All persons who are engaged in a business activity in Bulgaria have to be registered in the BULSTAT register. This is the smallest form of economic activity, which corresponds to the German “Gewerbe” and is not a “company” according to the Bulgarian commercial law.

This article aims to clarify the main points of the registration procedure and what is required from the applicants for the Registration within the BULSTAT Register. It follows the progress of the registration procedure, focusing on the registration of foreign individuals and legal entities.

I. Legal framework and persons having the obligation to register themselves.

Currently, the legal framework of the BULSTAT registration is mostly regulated by the BULSTAT Register ACT, which is in force as of 11.08.2005, having its last amendments and changes as of 10^th of July 2018 through State Gazetta 57. The BULSTAT register, in its capacity as a single electronic central register in Bulgaria, contains data about certain legal entities, subject to mandatory registration under this Act. These subjects are listed in Art. 3 of the BULSTAT Register Act, namely:

• corporate bodies, which are not companies or non-profit legal entities according to the Non-Profit Legal Entities Act , which are subject to mandatory registration within the Commercial Register, respectively within the Register of the Non-Profit Legal Entities;
• branches of foreign entities, which are not companies or non-profit legal entities;
• trading representatives of foreign entities under Art. 24 of the Investment Promotion Act ;
• foreign corporate bodies, which fulfill at least one of the following requirements:
  1. carry out economic activity on the territory of the Republic of Bulgaria, including also through place of economic activity or defined base or object;
  2. whose effective management is on the territory of Bulgaria;
  3. who own immovable property in Bulgaria;
  4. The latest amendments of the BULSTAT Register Act in 2018 introduced another requirement, which is about to enter into force as of 01.09.2018, namely these foreign corporate bodies to be pledgees under the Special Pledges Act. Article 3 of this Act provides the requirement, that the pledgee is either a company or an individual, who carries out agricultural activities, craft activities, freelancing activities, personal services or provides accommodation services by renting the places, where he resides. According to the Special Pledges Act only these persons could be acting as pledgees. However exceptions are admitted, as Art. 3 (2) of the Special Pledges Act provides other bodies, which also could act as a pledgee, even though they do not fulfill these requirements. This includes:
  a) Legal entities whose members are natural persons engaged in the activities listed above;
  b) Husbands of sole traders or individuals who carriy out the above activities;
  c) Municipalities, securing the municipality debts, which has been loaned accordance to the provisions of Municipal Debts Act.
  d) The Fund for Guaranteeing of the Deposits, in case it secures its own debt.
• Non-profit legal entities, which are exercising economic activity in Bulgaria – for the activity they exercise.
• unregistered partnerships under the Obligations and Contracts Act, including those organized as a handicraft and insurance funds under art. 8 of the Bulgarian Code Of Social Insurance;
• other persons out of the listed above, who are insurers and are not individuals;
• Branches and branches of the foreign corporate bodies other than companies and non-profit legal entities; Branches and branches of foreign corporate bodies and entities not expressly mentioned here, but are insurers and are not natural persons; as well as the branches of the companies, registered within the Commercial Register;
• Individuals, exercising freelancing or craft activity;
• Foreign individuals, who doesn’t possess personal identification number or personal identification number of foreigner and fulfill at least one of the following requirements:
  1. implement commercial activity or render independent personal services in the country, including also through place of economic activity or defined base or object, or
  2. own immovable property in the country, or
  3. are insurers under the Bulgarian Code Of Social Insurance. According to 5 of the Bulgarian Code Of Social Insurance an insurer shall be each natural person, legal entity or unincorporated association as well as other organizations having a legal duty under this Act to make insurance contributions for other natural persons. Insurers are mainly the employers under the Labor Code, who are obliged to pay the social security contributions of their employees, where the terms and the conditions thereto are provided by the law. However, insurers could be also third parties, i.e. the assignors under the civil contracts. or
  4. who are pledgers within the meaning of the Special Pledges Act.
  5. Other individuals – insurers;

It should be noted that within the BULSTAT Register could be also registered foreign entities subject to special substantive tax law registration, including foreign entities, which do not owe taxes under a valid international agreement, whereas Republic of Bulgaria is a contracting party. Foreign entities  from a member state of the European Union and from member state of the European Economic Area Agreement, which entities exercise an economic activity in Bulgaria only under the condition of free provision of services, are not subject of a BULSTAT registration.

