2019 is coming to an end. How was the year remembered from a financial point of view? And what awaits us in the next 2020?
According to the National Statistical Institute, the business climate in Bulgaria was unstable in 2019. In late spring, the numbers rose, but in October they dropped to the level of the beginning of 2018. However, Bulgaria remains an attractive country for living and doing business.
In the world ranking of countries with favorable business climate, Bulgaria occupies a low position. However, according to immigrant businessmen, doing business here is quite calm, and the profit tax rate remains the lowest in Europe — 10%. Business owners can be primarily misled by untimely filing of statements or accounting errors when dealing with transactions, especially within the European Union, then checks and fines cannot be avoided.
Taxes in Bulgaria are still low, it is important to pay only on time. Beginner businessmen are not accepted to «bother» with constant checks. The favorable conditions open up wide opportunities for developing your own business and making a profit.
As practice shows, you can open a company in Bulgaria in just a few days, not only for Bulgarian citizens, but also for foreigners. More seasonal job opportunities have emerged this year for third-country nationals.
In 2019, real estate has become more affordable and the number of offers on the market has increased. Although it takes several months to obtain construction permits, there are no particular problems with a properly prepared and approved project. The main thing is to comply with the condition — first the design and the building permit — then the construction, not the other way around. Practically, in order to live and do business in Bulgaria, one needs the correctness and proper consistency of actions, timely accounting and making the necessary payments, then life goes smoothly and calmly. As for the banks, they do not hand out loans here, they carefully examine each customer. If you decide to close your business, the process may seem too long and complicated, but only if you manage it on your own. A specialist (accountant or lawyer), with a power of attorney, deals with this issue quite easily.
The requirements for online stores have changed a bit. Now, before starting an activity, it is imperative to notify the tax inspectorate with the provision of detailed information regarding software, the use of payment platforms, etc.
In 2019, many immigrants in Bulgaria faced the consequences of adopting a Law on measures against money laundering. Banks have become extremely reluctant to open accounts for foreigners who do not yet have any residency status in Bulgaria, due to the need for preliminary checks on such persons. This also applies to accounts for legal entities with the participation of foreign citizens. For free work with banks, it is best to foresee obtaining a residence permit in Bulgaria, which is easy enough for EU citizens and more difficult for citizens from third countries.
We draw attention to the change in the Bulgarian Law on foreigners. In 2019, investment citizenship was revoked. Now it is impossible to obtain a passport by investing in the Bulgarian economy, other reasons are needed to become a citizen of the country.
The “Bulgarian Expert” company is ready to assist in the preparation of the necessary documentation, obtaining permission, legalizing your stay in Bulgaria, as well as helping you at all stages of starting and running a business in Bulgaria.
What awaits us in 2020?
Yavor Kuyumdzhiev, a former deputy minister for economics and energy, predicts a new financial crisis by the end of 2020. From his point of view, Bulgaria, being the only Eastern European country that has not attracted a single large producer in 30 years, is in a vulnerable position and should protect its state interests, especially in the energy sector.
Despite the expectation of a global economic crisis, Bulgarian managers and experts are optimistic about the future and hope that the country’s business climate will improve in 2020.
Starting from the new year, the minimum wage in Bulgaria will increase by BGN 50 and will be BGN 610. This means that in order to obtain a D visa, as well as to obtain or renew a 6-month residence permit, you will need to deposit a larger amount in your bank account than before — BGN 3660. To extend your residence permit by one year, respectively you will need BGN 7320 in your account. Those who have already obtained a permanent residence or long-term residence permit will have to pay more social security contributions.
As of July 1, the minimum pension, which becomes BGN 250, has also increased. Accordingly, in order to receive a residence permit for a year, pensioners must submit a certificate of availability on the account of BGN 3000.
Changes in Bulgarian legislation are expected in 2020, which will affect foreign citizens and those with businesses in Bulgaria.
The Aliens Act will introduce changes governing family reunification. A procedure for granting a residence permit to foreigners who have been granted stateless status and cannot obtain a permanent or long-term residence permit is introduced. In connection with the amendments to the Child Protection Act, it became possible to grant a residence permit to foreign children who are in Bulgaria without parents or guardians until they reach the age of majority. It will be easier for foreigners of Bulgarian origin to obtain a residence permit in the country, especially if they are researchers or students. In addition, there was an opportunity for the Migration Service not to provide documents for a paid state fee for a residence permit if payment information could be obtained electronically.
Changes affecting tax payments will take effect from January. In particular, they will affect the VAT Act. To date, many companies are avoiding VAT registration by registering new companies (legal entities). This practice will end, there will be new restrictions. For the purposes of combating tax evasion, the Corporate Income Tax Act will be amended. Detailed advice on taxation in Bulgaria in 2020, you can obtain in the company «Bulgarian Expert».