Trade representation office
Many of our clients are foreign entities wishing to register a commercial agency or branch office of a foreign legal entity in Bulgaria. In this regard, working as lawyers in commercial cases in Bulgaria, we would like to inform you that all foreign persons engaged in commercial activities may open commercial offices in our country.
Commercial representation of foreign person has got the right to operate an independent business. The regime of any commercial representation of foreign legal entity in Bulgaria is regulated by the Law on Investment Promotion (IPA).
When establishing trade representation of foreign legal entities, they must register in the Bulgarian Chamber of Commerce and Industry (BCCI). For the establishment of foreign investments under Bulgarian law, in addition to five different companies listed above, the investor may choose one of the following corporate forms:
- OPEN a Branch office or
- OPEN a trade representation.
A commercial legal entitywhich has got the right to perform commercial activity under its national law, may register a branch in the Commercial Register. The branch is not considered as a separate legal entity. The branch is not required to have any paid up capital or separate governance structure. Its assets and liabilities are considered of the mother company.
Foreign persons authorized to do business under their national law may establish a representative offices in Bulgaria. A representative office is registered at the Bulgarian Chamber of Commerce. The office is not a separate legal entity and cannot carry on business activity. Thus, the purpose of the representative office is to perform activities such as promotions, exhibitions, demonstrations, training and advertising of products or services.
Registration of a foreign person’s representative office
the legal framework is the Investment Promotion Act, and the competent authority. The registration body is the Bulgarian Chamber of Commerce and Industry.
Procedure and documents required
- Official registration document of the foreign person issued by the relevant competent authority as per its national legislation.
- Official document regarding the persons managing and representing the foreign person.
- Resolution of the managing body of the foreign person for opening a representative office in Bulgaria.
- Special notarized original power of attorney issued by the person(s) representing the company, for the person authorised to register and manage the representative office in Bulgaria. It also is specifying the powers granted to the latter.
- Original specimen(s) of the signature(s) of the person(s) being representative(s) in Bulgaria, whether by virtue of law or by special authorisations, certified by a notary public.
- Document evidencing payment of the registration fee for the representative office.
Terms of registration
The registration terms are between 1 and 3 days (according to the declared wish and the fee paid).
Procedure for registration of a trade representation office
An applicant can be any resident with the right to conduct business under its national legislation. We can prepare for you all documents necessary for registration of a trade representation of foreign legal entity. Persons who are representatives of foreign commercial companies and have registered trade offices in BCCI can obtain a permit for continuous stay in the country. The term is one year (Art. 24, paragraph 1, p. 6 of the Law on Foreigners in the Republic of Bulgaria). The actual residence permit may be renewed on the same grounds after the expiry of the prescribed term.
Upon registration of a trade representation, you must have the funds from abroad for its maintenance. This applies also to any proceeds from SSI benefits for workers who are Bulgarian citizens. Since no representation carries on business, commercial offices are not required to file an annual tax return. For the same reason, they do not pay withholding taxes under the Corporate Income Tax Act.
Although not transact business, commercial offices are tax-liable for the social costs of staff employed under an employment contract and management. Regarding the law, transactions and payments made by residents in the country, carried out by commercial representation on his behalf or under the authority of the foreign entity, are considered as accomplished independent economic activity subject to taxation.On the grounds of Article 24, paragraph 1 of the Law on Promotion of Investment, trade represantation of foreign entities offceis are obligated to enter in the Commercial Register of the Chamber of Commerce.
When a foreign person can register as a trade representative in Bulgaria?
As lawyers in commercial matters, we will advise you that this happens when the company has got the right to conduct business, in accordance with the law of the country it had been established in.
Legal aspects in conducting business
Foreign person who has got trade representation in Bulgaria cannot carry out business on his/her behalf. This is because he/she is not a legal entity. Concluded with his/her brokerage transactions are conducted on behalf of the principal (non-resident).
Commercial representation must be recorded in the Unified Commercial Register of the Bulgarian Chamber of Commerce and Industry (BCCI), despite the fact that it is not a legal entity and has got no right to conduct business.
For more information about the types of legal services we offer, please contact us. As for as commercial ajnd compnay lawyer on +359 2/858 10 25, or by e-mail to: email@example.com.