Bulgaria's Variable Capital Company: No Bank Account, No Minimum Capital, No Problem

How Bulgaria’s newest company type eliminates the biggest headache for foreign entrepreneurs, and why 2026 is the year to pay attention

If you have spent any time looking into setting up a business in Europe, Bulgaria has probably come up in your research. A flat 10% corporate income tax, the lowest in the EU. A 5% tax on dividends. Full EU membership since 2007. And as of January 2026, Bulgaria officially adopted the euro, which means no more currency conversion headaches, full SEPA integration, and euro-denominated bank accounts by default.

On paper, it sounds almost too good. And for a lot of foreign entrepreneurs, there has been one very real catch that turned the whole thing into a frustrating exercise: opening a bank account.

Let me explain.

The Bank Account Nightmare

If you want to register a traditional Bulgarian LLC (called OOD in Bulgarian), you first need to open a so-called capital-raising bank account (набирателна сметка) at a Bulgarian bank. Only after you get a bank certificate can you submit your registration to the Commercial Register.

Sounds simple enough. Except since 2019, after Bulgaria tightened its Anti-Money Laundering rules, the banks have made this process borderline impossible for non-residents.

Here is what that looks like in practice. Several banks charge you a few hundred euros just to review your application, with no guarantee they will say yes. Others accept your documents and then… nothing. No response. No account. No refund. Some branches flat-out refuse to serve foreigners. And nearly all of them want to see proof of Bulgarian residency, which creates an obvious chicken-and-egg problem: you need a bank account to register your company, but you need a company (or residency) to convince a bank to open an account.Opening a bank account for non-residents has become “an almost Herculean feat” due to banks’ heightened AML sensitivities. This has been the single biggest practical barrier for foreign entrepreneurs wanting to use Bulgaria’s tax advantages. Not the law. Not the taxes. The banks.

Variable Capital Company

In August 2023, the Bulgarian parliament did something genuinely useful. They amended the Commerce Act (Търговски закон) and created a brand new, sixth type of company: the Variable Capital Company, or VCC (in Bulgarian: Дружество с променлив капитал, abbreviated ДПК).

The whole framework sits in Chapter 15а of the Commerce Act, Articles 260а through 260т. After some delays with the Commercial Register’s IT systems, VCC registrations became possible on 15 December 2024. By the end of March 2025, over 110 VCCs had already been registered.

What makes this company type different? Several things, but the headline feature is this:

You do not need a bank account to register a VCC.

That is not a workaround or a gray area. It is the explicit design of the law. Under Article 260д of the Commerce Act, the capital of a VCC is variable and not subject to registration in the Commercial Register. No registered capital means no capital-raising account. No capital-raising account means no bank visit, no review fees, no unexplained rejections, no Catch-22.

You incorporate first. You deal with banking later, on your own terms, as an existing registered company, with more leverage and more options (including EU-licensed fintechs that offer euro IBANs without the traditional bank drama).

And here is the part that really matters for people reading this from abroad: you can register a VCC entirely remotely, without ever setting foot in Bulgaria. With the traditional OOD, you typically had to fly to Sofia just to sit in a bank branch and hope they would open your account. With a VCC, the whole process (preparing the documents, notarizing what needs notarizing, filing with the Commercial Register) can be handled through a local lawyer with a power of attorney. No plane tickets. No hotel bookings. No awkward afternoons in Bulgarian bank lobbies.

What Else Makes the VCC Different?

The no-bank-account thing is the showstopper, but there is more worth knowing.

Practically zero minimum capital. Shares in a VCC can have a nominal value as low as €0.01. Compare that to a Joint Stock Company (AD), which requires roughly €25,000 in initial capital. Even the OOD, while technically only needing about €1, still forces you through the bank account process.

Your shareholders stay private. Under the VCC framework, shareholder names and details are not published in the Commercial Register. They are kept in an internal Shareholders’ Book managed by the company. Only the Ultimate Beneficial Owner (UBO) needs to be disclosed, which is standard across the EU anyway. This is a meaningful privacy advantage over the OOD, where shareholders are public information.

Capital changes happen without paperwork. Since the capital is not registered, you can increase or decrease it without filing amendments, paying fees, or waiting for registry approval. The General Meeting simply confirms the capital figure once a year alongside the annual financial statements. That is it.

Share transfers are simple. Transferring shares in a VCC can be done by simple written agreement, no notary required (unless the Articles of Association say otherwise). In an OOD, share transfers require notarized signatures and a filing with the Commercial Register under Article 129 of the Commerce Act. The cost and hassle difference is significant.

Virtual meetings are allowed. The VCC law expressly permits holding general meetings remotely, by video call, email, messaging apps, whatever the shareholders agree on. Traditional OODs and non-public Joint Stock Companies do not have this option under Bulgarian law. For founders spread across different countries, this alone is worth the switch.

Employee stock options are built in. Under Article 260й of the Commerce Act, VCCs can set up employee stock option plans (ESOPs) directly, with employees able to acquire up to 15% of shares. This is something that has been awkward and legally uncertain with OODs, and the VCC framework handles it explicitly.

