The last report of the World Bank on Doing Business 2012 indicates that Bulgaria is among the top 50 countries in the world regarding the ease of starting a business and in the top 70 countries regarding the “Paying taxes” index. The output of this report has been formed on the base of thorough research among 183 economies from all around the globe. The indicators used are aimed to analyze economic outcomes and identify what reforms have worked, where and why. This report and its findings can be extremely useful to the international business and especially to entrepreneurs looking for objective data on relevant economy and administrative matters.
The impressive 49th place of Bulgaria in the ranking for “Starting a business” is strongly indicative for the fact that the Bulgarian government has succeeded in creating an administrative and regulatory environment which very much favors and supports starting businesses. This was achieved through several important reforms which were undertook and successfully completed, such as the considerable reduction of the start-up capital, the introduction of the unified central electronic database of the Trade Register and respectively the reduction of the registration procedure. This index is an aggregate of several very important indicators which put Bulgaria in front of most of the other European Union member states, such as the Czech Republic, Poland, the Slovak Republic, Moldova. Moreover it can be also pointed out that these performance results of Bulgaria from the last report demonstrate a serious improvement, compared to the results from the last 5 years. The indicators forming the total value of the index are the following: number of procedures for starting a business, days needed, cost for incorporating a business (presented as a percentage of income per capita) and the paid-in minimum capital (presented as a percentage of income per capita).
What does it take to start a business in Bulgaria today? The registration is comprised of 4 procedures which makes it one of the most hassle-free and fast procedures in Europe. For comparison, in the Czech Republic they are 9, in Moldova – 7, in Poland – 6 and in the Slovak Republic again 6. Namely these procedures are: preparing the needed documents for the company registration before the Trade Register of the Registry Agency, opening the company’s bank account and depositing the initial capital, submitting the documents in the Trade Register and registering for VAT. The VAT registration can be either voluntary or compulsory, in case the company’ turnover for 12 consecutive months exceeds BGN 50,000.
For accomplishing all the procedures to get your new Bulgarian company running you will spend no more than 18 days, according the World Bank report. This result is again below the average for the European region and if the company is not going to be VAT registered it even falls to 3-4 days.
The pretty straight-forward and fast registration procedure in Bulgaria is combined with very low costs involved, which is in big contrast with the situation in other European countries. In Bulgaria the expenses for establishing a company are equal to 1.5% of the income per capita, whereas in the rest of the EU member states it starts at 1.8% and ends at 17.3%. This indicator demonstrates a considerable improvement over the years in Bulgaria as over the last 7 years its value fell with more than 10% and it is now in a very close position to the regional leader – Kazakhstan.
Regarding the minimum paid-in initial capital of the company, it can be stated that this indicator bears the biggest improvement and this is due to the fact that recently the Bulgarian government eased business start-ups by reducing the minimum capital from BGN 5000 to BGN 2, which is approximately EUR 1. This indicator makes Bulgaria the best performer in the region.
(to be continued)