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Fintech vs. Traditional Banks: The Legal Sandbox of Bulgarian Company Incorporation

Incorporating a limited liability company in Bulgaria is relatively straightforward. Yet one seemingly simple requirement raises an interesting legal question. Under Bulgarian law, the share capital must be paid up before registration, and evidence of the capital contribution must be submitted to the Commercial Register. The applicable regulations expressly refer to capital deposited with a bank. But what happens when the funds are held with a licensed European payment institution or electronic money institution instead? The distinction becomes particularly interesting when comparing different financial service providers:▪ Wise, a licensed payment institution, requires a business registration number as part of its standard verification process.▪ Revolut...

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Could the Bulgarian Variable Capital Company become the preferred corporate form for startups?

The Variable Capital Company (дружество с променлив капитал or VCC) is still a relatively new corporate form under Bulgarian law. Its legal framework, however, offers considerable flexibility for startups, founders and investors. Unlike the traditional Bulgarian limited liability company (OOD), the VCC provides significant flexibility in structuring its capital and the rights attached to company shares. Different classes of shares may be created and may carry different rights, including multiple voting rights, non-voting rights, preferential dividends, liquidation preferences and redemption rights. Certain classes of shareholders, or even individually specified shareholders, may also be granted special voting rights, including veto rights...

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30 June 2026 is only weeks away. But is Bulgaria ready for cross-border conversions, mergers and divisions?

The implementation of the EU Mobility Directive introduced a new framework allowing companies to carry out cross-border conversions, mergers and divisions within the European Union.For businesses, this is more than a legal reform. These procedures may play an important role in corporate restructurings, group reorganisations and investment transactions.Yet a practical question remains.Can these procedures already be effectively used in Bulgaria?The amendments to Ordinance No. 1 on the Commercial Register provide that the relevant provisions become applicable upon confirmation of technical readiness by the Registry Agency, but no later than 30 June 2026.As of the date of this publication:• No publicly...

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One signature from a managing director can create major liability for a company — and the damage is often discovered too late

Examples may include:• employment agreements or annexes containing excessive termination compensation clauses;• commercial contracts featuring disproportionate penalty clauses;• agreements concluded at non-market conditions or containing otherwise unfavorable terms.The problem becomes even more serious when documents are backdated after the managing director has already left the company.Under Bulgarian law, a backdated agreement may be challenged on the grounds that the director no longer had representative authority at the actual signing date.However, proving backdating in practice is an uphill battle. Forensic methods are limited, qualified experts are scarce, and some examinations involve partial destruction of the document — a risk courts are...

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Posting employees within the EU/EEA or Switzerland: what employers need to know

Posting employees within the EU/EEA and Switzerland involves more than arranging travel and accomodation.Employers must comply with both Bulgarian labour law and the mandatory employment rules of the host state.During the posting period, employees must be granted at least the minimum working conditions applicable to local employees performing the same or similar work in the receiving state. Employers cannot agree on remuneration below the minimum requirements established under the legislation of the host country.Under Bulgarian law, employers are also required to cover travel and related expenses, including transportation to and from the host state, as well as certain travel costs...

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Termination of a Shareholder’s Participation: When Is the Court Obliged to Appoint an Expert to Determine the Value of a Company Share?

With its recent Judgment No. 29 of 30 January 2026 (Commercial Case No. 451/2024), the Supreme Court of Cassation provides important clarification regarding the determination of the value of a company share upon termination of a shareholder’s participation in a company. The decision reaffirms the Court’s established case law on this matter. How is the value of a company share determined under Article 125 of the Commerce Act? According to the consistent case law of the Supreme Court of Cassation: - as a rule, the value of a company share is determined on the basis of an interim financial statement (interim balance sheet)...

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Supreme Court of Cassation on Easement Rights in the Joint Use of Electronic Communications Infrastructure

By Decision No. 83 of 6 February 2026 in civil case No. 3844/2024, the Supreme Court of Cassation provided key clarifications regarding the proprietary nature of the joint use of electronic communications infrastructure — an issue of particular importance for operators and sector stakeholders. In the proceedings, one of the parties was represented by attorney Gergina Kyoseva. Nature of the Easement Right in Joint Use The Supreme Court held that, in cases of joint use, a limited real right (easement) arises in favour of the subsequent undertaking, rather than a purely contractual right. The Court emphasized that this right is identical in content...

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Share Capital of Companies Following the Introduction of the Euro

With the introduction of the euro as the official currency of the Republic of Bulgaria, the legislation provides a specific framework for the treatment of company share capital. Pursuant to the Law on the Introduction of the Euro, as of the date of the euro’s introduction, the share capital registered with the Commercial Register of limited liability companies, joint-stock companies and partnerships limited by shares is automatically replaced by the corresponding values in euro and euro cents. This replacement takes effect by operation of law and is technical in nature. It does not constitute an increase or decrease of share capital, but...

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Gergina Kyoseva advises Bulsatcom on the Group’s financial restructuring

Gergina Kyoseva assisted by co-counsel Liliya Tsoncheva advised Bulsatcom EAD – the biggest Bulgarian TV and satellite operator in relation to its financial and operational restructuring. The restructuring process took more than two years during which Bulsatcom settled its current debt to commercial and financial creditors, terminated major litigation and enforcement cases and reached settlement with Bulgaria Sat EAD – the owner of Bulgaria Sat- 1 satellite, and its principal lender the Export-Import Bank of the United States. The complex financial transaction consisted in restructuring of Bulsatcom’s EUR 80 million existing syndicated bank facility initially provided in 2014 by leading international banks through conversion of part of the debt to equity...

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How Setting Up a Bank Account Became The New Challenge For The Business In Bulgaria

Preventing and combating money laundering and terrorism financing has been a hot topic on EU level for some time now. As a result of the new rules and the implementation of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing in the national legislation of the Member States, banks and other entities covered by the EU anti-money laundering rules are required to apply increased checks to better identify any suspicious money flows.  “The road to hell...

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