A company with variable capital in Bulgaria - why to choose it?

In recent years, foreign citizens in Bulgaria have faced increasing difficulties in opening a bank account as part of the establishment of a Bulgarian company. " Kostov and Partners" even filed such a case in the Administrative Court of Sofia to protect its French clients from the unscrupulous behavior in this context of the Bulgarian bank "Procredit Bank", which refused to open a savings account for them without providing any legal basis for this.

The problem starts with the fact that when you start creating, for example, an EOOD or OOD in Bulgaria, you need to open a deposit (savings) account into which to deposit the capital of the company being created.

In addition to the physical presence requirement to open a bank account – which is already particularly burdensome – the controls and restrictions imposed by Bulgarian brick-and-mortar banks can seriously hinder your business start-up plans. These banks can significantly delay the process of opening a savings account, due to the account holder going through KYS (know your customer)   and AML (anti money laundering) verification protocols, or even issue a flat refusal, often without justification. This leaves you unable to improve the quality of your future application.

This is a real technical problem, without legal basis in Bulgarian law, which for months has complicated and slowed down the process of establishing a Bulgarian company by foreigners. Hundreds, even thousands of euros spent on company formation fees can be lost due to the inability to open a deposit account, not to mention the days or weeks wasted in the procedure, efforts of lawyers and consultants to prepare the documents, etc.

Fortunately, the law firm "Kostov and Partners" found a way out of the situation for its clients by starting to implement a registration regime for new commercial companies that appeared in Bulgarian legislation in December 2024. Since then, it has been practically possible to register a company with variable capital in the Bulgarian Commercial Register.

The company with variable capital (or abbreviated оn bulgarian as DPK) was introduced into the Commercial Code through the new Articles 260a to 260j. This type of company has several attractive features for one or more entrepreneurs in need of a flexible solution to support their business or innovative project.  DPK can be established by  one or more natural and/or legal persons . It is suitable for foreign citizens and/or organizations that develop innovative and high-tech products and services .

The management body of a DPK can be either a sole manager or a collective management board. There is no regulatory basis on which such a choice can be based, it is left entirely to the discretion of the founders/partners in the DPK and can be changed at any time. Unlike an OOD, where a manager can only be an individual, here the law allows a legal entity to be designated as the sole management body – manager of a DPK . Regardless of whether the legal entity acts as a sole manager or is part of the management board of the DPK, it should designate a representative – an individual for the purposes of fulfilling its obligations. When a DPK has a designated manager, he is the person who represents the company before third parties. When the management body is collective, the executive member or members who may be assigned the representation of the company are designated from among its members.

As its name suggests, a company with variable capital allows for easy changes in the company's authorized capital . These changes can occur depending on the entry and exit of partners from the company.

One of the features of the Civil Procedure Code that interests us particularly is the exemption from the requirement for a deposit account when registering a company with variable capital in the Commercial Register. In fact, the company with variable capital is currently the only type of Bulgarian company that allows the creation of a Bulgarian company without a bank account and more precisely without a deposit account.

This exemption significantly simplifies and accelerates the stage of establishing a company for an entrepreneur attracted as an investor in Bulgaria and favorable conditions for entrepreneurship with this company.

You just need to be aware of the few restrictions associated with this type of company.  Your company with variable capital must have fewer than 50 employees and its annual turnover must be below approximately 2 million euros. However, exceeding these limits is actually a good thing for an entrepreneur, and the law firm "Kostov & Partners" is at your disposal to help you implement such a solution and deal with the problem of bank accounts in Bulgaria .

Contact us to create your company with variable capital without the need to be present in Bulgaria. The entire procedure can be carried out remotely , as the lawyers of "Kostov and partners" will prepare your documents, send them to you by email and after you certify them with an apostille and return them to us, the procedure for registering your company in Bulgaria will begin without any unforeseen complications. " Kostov and partners" also offers you a business address in Plovdiv or Sofia and VAT registration of the company, if you wish.