Multiple share classes. Unlike the OOD (which only allows one class of shares), the VCC can issue different classes with different rights: voting preferences, dividend priorities, veto rights, you name it. This is the kind of flexibility that matters if you are taking investment or structuring deals between co-founders with different roles.

The Catch: Size Limitations

The VCC was not designed for every business. The Bulgarian legislature deliberately limited it to small and medium-sized enterprises. According to Article 260а, paragraph 3 of the Commerce Act, a VCC must meet these criteria:

• Fewer than 50 employees (average headcount)
• Annual turnover not exceeding approximately €2,045,168 (this was BGN 4,000,000 before euro adoption, converted at the fixed rate of 1 EUR = 1.95583 BGN)
• And/or asset value not exceeding approximately €2,045,168

These thresholds mirror the definitions for micro and small enterprises under the Bulgarian Small and Medium Enterprises Act.

If your company outgrows these limits, it must be converted into a standard LLC (OOD) or Joint Stock Company (AD) by the end of the financial year following the annual meeting where the breach was identified. If you do not convert in time, the court can dissolve the company at the prosecutor’s request.

Honestly? If you are hitting €2 million in turnover, converting to an OOD is a manageable legal procedure, and by that point you will have an operational track record, established banking relationships, and the resources to handle it. Think of the VCC as the vehicle that gets you from zero to operating. The conversion, if it ever comes, is a good problem to have.

A Quick Comparison

For those of you who think in tables, here is how the VCC stacks up against Bulgaria’s existing company types:

The Tax Picture (Because That Is Why You Are Here)

The VCC does not get any special tax treatment. It is taxed exactly like any other Bulgarian company. But that is the whole point. Bulgaria’s baseline is already one of the most competitive in Europe:

10% corporate income tax. Flat. No brackets, no surcharges, no local business taxes. The EU average is around 21%. Germany and France are above 25% once you count everything.

5% dividend tax. When you distribute profits to yourself as an individual shareholder, there is a 5% withholding. Dividends between Bulgarian companies (with at least 10% ownership held for a year or more) are tax-free.

10% personal income tax. Also flat. Relevant if you are considering relocating to Bulgaria.

No advance tax payments for businesses with annual profits under approximately €150,000.

And now, with euro adoption, you get all of this inside the eurozone. Your Bulgarian bank accounts are in euros. SEPA transfers to and from Bulgaria work the same as transfers between any other eurozone countries. The currency risk that used to be a footnote concern is simply gone.

How Registration Actually Works

The process is fairly straightforward, though I strongly recommend working with a Bulgarian lawyer, especially for the Articles of Association, which is the document that governs almost everything about how your VCC operates internally.

Based on Article 260г of the Commerce Act, you will need to prepare and submit to the Commercial Register:

1. Articles of Association (or a Founding Act if you are the sole founder). This covers share classes, nominal values, shareholder rights, transfer restrictions, management structure, profit distribution, all of it.
2. A redacted copy of the Articles with personal data removed.
3. Declarations from founders confirming no legal obstacles (e.g., not bankrupt, see Article 260а, para. 2).
4. Resolution appointing the manager or management board.
5. Notarized consent and specimen signatures of the manager(s).
6. Declaration of document authenticity.

What you will not need: a bank certificate, a capital deposit receipt, a flight to Bulgaria, or proof that you personally visited a Bulgarian bank branch. The entire registration can be done remotely through a Bulgarian lawyer acting on your behalf.

The Commercial Register typically processes applications within a few business days.

Management: Two Options

A VCC can be managed either by a Manager (like in an OOD, one or more individuals running the show) or by a Management Board (like in a JSC, a board that appoints executive members from among itself). Both natural persons and legal entities can fill these roles.

Unlike shareholder details, the names of managers and board members are published in the Commercial Register. That is public information.

A Few Honest Warnings

I would not be doing my job if I did not mention the things to watch out for.

The Articles of Association matter more than you think. The VCC framework is deliberately flexible. The phrase “unless otherwise agreed in the Articles of Association” appears throughout Chapter 15а like a refrain. That flexibility is great, but it means a badly drafted Articles can leave you exposed to disputes, dilution, or even hostile takeovers. Do not use a template you found online. Pay a lawyer who understands this structure.

You will still need a bank account. The exemption covers registration only. To actually operate (receive payments, pay suppliers, handle payroll, file taxes) you need banking. Many entrepreneurs start with fintech solutions (Revolut, Wise, iCard, all of which offer euro IBANs) and transition to traditional banks once the company is up and running. It is a practical workaround, not a permanent solution for every business.

This is still a new structure. The VCC has only been registerable since December 2024. Court interpretations, administrative practice, and even bank attitudes toward VCCs are still evolving. You are an early adopter, with all the advantages and uncertainties that implies.

Professional support is not optional. Bulgarian corporate law, tax compliance, and accounting have their own rules and rhythms. A local lawyer and accountant who understand the VCC framework, and the practical realities of doing business here, are essential, not optional.

Do you want to start a company in Bulgaria?

If you are considering it, get in touch. I am happy to walk you through the specifics for your situation.