II. Content of the registered circumstances

The content of the circumstances to be entered within the register depends on the nature of the applicant. For legal entities, the following information is entered within the register:

1. Legal form;
2. Name of the entity;
3. Seat and business address as well as an address for correspondence with the respective authorities;
4. Scope of activity;
5. Executive and representative bodies;
6. Date of entry within the BULSTAT register and unique identification code (UIC), which is given when the entity is entered within the register;
7. Reason for registration;
8. Location address or address of the property;

The most recent changes in 2018 also require the registration of the identification data of the persons, who are the actual owners of the legal entities, as well as details of the companies through which the direct or indirect control of the registered company's activity is exercised. These requirements are expected to support the application of the Bulgarian Money Laundering Act.

For natural persons, the following information shall be provided:

1. Name and identity of the person, citizenship, for foreign natural persons - date of birth;
2. UIC, that matches the personal identification number (PIN) or the person number for foreigners;
3. Reason for registration;
4. Correspondence address;
5. Location address or address of the property;
6. Activities, occupations or craft activities;

In this case, according to the provisions of the Money Laundering Act, there is also a requirement for disclosure of the actual owners and details for the legal entities or other legal forms, exercising direct or indirect control.

III. Required documents and registration procedures

The registration procedure is initiated through an application submitted by an authorized person. This may be done by the natural person or legal entity itself, its legal representative, a duly authorized lawyer or a duly authorized representative authorized to do so by a public notary. The application shall be accompanied by a statement for the accuracy of the information. The state fee for the registration of foreign legal persons amounts to BGN 40,- and for the registration of foreign natural persons it is BGN 15,-. Depending on the type of person to be registered, the submission of different documents is required.

For the registration of circumstances for a foreign legal entity, the following documents shall be submitted:

1. Proof for the exercising of a particular activity in the Republic of Bulgaria;
2. A legalized document, certifying the establishing and representation of the foreign legal persons in the respective country. This document shall be translated into Bulgarian;
3. Document for the payment of state fee;

For the registration of circumstances for a foreign natural person, the following documents shall be provided:

1. Proof for the exercising of a particular activity in the Republic of Bulgaria or proof of a real estate ownership, as well as other documents, if such are required ex lege;
2. Document for the payment of state fee;

IV. Deadlines for the application for registration

Essential is the information regarding the initial commencement date as of the  individuals are required to register within the BULSTAT. The general term for all persons is 7 days. Regarding the legal entities this term commences as of the date of receiving the notification for their incorporation.  For natural persons, this term commences as of the begin of exercising the activity, since the hiring of the natural persons, the purchase of the real estate or as of the change of the requirements , which are subject to registration, i.e. the change of the correspondence address or the business address.  

V. Registration terms, scope of the examination and contestation

Regardless of the fact if it comes to application for registration or deletion, the registrar is obliged to pronounce on it within the next working day following the submission of the application.

The registrar examines the lawfulness of the application or whether:

1. The application has been filed in compliance with the established form and procedure;
2. The application contains circumstances which are subject to registration and which have not yet been registered;
3. The application has been submitted by an authorized person;
4. The application is accompanied by all the documents required by law, the statement of accuracy of the information and document for paid state fee.

During the examination, the official has the following options:

1. If compliance with all the conditions is established, he orders the registration or deletion of the circumstances, if an application for registration or deletion has been requested;
2. If it is determined that a certain document is missing or the state fee has not been paid, he instructs the applicant to remove the deficiencies. In this case the applicant will be given a 5 working days term to produce the necessary documents or to pay the state fee, which will not interrupt the proceedings. If he does not comply with this, the official issues a refusal and the proceedings are terminated;
3. If the legal requirements are not fulfilled, e.g. if the application has been submitted by an unauthorized person or if a registration of circumstances, which are not subject of registration, is requested, the official shall issue a refusal. The latter shall be served to the applicant immediately in person or by letter with acknowledgment of receipt.

In case of refusal, the applicant has two options. He/she can submit a new application, which will be reviewed again. It is important that he/she may use the documents already attached to the first application, referring to the application number and the type of documents. In this case, however, a new declaration for the correctness of the information provided shall be enclosed. As a second possibility, the applicant may appeal the refusal for registration. The appeal shall be first submitted before the Executive Director of the Bulgarian Registration Agency and his decision could be subject of further appeal in accordance with the provisions of the Bulgarian Administrative Code. It is important to be noted, that in case the refusal gets repealed, the registration takes place ex officio and the applicant is being notified thereof, d. H. he/she doesn’t have to submit another application.