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Delchev & Partners are especially proud to announce the publication of the Bulgarian book “Vertical Agreement, EC - Bulgaria” („Вертикални споразумения, ЕС - България”) co-authored by our colleague Ivan Marinov (Иван Маринов). This is the first Bulgarian book dedicated to the commercial and competition law aspects of vertical agreements under EU and national competition law. It is not only the first of its kind in Bulgaria but is also part of the first wave of a unique pan-European project in the center of which is the Oxford University Press monograph “Vertical Agreements in EU Competition Law” authored by Frank Wijckmans and Filip Tuytschaever. The project includes around twenty member states with their own local publications. The project and the book were presented at a special conference held in Brussels on 3 May 2018 which was opened by Koen Geens, Minister of Justice, Belgian Federal Government. Key note speaker was Lucas Peeperkorn, Principal Expert in Antitrust Policy, European Commission (DG Competition). For more information about the project and the book click here. Read more about this project

Legal 500 Doing Business in Bulgaria

Contributed by Delchev & Partners

Doing Business in India

FACTS ABOUT BULGARIA

The Republic of Bulgaria is a South-Eastern European country located in the Eastern part of the Balkan Peninsula. It is a natural crossing point between Europe, Asia and Africa – a strategic location enhanced by its proximity to the Black Sea and the Danube River.

The territory of Bulgaria is 111 thousand sq. km. and its population is around 7.3 million.

The official language in the Republic of Bulgaria is Bulgarian – an Indo-European language, part of the Slavic family.

The official currency is the Bulgarian lev (BGN). Its exchange rate against the Euro is fixed at EUR 1 = BGN 1.95583.

Bulgaria has been a member of the European Union (EU) since 2007. At present, Bulgaria is not a member of the EU Schengen area or of the Euro zone.

STARTING A BUSINESS IN BULGARIA

Bulgarian legal entities predominantly used as business vehicles

For legal and tax considerations the following two types of Bulgarian legal entities are predominantly incorporated: a limited liability company (abbreviated as "OOD" or "EOOD" type of company1) or a joint-stock company (abbreviated as "AD" or "EAD" type of company2). The other types of Bulgarian legal entities are very rarely set up3.

Limited liability company4 (OOD or EOOD)

The following particulars are needed for the incorporation of a Bulgarian limited liability company.

  • Shareholders - one or more individuals or legal entities.
  • Corporate name - must be unique.
  • Registered address - must be in Bulgaria.
  • Minimum share capital - BGN 2 (two levs).
  • Management - one or more director(s)5.
  • Representation - by the director(s)6.

Joint-stock company (AD or EAD)

The following particulars are needed for the incorporation of a Bulgarian joint-stock company.

  • Shareholders - one or more individuals or legal entities.
  • Corporate name - must be unique.
  • Registered address - must be in Bulgaria.
  • Minimum share capital - BGN 50,000 (fifty thousand levs).
  • Shares - registered or to the bearer. Preference shares may also be issued.
  • Management - one-tier system of management (i.e. a Board of Directors) or a two-tier system (i.e. a Managing Board and a Supervisory Board). The members of the Board of Directors and the Managing Board may be individuals or legal entities.
  • Representation - by the members of the Board of Directors or of the Managing Board. The Board of Directors may also elect an Executive Director (or Executive Directors) to represent the company7.

Permanent establishment of a foreign company

Foreign companies may directly conduct business in Bulgaria via a permanent establishment. There are two types of permanent establishments distinguished on the basis of registration requirements, i.e. a branch and a permanent establishment.

Branch

The branch is a permanent establishment of a foreign company in Bulgaria that is a registered with the Bulgarian Commercial Register. For the purposes of the registration of the branch the following particulars are necessary..

  • Principal - the foreign company.
  • Corporate name - the name of the principal (the foreign company) followed by “branch”.
  • Registered address - must be in Bulgaria.
  • Representation - by individual(s) appointed by the principal8.

Permanent establishment

A foreign company may also conduct business in Bulgaria through a permanent establishment within the meaning of the tax legislation9.

Trade representative office

Foreign companies may open a trade representative office in Bulgaria. The trade representative office is not a legal person and is not permitted to carry out business activities.

REAL ESTATE

Ownership of real estate property - restrictions

Ownership of buildings

EU and European Economic Area (EEA) nationals and companies, as well as third-country nationals and companies, can acquire buildings without any limitations.

