is most common for OOD/EOOD and AD companies, since these are the forms where there is real benefit from establishing a local representation with its own UIC and manager.

Name of the branch

The name of the branch is formed in a standard way: company name + the word "branch" + locality. The branch cannot bear a freely chosen name different from the parent company — the goal is transparency of the register and clarity for third parties.

Examples:

• "Innovires Legal EOOD — Varna branch"
• "Alfa Logistics OOD — Burgas branch"
• "Beta Retail AD — Plovdiv branch"

Specifying the locality is essentially mandatory, because the "one branch per city" restriction must be unambiguously traceable in the Commercial Register.

Subject of activity of the branch

The branch's subject of activity always falls within the scope of activity of the parent company. A branch cannot carry out activities that the parent company itself has not registered — it would be a legal absurdity for a structural unit to exceed the scope of the merchant itself.

Importantly, however, the branch scope may be narrower than the parent company's. For example, if a company with a universal commercial purpose ("purchase of goods for resale, manufacturing, commercial agency and brokerage, consulting services") opens a branch in Ruse intended solely for consulting activity, the resolution opening the branch may define a narrower scope — only "consulting services". This is a useful tool for internal segmentation and control.

For regulated activities (financial services, tour operator activity, transport, licensed professions) it should be borne in mind that the parent company's licence usually covers its branches, but the specific regulator may require separate notification or entry of the branch in its own register.

Branch manager — the key figure

Appointing the branch manager is perhaps the most important decision when opening a local structure. It is through the manager that the core idea of the branch form is achieved — operational independence without loss of central control.

Scope of representative power

The scope of the branch manager's powers is expressly defined in the resolution of the competent body of the company (General Meeting for OOD, Board of Directors or Management Board for AD, resolution of the sole owner for EOOD/EAD). Typically one of three models is chosen:

• Full representative power — the branch manager may conclude any transaction within the branch's scope, hire staff, sign contracts with suppliers and operate the bank account. This is the most common option.
• Commercial attorney — a more limited figure acting within a defined set of transactions, often with value thresholds ("up to EUR 50,000 per transaction") or subject-matter limits.
• Procurist — a person holding commercial power of attorney (procuration) under Articles 21–25 of the Commerce Act, separately registered in the Commercial Register, with a scope of powers defined by the law itself.

Form of the authorisation

Regardless of the chosen model, the authorisation of the branch manager is always formalised by a notarised power of attorney. It is recommended to sign a separate management contract as well, governing remuneration, term, reporting duties to headquarters and non-compete clauses.

All actions of the branch manager — contracts, payments, assumed obligations — bind the parent company. The branch has no assets of its own in legal terms; its assets and liabilities are those of the merchant.

When does opening a branch make sense

The branch form is not suitable for every expansion scenario. Before recommending a branch over a new company, we always analyse five main drivers:

• Geographic expansion within Bulgaria — when the company already has a working model and wants to replicate it in another city without creating a legal twin.
• Local public tenders and procurement — certain contracting authorities prefer or require local presence. A branch with its own UIC and address in the relevant locality may suffice to meet those conditions.
• Proximity to clients and partners — consulting firms, law offices and accounting practices open branches in large cities to serve the region without sending teams hundreds of kilometres away.
• Testing a new market — a branch is the "light" version of expansion. It allows owners to verify demand in a new city before deciding whether to set up a separate company or subsidiary at all.
• Setting up a production or logistics location — a new plant, warehouse or shop which does not carry its own business model but simply extends the merchant's activity to a new physical point.

Conversely, a branch is NOT the right tool when:

• You seek liability isolation — the branch shares the legal fate of the parent company.
• The project involves external investors or partners who want equity in the local operation.
• The new location will have a different business model or subject of activity, incompatible with the main one.
• The goal is tax optimisation or a structure relying on separate legal personality (e.g. use of different tax regimes).

Branch vs. new company (EOOD) — comparison

The table below summarises the main differences between opening a branch and incorporating a new company — the two options most commonly considered in practice:

For incorporation of a new company see our guide on company registration in Bulgaria.

