Last Updated on October 10, 2023 by Bulgarian attorney

Capital increase of a Bulgarian company

There are various reasons why one should consider increasing the capital of his company. Obvious ones are reputation and credibility. More capital means you are serious about your business. A 2 EUR company capital can be considered too low for businesses that operate in manufacturing, construction, transportation, or other value-added businesses.

Building trust in the digital era is not only Google My Business reviews and FB ads. Building trust can be also business profiles and reports by organizations like Duns & Bradstreet where your financial data can be easily accessed. Duns & Bradstreet might be too much for a digital nomad, however, if you approach big clients or governments, your company financial and capital data will be analyzed in depth.

Capital increase of a Bulgarian company  will improve your company image and eventually turn into more sales.

Increasing capital is decreasing tax

Capitalizing profits does not exempt your company from corporate tax obligations, but it can result in savings on dividends tax. In Bulgaria, dividends tax is  5% of the amount remaining after corporate tax has been paid. To illustrate, if your pre-tax profit is 10,000 EUR, and you deduct the 10% flat corporate tax, you are left with 9,000 EUR. The 5% dividends tax is then calculated on this 9,000 EUR, resulting in a modest 450 EUR in dividends tax.

This strategy can prove advantageous, particularly if you are not a tax resident of Bulgaria and face substantial dividends tax in your home country. For example, the dividends tax in France is 34% in 2022. It might prompt you to consider establishing tax residency in Bulgaria.

It’s important to note that capitalized profits are not locked in your accounts; instead, they can be utilized for other purposes related to the development of your company.

How to increase the capital

Given that your company is already established, there’s no need to open a new deposit account. Our team is fully equipped to facilitate a seamless increase in the capital of your Bulgarian company, ensuring a hassle-free process.

Non-Monetary Contributions: Unlocking Hidden Assets

The non-monetary contributions involve the inclusion of non-cash assets into your company’s capital, often in the form of real estate such as houses, apartments, office buildings, or factories. These assets may already be owned by the company but are not currently reflected in your capital structure.

The process of incorporating non-monetary contributions into your company’s capital begins with the preparation of a set of ownership documents for the property designated for contribution. This typically includes property sketches, detailed schematics, title deeds, and tax valuations issued by the Property Agency. Our expert team can provide valuable assistance throughout this process.

To determine the value of the non-monetary contribution and the potential increase it can bring to your company’s capital, a property valuation is essential. This valuation is carried out by three independent appraisers who meticulously assess the asset, providing a comprehensive estimate of its value.

How long does it take to increase the capital

The capital of your Bulgarian company can be increased within 5-7 working days for monetary contributions and within a month for non-monetary contributions.

For more details, please get in touch with our team.

Capital increase of a Bulgarian company

Incresae the capital of a Bulgarian company