Ownership of construction land

EU and EEA nationals and companies can buy construction land without any limitations. Third-country nationals and companies are generally not allowed to buy construction land10.

Ownership of agricultural land

EU and EEA nationals and companies can buy agricultural land without any limitations.

Bulgarian companies with shareholders from third countries can buy agricultural land only if the companies have been in existence for more than 5 years. Bulgarian companies which have been in existence for less than 5 years can still buy agricultural land if their shareholders have been residing or established in Bulgaria for more than 5 years.

Agricultural land cannot be acquired by: (a) companies directly or indirectly owned by companies registered in off-shore jurisdictions; (b) joint-stock companies with bearer shares.

Acquisition of ownership of real estate property – general rules and requirements

The ownership of a real estate property is acquired under a written contract in the form of a notary deed, signed before a Bulgarian notary public and registered with the Real Estate Register.

Rights in rem (such as the right to use a property, the right to construct on a plot of land, etc.) can be transferred separately from the property itself. The transfer of rights in rem must be also in a notary deed form.

Ownership of real estate property – taxes and fees

Transfer tax

Local transfer tax is levied upon acquisition of a real estate property. The rate of the transfer tax is determined by each municipality within the range between 0.1% and 3%. The tax is levied on the higher between the acquisition price and the tax valuation of the property.

Annual real estate tax

Local annual real estate tax is payable by the owners of buildings and construction land on an annual basis. Agricultural land and forests are exempt from annual real estate tax.

The local annual real estate tax is determined by each municipality within the range between 0.01% and 0.45%. The taxable base of real estates owned by companies is the higher between their acquisition value and their tax valuation.

Waste fee

Local waste fee is payable by the owners of buildings and construction land in exchange for services provided by the municipalities related to waste collection and transportation, waste treatment and maintenance of the cleanliness of public areas. The taxable base and the tax rate are determined by each municipality.

Lease of real estate property

Agreements for lease of real estate property between traders may be concluded for an unlimited period of time.

In order to guarantee his right to use the lease property in case the latter is sold to a third party, the lessee can have the lease agreement notarized and/or registered with the Real Estate Register..

EMPLOYMENT AND SOCIAL SECURITY

Types of employment agreements

The most common types of employment agreements used by employers in Bulgaria are as follows:

  • employment agreement for an indefinite period of time;
  • fixed-term employment agreement for carrying out temporary, seasonal or short-term work, or for concluding certain tasks;
  • fixed-term employment agreement for substituting an absent employee;
  • employment agreement for additional work for the same or another employer;
  • employment agreement for work during certain days of the month;
  • employment agreement for short-term seasonal agricultural work;
  • agreement for acquiring qualification;
  • employment agreement for training an employee in the course of work;
  • internship employment agreement.

Specific conditions apply to home office work, distance work and to employees provided by a temporary employment agency.

General rules of employment relations

Written form

All employment agreements must be concluded in writing before the starting date of the employment. Any changes to the employment agreement must be also agreed with the employee in writing.

Job description

A job description in writing must be handed to the employee on the date of signing the employment agreement.

Notification to the tax authorities

All employment agreements must be notified to the Bulgarian National Revenue Agency within three days of their signing. The employee cannot start work until the notification is filed with the tax authorities.

Any change in the employment agreement concerning the employee’s position, or the term of the agreement, as well as the termination of the employment relationship must be also notified to the Bulgarian tax authorities.

Minimum contents of the employment agreement

The employment agreement must contain certain minimum information concerning the position of the employee, the place of work, the date of signature of the agreement and the starting date of the employment, the term of the agreement, the amount and terms of payment of the basic salary, the minimum amount of the annual paid leave, the duration of the working day and week, the termination notice period.

Probation

A probation period of up to six months could be agreed in favour of the employer, or in favour of both parties to the employment relationship.

Working time and rests

The regular working time is 8 hours per day, 5 days per week. There are specific rules regarding part- time work, open-ended working hours, work in shifts, summary calculation of working time, night work, overtime work, etc.

Each employee is entitled to a lunch break of at least 30 minutes, a rest of minimum 12 hours between the working days and a weekly rest of two consecutive days, one of which is Sunday. The non-working days and holidays are set by the law.

