Although scarcely regulated, trade representative offices are relatively common in Bulgaria. Article 24 of the Investment Promotion Act sets out the grounds for their legal existence. Any foreign entity which is entitled to perform economic activity under its national legislation may establish a trade representative office in Bulgaria. It must be duly registered with the Unified Trade Register of the Bulgarian Chamber of Commerce and Industry (BCCI).
Essentially, the representative office is not a separate legal personality, i.e. it does not exist separately from the foreign entity. It is not allowed to perform business activities (such as sale of goods or provision of services) and profit from them. The financial resources needed for the Representative Office’s activities are provided by the foreign entity.
The main functions of the Representative Office are promotion and marketing of the business activities of the foreign entity. Only to fulfill them, it is allowed to perform transactions. Despite not being a separate legal entity, the Representative Office must be entered into the BULSTAT Register and is recognized as “employer” by the law in case of need for personnel performing the promotion and marketing activities.
In order to establish a Representative Office in Bulgaria, a set of documents needs to be prepared and submitted to BCCI. In a nutshell, these documents shall evidence, among others, the foreign entity’s existence and economic activity, its tax compliance and the need for representative office in Bulgaria.
The ultimate benefit of having a trade representative office registered in Bulgaria is the possibility of obtaining a BCCI Certificate by a non-Bulgarian national appointed as commercial representative. It is to be noted that the Certificate must expressly state that the circumstances under Article 24, Para 1, Item 6 of the Foreigners in the Republic of Bulgaria Act are fulfilled. This document, among others, is mandatorily required in case the commercial representative intends to apply for Bulgarian “continuous” residency permit with duration up to one year on the grounds of being such commercial representative. This permit can be renewed every year, provided that the need for representative office in Bulgaria still exists and is evidenced by respective documents.
The information provided by this article is not exhaustive and is not to be considered legal opinion or advice and legal action is not to be taken due to its content.