31. Q: Are there any limitations for foreign citizens who intend to set up a company in Bulgaria?
A: The laws in Bulgaria predict absolutely the same rights and obligation to both local and foreign citizens regarding registration of a new company.
32. Q: Could you please recommend to me what would be the best for my new company’s owner – to be a physical person or another legal entity abroad?
A: Actually there is no significant difference for the company. The only difference is in the registration process in which should you decide to chose the legal entity to be the owner a little bit more documentation will be required. Apart from that, both options are perfectly eligible.
33. Q: Each subsidiary company from our holding uses trade mark and has to pay royalties. Is there some withholding tax due for that?
A: Yes, there is WHT for Author’s and license remunerations. In compliance with art. 200a from the CIT act the WHT rate will be 5 % if simultaneously the both conditions below are met:
– the owner of the income is a foreign legal entity from Member State of the European Union;
– the local entity – payer of income, has place of transaction in Bulgaria and is a person connected with the foreign legal entity – holder of the income;
If the both conditions above are not met then the WHT for Author’s and license remunerations will be 10% /art.200, para 2 from the CIT act/.
34. Q: Could you please send me rates of social an health insurance for employees?
A: The social & health contributions payable by the employer on behalf of the employee may vary depending on 2 main conditions – the labour category of the employee and the employee’s wage. Also please kindly note that in Bulgaria is applicable a maximum income for deduction of social & health contributions for both employee and employer which at the moment is BGN 2200.
35. Q: Does a firm have to pay another tax different from social and health for its employees?
A: No, the employer don’t have any other tax obligations to its employees apart from the social & health contributions payable by the employer on behalf of the employee.