Leaves

Employees are entitled to various leaves:

  • paid annual leave of at least 20 working days;
  • additional paid leave in case of open-ended working hours work;
  • unpaid leaves;
  • sick leave;
  • parent leaves;
  • other specific leaves – e.g. in case of various family events, social duties, education, etc.
Termination of employment agreements

The employment agreement may be terminated:

  • by mutual consent;
  • at the employer’s initiative against a compensation of minimum four gross salaries;
  • at the expiry of the term of the agreement;
  • by the employee with a termination notice of minimum 30 days;
  • by the employer on certain limited legal grounds (e.g. closing down part of the enterprise, staff reduction, underperformance of the employee, etc.) with a termination notice of minimum 30 days;
  • upon disciplinary dismissal of the employee on certain, limited, legal grounds;
  • on other grounds provided by the law.

Certain employees (e.g. employees suffering from certain illnesses, mothers of young children, employees absent due to leaves, pregnant employees and employees using parent leaves, etc.) enjoy an enhanced protection in case of dismissal by the employer.

Company directors and self-employed persons

Company Directors and Board of Directors’ members are hired under management agreements which are governed by the civil and commercial law.

Freelancers and persons of certain regulated professions are treated as self-employed persons who can be hired under service agreements.

Social security and health insurance

Insured persons include, inter alia:

  • persons working under employment agreements;
  • company Directors, Board of Directors’ and supervisory bodies’ members;
  • self-employed persons;
  • shareholders;
  • persons working under civil service agreements (freelancers).

The income which serves as basis for calculating social security and health insurance contributions comprises all kinds of remunerations and other employment income.

The statutory minimum taxable income for self-employed persons for 2018 is BGN 510. The statutory minimum taxable income for persons working under employment agreements is determined depending on their job position and the economic sector where they are employed.

The statutory maximum income subject to social security is BGN 2 600.

For 2018 the overall social security and health insurance contributions for persons employed under employment agreements and insured for all risks amount to app. 32.7% and are distributed between the employee and the employer in a ratio of roughly 60:40.

RESIDENCE AND EMPLOYMENT OF FOREIGN NATIONALS IN BULGARIA

Rules applicable to EU citizens and their families

Residence of EU citizens and members of their families in Bulgaria

Persons who are citizens of the EU Member States, EEA Member States and the Swiss Confederation may enter and stay in Bulgaria for up to 3 months using their national ID cards or passports.

EU citizens (as well as EEA and Swiss nationals who enjoy equal treatment) may apply for continuous residence which entitles them to stay in Bulgaria for up to 5 years and for permanent residence after the expiry of a 5-year uninterrupted period of stay in Bulgaria. Short-term absences do not interrupt the period of residence. In order to be issued a residence certificate the EU citizens must demonstrate that they are employed or self-employed in Bulgaria, or that they have a health insurance and sufficient funds for supporting themselves and their families without resorting to the Bulgarian welfare system.

Members of the family of an EU citizen who are not EU citizens, who accompany the EU citizen in Bulgaria, are entitled to the same periods of residence.

Work of EU citizens in Bulgaria

No formalities or work permit requirements apply to persons who are citizens of the EU Member States, EEA Member States and the Swiss Confederation.

Rules applicable to third-country nationals

Residence of third-country nationals in Bulgaria

Third-country nationals who intend to reside in Bulgaria for employment or business purposes need a visa to enter Bulgaria and a residence permit. Third-country nationals may reside in Bulgaria continuously (for a period of up to one year), long-term (for an initial period of 5 years) and permanently.

Special rules apply to holders of an EU Blue Card, persons posted by their employers in the framework of intra-corporate transfer, persons who have made large investments in Bulgaria and to other specific categories.

Work of third-country nationals in Bulgaria

Third-country nationals are entitled to work in Bulgaria after obtaining a work permit. Exceptions may apply to short-term secondment and to certain categories of persons – e.g. foreign nationals who are entitled to long-term or permanent residence in Bulgaria.

Work permits are generally granted after the Bulgarian employer demonstrates that he has carried out a labour market research for suitable Bulgarian or EU job applicants and provided that the third- country employees do not exceed 10% of the average number of Bulgarian and EU employees of the company.

Specific less rigid rules apply to holders of EU Blue Card, persons posted by their employers in the framework of intra-corporate transfer and seasonal workers.

TAXES IN BULGARIA

Corporate income tax

Corporate income tax is levied on the profits of Bulgarian legal entities and of foreign legal entities which carry out economic activities in Bulgaria through a permanent establishment. The financial year is the calendar year.