Branch registration procedure

Opening a branch of a Bulgarian company follows a structured process that normally completes within 3–5 business days. The main steps are:

1. Resolution of the competent body — General Meeting (OOD), Board of Directors / Management Board (AD) or resolution of the sole owner (EOOD/EAD). The resolution must contain: the name of the branch, locality, address, subject of activity, appointment of a manager and scope of representative power.
2. Notarised consent and signature specimen of the branch manager — before a notary.
3. Preparation of a notarised power of attorney for the manager, if the scope of powers so requires.
4. Drafting of application Form B2 — the official template for branch registration in the Commercial Register.
5. Payment order for the state fee.
6. Filing with the Commercial Register — electronically with a QES (recommended, via a lawyer) or on paper at a regional office of the Registry Agency.
7. Decision of the registrar — typically within 3–5 business days. The branch comes into existence upon registration and receives its own UIC.

Required documents

The standard set of documents for branch registration of a Bulgarian company in the Commercial Register includes:

1. Application Form B2 — the official Registry Agency form for registering a merchant's branch.
2. Resolution of the competent body of the company to open the branch — minutes of the General Meeting (OOD), minutes of a Board of Directors / Management Board meeting (AD) or resolution of the sole owner (EOOD/EAD).
3. Invitation to the General Meeting (for OOD/AD) and attendance list (for AD) — evidence of the regularity of the meeting.
4. Notarised consent and signature specimen of the branch manager.
5. Declaration of truthfulness of the circumstances filed for registration.
6. Power of attorney — when the application is filed via a lawyer or other authorised representative.
7. Payment order for the paid state fee.

For regulated activities additional documents may be required — e.g. professional qualification of the branch manager for licensed professions, certificates from the Bulgarian National Bank for bank branches, sector-specific licences.

State fees

As of 01.01.2026, all Commercial Register fees are paid directly in euro at the fixed rate of 1 EUR = 1.95583 BGN. Fees for registering a merchant's branch are:

Electronic filing via an authorised lawyer has several practical advantages: a 50% discount on the state fee, acceptance of the lawyer's power of attorney without notarisation (under the Bar Act), faster processing and a lower risk of technical rejections.

After registration — operational steps

Registration of the branch in the Commercial Register is only the beginning. Depending on the scope of the activity to be carried out at the new location, several operational steps follow:

• Opening a bank account for the branch — optional. The bank will ask for a current certificate from the Register, the signature specimen and the branch-opening resolution.
• VAT registration — the VAT number belongs to the parent company; registration is done once for the whole legal entity. If, however, the turnover including the branch's activity crosses the threshold, a mandatory registration application is filed. See our article on VAT registration in Bulgaria for more.
• Employment relationships — branch staff are hired by the parent company; employment contracts are signed in its name but typically list the branch as place of work.
• Registration with the municipality — for local taxes and fees (waste collection), as well as for specific permits (working hours, advertising, use of public space).
• Sector-specific licences — for regulated activities, the relevant regulator is notified of the new point of operation.

Ongoing obligations

Branch accounting is kept separately in analytical detail but integrated into the company's overall books. No separate annual financial statements are prepared — one common FS is filed by the merchant, covering the data of all branches. Changes (manager, address, scope) are registered by a new filing with the Commercial Register. Closure of the branch also requires a resolution of the competent body of the company and a new application for de-registration.

Typical cases from practice

• Consulting firm Sofia → Varna. A Sofia-based law office or accounting practice opens a branch in Varna to serve clients on the Black Sea coast. The branch manager is a senior consultant running a small local team. Setup costs are minimal and the office benefits from the reputation of the headquarters.
• Manufacturer — new plant. An OOD with a main production site in Plovdiv opens a second plant in Stara Zagora. Instead of incorporating a new company, it opens a branch at the address of the new plant, signs a management contract with the branch manager and keeps full control over the production process.
• Retail chain — new shop. A retail chain opens shops in different cities, each registered as a branch. This allows tracking of local operating costs and profitability analysis per outlet, without the complexity of managing multiple separate entities.
• Logistics company — regional warehouse. A logistics operator sets up a branch at a new warehouse in Ruse, with a manager running the local team and handling transport scheduling for the region.
• Participation in local public tenders. A company seeking to compete in tenders organised by Blagoevgrad municipality opens a branch with an address in the city in order to meet local presence requirements.

For related topics see also our articles on branch of a foreign company in Bulgaria and branch of a non-profit association or foundation.

Frequently asked questions