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Cabinet reduces capital required for starting a business in Bulgaria from 5000 leva to 100 leva

Date: 11.12.2008

The amount of capital required for legally starting a limited liability company - LLC (Drujestvo s ogranichena otgovornost – OOD) was decreased from the current 5000 leva to 100 leva by the Cabinet, the Government’s press office said on December 4 2008.

The move aims to stimulate the starting of small businesses in Bulgaria, against a background of years of complaints from business circles and think tanks that the sum is too big for people to set up their own small businesses.

The December 4 Cabinet decision is part of a package of amendments to the Commercial Act that are subject to approval by Parliament.

According to the World Bank’s 2009 report Doing Business, 75 countries do not require any capital for a business to be set up. The World Bank report on Bulgaria estimates that starting a business in the country can take up to 50 days and involves four major steps.

The first step is the minutes of the constituent meeting of the shareholders in the OOD; obtaining a notary certified statement of consent and signature specimen of the manager, and two certified copies of the articles of incorporation of the OOD.  All this, according to the World Bank report, can be done in one day.

The second step involves depositing the paid-up capital in a bank which, the report says, could take up to two days, with the cost of the procedure - between 10 to 30 leva -depending on the bank.  

The third step, registering the OOD with the Commercial Register at the Registry Agency, is the longest, according to the report, because it could take up to 35 days and costs 120 leva, the state fee for registration.

The fourth step is to register for Valued Added Tax (VAT) which is free of charge and takes one day for the filing and 12 days for the final registration, the report says.

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