The taxable base is computed by adjusting the accounting profit/loss for tax purposes with any permanent and temporary tax differences.

The corporate income tax rate is 10%.

Tax losses can be carried forward during the following 5 years. They can be offset against the tax profits of the company.

Dividends distributed by Bulgarian, EU or EEA subsidiaries of Bulgarian parent companies are not subject to corporate taxation at the level of the Bulgarian parent.

Annual tax returns are filed by 31-st March of the year following the respective financial year together with annual financial statements. Companies make monthly or quarterly advance tax payments based on their forecast tax profits for the current year. The actual outstanding tax is payable by 31-st March of the year following the respective tax year.

Tax on expenses

A final tax of 10% is due on certain expenses, including representative expenses related to the business activities of the taxable person, social expenses in kind and expenses in kind for the use of company assets by employees.

Withholding tax

Withholding tax at source is payable by foreign persons who receive certain types of income from Bulgarian source – e.g. capital gains, dividends, interest, royalties, technical services fees, directors’ fees, franchise and factoring fees, rental fees, income from transactions with real estate located in Bulgaria, etc.

Dividends and liquidation proceeds distributed to non-resident companies are subject to 5% withholding tax. All other types of income from Bulgarian source are subject to 10% tax at source.

No withholding tax is payable on dividends distributed to EU or EEA parent companies. Interest and royalties paid to legal persons which are EU or EEA tax residents and which are associated enterprises with the Bulgarian payer of the income are also exempted from source taxation, subject to a two-year holding period and 25% minimum holding conditions.

The due withholding tax could be reduced under the applicable Double Tax Treaties signed by Bulgaria. At present Bulgaria has signed 68 Double Tax Treaties.

Personal income tax

Personal Income Tax (PIT) and final taxes at source are levied on income received by individuals from Bulgarian source, including employment income, income of self-employed persons, rental income, capital gains, dividends and liquidation proceeds, interest, royalties, etc.

Taxable persons may be eligible for tax exemptions and tax reliefs under certain conditions. The tax rates of the personal income tax and final taxes are as follows:

  • Personal income tax on employment income, income of self-employed persons, rental income, capital gains, other types of income - 10%
  • Personal income tax on sole traders’ income - 15%
  • Final tax on dividends and liquidation proceeds - 5%
  • Final tax on income from voluntary social security, voluntary health insurance and life insurance - 7%
  • Final tax on income of Bulgarian tax residents from interest on bank accounts - 8%

Personal income tax is deducted in advance installments by the payer or the payee of the income on a monthly or quarterly basis, depending on the type of the income. When the income is subject to a final tax, no advance installments are due.

Annual tax returns are filed by the individual tax payers until 30-th April of the year following the year of receiving the income. The annual tax less any advance payments is payable by 30-th April of the year following the year of receiving the income.

Value added tax

Value Added Tax (VAT) is levied on taxable supplies of goods and services carried out against consideration by taxable persons acting as such.

The taxable base is determined on the basis of all elements of the remuneration for the supply. The standard VAT rate in Bulgaria is 20%. A reduced rate of 9% applies to hotel accommodation.

The taxable turnover threshold for mandatory VAT registration is BGN 50 000 accumulated either for the last 12 months, or for two consecutive months, including the current month. Taxable persons may be also subject to mandatory VAT registration on grounds of their distant sales, intra-Community acquisitions or other supplies of goods or services. Taxable persons may apply for voluntary VAT registration regardless of their taxable turnover.

Persons established outside the EU may register for VAT purposes in Bulgaria only through a Bulgarian VAT agent unless the state where they are established has signed mutual assistance legal instruments with Bulgaria.

The tax period is the calendar month. VAT returns are submitted on a monthly basis by 14-th of the following month. The tax due for the respective tax period is payable by 14-th of the following month.

ACCOUNTING AND AUDITING

Accounting

All enterprises must keep accounting books and prepare financial statements in accordance with the applicable accounting legislation. Enterprises within the meaning of the Bulgarian accounting legislation are all traders (companies and non-legal persons), branches of foreign companies, consortiums, trade representative offices and permanent establishments of foreign legal persons.

The financial statements of the enterprises are prepared in accordance with the National Accounting Standards which must be compliant with the EU legislation (including the International Accounting Standards). However, the enterprise may opt to apply the International Accounting Standards instead.

