Last Updated on April 1, 2023 by Bulgarian attorney
Setting up an AIF in Bulgaria
Advocate Markov’s highly specialized team can offer assistance in establishing an Alternative Investment Fund (AIF) in Bulgaria, which can be promoted in all other EU member states. The team provides comprehensive advice on all aspects of setting up and managing an AIF in Bulgaria, including:
- Choosing the appropriate legal entity type for the AIF, such as a joint-stock company, limited partnership by shares, or limited partnership.
- Meeting the minimum registration capital requirements for the chosen entity type.
- Advising on the regulatory requirements for establishing and operating an AIF in Bulgaria, such as obtaining licenses and approvals from relevant authorities.
- Preparing the necessary legal documentation.
- Developing a sound investment strategy for the AIF.
- Advising on tax implications and ensuring compliance with tax regulations.
- Providing ongoing management services, such as accounting, reporting, and regulatory compliance. With Advocate Markov’s assistance, setting up and managing an AIF in Bulgaria can be a hassle-free process, allowing you to focus on your investment objectives.
Corporate structure of AIF
The AIF has the flexibility to adopt a corporate structure that suits its specific needs. This could include being organized as a limited company, limited partnership, or joint stock company. The chosen entity type will establish the fundamental characteristics of the Fund, such as whether it is open or closed, and whether it has a family or commercial focus.
Management of AIF
According to legislation, AIFs have the option to be managed either by a registered or licensed MAIF or as a sole-managed AIF. In the case of sole management, the specific management structure will depend on the chosen entity type and the provisions outlined in its Minutes. For instance, if the AIF is established as a joint stock company (АД), its management may consist of either a Board of Directors or both a Board of Directors and a Supervisory Board, which would represent a one-stage or two-stage management control system, respectively.
Registration or license
Not all cases require licensing with the Bulgarian Financial Supervision Commission (FSC) for an AIF. In some instances, a simple registration may be sufficient for AIFs that will manage up to 100,000,000 EUR. Our team can assist you in completing the necessary application documents to either register or license a MAIF with the FSC. Once your AIF is initially registered, you can later apply for a license if your fund development requires it. Our team will guide you through the process and provide you with the necessary support to ensure compliance with all applicable regulations.
Capital requirements of AIF
The minimum registration capital required for an AIF can vary depending on several factors, including the chosen legal structure, whether the AIF is sole or professionally managed, the type of registration or license required, and the amount of capital that will be managed.
The minimum registration capital required for an AIF will depend on the chosen entity type. For instance, a joint-stock company (EAD/ AD) or a limited partnership by shares (KDA) will require a minimum capital of 50,000 BGN (approximately 25,500 EUR). On the other hand, a limited partnership (KD) can be established with a minimum capital requirement of just 100 EUR. However, if the AIF is going to be sole-managed, the capital requirements will be higher. Furthermore, if the managed funds exceed certain thresholds, the capital requirements will also increase.
The advantages of establishing an AIF in Bulgaria are significant
As Bulgaria is an EU member state, there is no notable difference in reputation between registering and managing an AIF in Bulgaria versus Luxembourg. Additionally, the costs associated with registering and operating an AIF in Bulgaria are substantially lower, approximately 5 to 10 times less than in Luxembourg. This cost difference also applies to appointing a MAIF (Manager of Alternative Investment Fund) to operate the AIF if it does not have a valid license to operate independently.
If you need assistance in setting up an Alternative Investment Fund in Bulgaria, please get in touch with us.