It usually takes no longer than 5 business days for the trade representative office to be officially listed and to obtain a unique number. Each foreign legal entity, meeting the requirements of Art. 24, para 1 of the Investment Promotion Act (i. e. it is necessary the person to have the right to carry out trade activities in accordance with its national legislation) shall have the right to request a registration of a trade representation.
The trade representation office of a foreign person is not a legal person. It may not carry out business activities on behalf of its own. Transactions, concluded through its agency, shall always be on behalf of the foreign person – principal. In case such transactions are concluded with local persons for the needs of the representation office, they shall be subject to the rules for transactions between local persons. Generally, its activities are effectively limited to marketing and providing support to the foreign entity.
An important application of the trade representative office is acquiring living permits in Bulgaria, which makes this kind of establishment very popular, particularly among the non-EU citizens.
In brief, a trade representative office:
- Is not a legal entity
- Does not have to keep books except for payroll purposes
- May not conduct business activities
- Provides the opportunity its representative(s) to obtain living permits in Bulgaria
- Does not pay corporate taxes since no income is generated
- May not refund VAT credit