Enterprises must prepare annual financial statements and parent companies must additionally prepare consolidated annual financial statements. Depending on the category of the enterprise it may be exempted from preparing the full set of annual financial statements. The annual financial statements must be made public by publishing them either with the Bulgarian Commercial Register, or via Internet.

Auditing

Only certified auditors may audit the financial statements of the enterprises.

The annual and consolidated financial statements of medium and large enterprises are subject to mandatory auditing, while small enterprises not exceeding certain minimum thresholds for turnover, balance-sheet value of assets or personnel are exempted from having their annual financial statements audited. Regardless of their category, the enterprises of public interest, joint-stock companies and partnerships limited by shares are subject to mandatory auditing of their financial statements.

TAX AND OTHER INCENTIVES FOR INVESTORS

Tax incentive for investors

Businesses investing in municipalities with high the rate of unemployment are eligible for Bulgarian state aid for regional development consisting in retaining up to 100% of the due corporate income tax.

The tax incentive is granted if the profit of the investor is derived from manufacturing activities in municipalities with high the rate of unemployment and provided that the company maintains at least 10 employees of whom 50% are directly engaged in the manufacturing activities and at least 30% reside in the high unemployment rate municipality.

The retained tax must be invested in non-current tangible and intangible assets which form part of an initial investment project.

Other incentives

Subject to certain conditions certified investments may be eligible for the following incentives:

  • shorter deadlines for administrative services;
  • financial aid for technical infrastructure necessary for carrying out the investment project;
  • financial aid for professional qualification and training of persons, including university trainees, taking the new jobs created by the investment;
  • financial aid for partial refund of the social security and health insurance contributions paid by the investor as an employer with regard to newly-employed personnel.

INTELLECTUAL PROPERTY AND COMPETITION

Intellectual property

The main areas of intellectual property rights under Bulgarian law include:

  • copyright and related rights;
  • industrial property rights (patents, utility models, trademarks, industrial designs, geographic indications, topologies of integrated circuit)
  • sui generis rights (databases, new plant varieties and new animal breeds)

Unregistered designs and firms/company names/trading names are not directly recognized as industrial property objects under Bulgarian national law. For unregistered designs the Community Design Regulation remains directly applicable. Protection for firm/company names/trading names in Bulgaria may be sought under the Paris Convention.

National registrations for all objects of industrial property as well as new plant varieties and new animal breeds are made with the Bulgarian Patent Office (BPO). BPO’s official bulletin is published once a month, on the last business day of the current month.

For proceedings before the BPO non-Bulgarian individuals or companies must be represented by an industrial property representative.

Competition

The main Bulgarian competition act is the Protection of Competition Act (PCA). It provides regulation on three main areas: competition law, prohibition against unfair competition law and abuse of a superior bargaining position.

Competition law

In the area of competition law PCA provides regulation on the abuse of a dominant position or monopoly, prohibited agreements, decision or concerted practices and concentrations between undertakings.

In Bulgaria EC competition law and national competition law apply in parallel where trade between member-states is affect.

Unfair competition

PCA also provides for a general prohibition against unfair competition which includes any action or inaction in exercising economic activity which contradicts good faith commercial practices and harms or is liable to cause harm to competitors’ interests.

PCA contains a non-exhaustive list of unfair competition acts, namely:

  • deception;
  • misleading advertising and unlawful comparative advertising (Directive 2006/114/EC concerning misleading and comparative advertising);
  • imitation;
  • unfair attraction of clients;
  • prohibition against disclosure of production or commercial secrets.
Abuse of a superior bargaining position

The prohibition against an abuse of a superior bargaining position covers any action or inaction of an undertaking in a superior bargaining position contradicting good faith commercial practices which harms or is liable to cause harm to an economically weaker party upon bargaining and to consumers.

Actions or inactions contradicting good faith commercial practices should have no economically objective justification, such as (but limited to) unjustified refusal of supply or purchase of goods or services, imposition of unjustly burdensome or discriminative conditions or unjustified termination of a commercial relationship.

Bulgarian Commission on Protection of Competition

The national competition authority in Bulgaria is the Bulgarian Commission on Protection of Competition (CPC).

CPC is also competent to deal with cases of unfair competition and abuse of an abuse of superior bargaining position.

CPC’s acts are subject to appeal through two court instances, ie before Administrative Court – Sofia District and the Bulgarian Supreme Administrative Court.

