VT Times, May 2012

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Legal matters: Starting a business … So you’ve taken the plunge and decided to run your own business in Bulgaria. You are probably now slightly concerned about the paperwork and administration involved. Don’t be: this guide should help you go through the process without too much sweating. Though some people prefer to work in cash only and avoid the taxman altogether by not declaring a business at all, that’s becoming rarer and does carry risks. For one, you are not avoiding tax; you’re evading it. And that’s illegal. Two, if you happen to run into some problem during your work: someone gets hurt, you get sued … if you don’t have a limited liability company (ООД) you’ve got no cover and are personally responsible for damage and losses. If your business is at all public, with customers and competition, the safer route is to make it legal and official. Just remember: there might be some business people out there who see you as a threat and it’s very easy for them to report you. Running a company in Bulgaria can be far preferable to keeping your business in the UK. Taxes are set at a flat 10% for both income tax and corporation tax – amongst the lowest in Europe. OK, fair play, Montenegro is 1% lower. And Bosnia lower still. But ... as Monty Python would say … APART from Montenegro and Bosnia, nowhere is lower. Definitely no EU country offers the same benefits. And if you’re coming from Scandinavia, it’s going to feel like an absolute bargain. 26 All our advertising rates are shown on page 40 EU citizens have every right under law to start a business here in Bulgaria, under the same conditions as Bulgarians and those with residency. There’s great news when starting a business in Bulgaria: you probably already have one! As per previous issues of the VT Times, you tend to need a business to buy a home, though this is changing and will do more in the next couple of years. So, actually, you’ve already done a lot of the work. You should even have a business bank account. When you dig out a copy of your original A4 application to register a company, you’ll see that the articles tend to be cleverly written. Under section 6, company activity, there should be a long list of possible businesses you can take part in, ending “as well as any other activity not banned by the law or any other legal document.” Excellent. So, unless you’re planning a prostitution or gun-running racket, most things are allowed.
But to start actively trading, rather than filing zero returns year after year, you need to put in place certain things. • You need a Bulstat number. It’s still commonly referred to as that, but actually now it’s the ЕИК. Good news: you have one. It’s on your original company incorporation document, which is entitled УДОСТОВЕРЕНИЕ – meaning, quite simply “Certificate”. The number you want is your ЕИК (Единен идентификационен код) – that’s the same initials as per your personal ID. It’s a unique identification code for a company just as you have one for you as an individual. You can look up the details of any other company via their Bulstat number by going to https://public.brra. bg/CheckUps/Verifications/ActiveCondition. ra and find out who manages it, its capital and registered address. • You need your company stamp, for all withdrawals, transactions at the bank and invoices you raise. Again, good news! You should have been given this when you set up the company to buy your home. • Now something you don’t already have: a cash register. Since 2011, these have been connected directly to the National Revenue Agency (NRA). They cost under 300 leva including a contract for one years’ mobile SIM so that every time you do a transaction in cash, it’s sent through the ether direct to the NRA. Tremol (www.tremol.bg) manufactures these registers and they’re right here in Veliko Tarnovo. If you’re going to do any transactions that involve receiving cash, you need one of these. • Tell the tax office you’re trading. This must be done within seven days of your first transaction. The location of the tax office in VT is on the map, see centre pages. There are going to be forms to fill in, so you’ll need an interpreter – preferably an accountant. • VAT: contrary to popular opinion, you don’t HAVE to register for VAT. That is, until you hit the threshold in any twelve-month period. Basically, if you turn over more than 50,000 leva a year, you must register for VAT. Within 14 days. But if you can keep your declared turnover below this … you don’t. • When and if you do, you have to submit returns monthly and within 14 days following the previous month end. It’ll cost you more. • Invoicing: every invoice must be in a consistent, legal format. An invoice is called a фактура, factura, and must be stamped with your company stamp and signed on receipt of payment. Essentially, it’s more of a proforma than anything else until it is signed – then it becomes a receipt. Of course payments can be received into your company bank account as well as in cash, but each and every transaction should have a paper trail and invoice. You may want to get your accountant to produce these invoices in the correct style. See below! • OK, enough hints … you’re going to need an accountant. Because each month you need to submit a return and pay your stamp. In Bulgaria, you don’t just let it all go on happily and then sort out the books, tax liability and national insurance at the end of the year. No, you trot along to the tax office and do this monthly. There are several good Englishspeaking accountants in Veliko Tarnovo alone who can handle all your invoice production, expenses claims and monthly returns for a very reasonable fee. Even if you are totally bilingual or have a Bulgarian partner, an accountant is going to be almost absolutely necessary at some point (and probably at every point if you aren’t or don’t). • Paying your stamp: just like in the UK, there is a National Health Insurance Fund here and at least one employee per company must pay into it. If you employ Bulgarian staff, they need to be paying in too. See www.en.nhif.bg for more. You can do this by standing order or at the tax office, monthly. The minimum is currently 115 leva per month, or there’s a higher contribution of 130 per month. You get free healthcare and, if you pay at the higher level, sick pay too. • Minimum wage: as of April 1st 2012, the minimum wage is 290 leva per month. So if you’re thinking of hiring people, bear that in mind. The minimum age for employment is 16. With an accountant and an understanding of the rules, starting to trade as a company needn’t be a nightmare. www.vttimes.net • info@vttimes.net • 088 293 1456 27
Page 1 and 2: FREE Please take one Issue 4 • Ma
Page 3 and 4: Welcome This is my favourite time o
Page 5 and 6: spreads. With a student population
Page 7 and 8: St George: a saint for two countrie
Page 9 and 10: A growing concern ... We are deligh
Page 11 and 12: Useful numbers G E N E R A L FREE C
Page 13 and 14: Work on the web There are also many
Page 15 and 16: And now we REALLY reach the crescen
Page 17 and 18: To Sofia: Fast, direct trains only
Page 19 and 20: Doctors д-р ВЕСЕ МИХАЙЛ
Page 21 and 22: In the night skies … 4th May - La
Page 23 and 24: Ul. Stoyan Mihaylovski tadium kola
Page 25 and 26: every week: dates for your diary: A
Page 27: Classifi ed ads For sale: Wooden fr
Page 31 and 32: To Veliko Tarnovo from Pavlikeni 06
Page 33 and 34: Cryptic crossword kindly supplied b
Page 35 and 36: on getting my motorbikes over; now
Page 37 and 38: Letters to the editor … Dear edit
Page 39 and 40: Sporting fi xtures Start times in l
Page 41 and 42: Trade directory Builders / Craftsme
Page 43 and 44: IMPORTER OF THE FINEST QUALITY FOOD

VT Times, May 2012

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