LITIGATION AND ARBITRATION

Litigation

Civil/commercial litigation

Litigation in civil and commercial cases may develop before three court instances. Appeal before a second court instance is always possible.

Cassation appeal is before the Bulgarian Supreme Court of Cassation and is subject to a materiality threshold (the price of the claim which is different for civil and commercial cases) and the fulfillment of certain cassation grounds.

The main act is the Bulgarian Civil Procedure Code.

Administrative litigation

Appeal of administrative acts is as a rule subject to three instances – one administrative and two court instances, where the former is not usually compulsory.

Specialized administrative courts act as first court instance while the Bulgarian Supreme Administrative Court always act as a second court instance.

The main act is the Bulgarian Administrative Procedure Code.

Arbitration

Arbitration in Bulgaria is generally possible for most types of disputes. There is permanent and ad hoc arbitration. The arbitration may be internal, ie national, or international.

Disputes which may not be subject to arbitration are those which have as subject in rem rights in or possession of immovable property; alimony/child support, rights under an employment relationship, or a dispute where one of the parties is a consumer under the Consumer Protection Act. Insolvency or liquidation proceedings are also impossible to arbitrate. It is questionable whether private damages disputes in competition law may be subject to arbitration.

The main act is the Bulgarian International Commercial Arbitration Act which also applies for internal arbitration. The Bulgarian Civil Procedure code is also relevant.

Footnotes

1. If the shareholder is only one person the formal legal abbreviation is “EOOD” (limited liability company with a sole shareholder). If the shareholders are two or more persons the formal legal abbreviation is “OOD” (limited liability company).

2. If the shareholder is only one person the formal legal abbreviation is “EAD” (joint-stock company with a sole shareholder). If the shareholders are two or more persons the formal legal abbreviation is “AD” (joint-stock company company).

3. The other types of legal entities include: General Partnership; Limited Partnership; Partnership Limited by Shares.

4. The Bulgarian limited liability company is a separate legal entity and possesses all essential requisites of a corporation (e.g. share capital; limited liability of shareholders; management by directors, etc.). The Bulgarian limited liability company, however, has some specific legal features that are inherent to partnerships. The reason for the "partnership" features of the OOD company is the concept that the shareholders of an OOD company unite their interests intuitu personae (i.e. by reason of strict personal nature). In plain language, this means that Shareholder "A" would form an OOD company together with Shareholder "B" only because of the "personality" of the latter and vice versa. The intuitu personae nature of the Bulgarian limited liability company provides the explanation for the specifics of the OOD company. These specifics of the Bulgarian limited liability company inter alia include the following: (a) at any time, a shareholder in an OOD company may exercise his right to exit the company by giving a notice to the company; (b) under certain circumstances the General Meeting of the shareholders of an OOD company may pass a resolution for expulsion of a shareholder from the company; (c) under certain circumstances the shareholders in a limited liability company may be obligated to make additional cash contributions on the basis of a resolution of the General Meeting of the shareholders.

5. The director must be an individual. The Bulgarian limited liability company cannot have a board of directors

6. If more than one director is appointed, the type of representation must be specified: joint or several.

7. The rule is that, if Executive Director(s) is/are elected, the number of the Executive Directors shall not be more than the rest of the board members. For instance:

  • In a 3-member Board of Directors there can be one executive director only (1< 2);
  • In a 4-member Board of Directors there can be one executive director only (1< 3);
  • In a 5-member Board of Directors there can be one or two executive directors (2< 3);
  • And so on.

8. The representation powers of the branch's manager are determined by the principal usually in a power of attorney.

9. The permanent establishment concept includes:

  • a fixed place (owned, leased or provided for use) through which the non-resident performs wholly or partially economic activity in the country, e.g.: a place of management; a branch; a representative office registered in the country; office premises; a bureau; a studio; a plant; a workshop (factory); a shop; a warehouse; a repair/service site; an installation site; a construction site; a mine, a quarry, a drill, an oil or gas well, a source, or other places for extraction of natural resources;
  • performance of activities in the country by persons authorized to conclude contracts on behalf of foreign persons, with the exception of the activities of representatives of independent status as per Chapter VI of the Commerce Act.
  • permanent performance of commercial transactions with a place of execution in the territory of Bulgaria even if the foreign person does not have a permanent representative or a fixed place.

10. The restriction is, however, easily overcome by incorporating a Bulgarian subsidiary company which becomes the owner of the land.

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