If you have already re-registered your company, make sure you don't forget to publish your accounts for the past years in the Commercial register. The accounts report is usually done by your company's accountant. However it is preferable not to rely only on your accountant for publishing the report in the Commercial register. Usually accountants are not familiar with the Trade Act in details and you might receive a rejection for publishing the report from the Registry Agency.

Along with the company accounts report, you have to present certain formal company documents as well as a properly filled application. Make sure you take advantage of the services of a good lawyer. Otherwise you might miss the deadline for publishing the annual accounts report, because of a rejection of the application.

Be sure to check whether your off-plan builder in Bansko is not in breach of your preliminary agreement. There is a general ban for issuing planning permissions in Bansko, issued by the mayor of Bansko. The ban is set for several areas of the town, so you should check whether your apartment is not in a to-be-building, located in the mentioned areas.

If your investment is still in the planning stage, it's likely the builder doesn't have planning permission. This situation will probably affect the deadlines in your contract. If so, it is your chance to get rid of your bad investment, by terminating your agreement unilaterally on the ground that the builder will not fulfill their obligation in the terms set in the preliminary agreement. Be sure to consult an independent lawyer, in order to get a clearer picture of the situation and independent evaluation your your case.

As from 1 July 2008 the Bulgarian State Gazette is uploaded online. Before that date it could be found only on a hard copy and with subscription. Finally we can read Bulgarian laws without paying for it and more environment friendly.

In the official website you can find the full content of the State Gazette starting from issue 30 (19 March 2008)  till now.

The Council of Ministers of Bulgaria has to adopt an amendment to the Tariff of the Commercial Register, in connection to the new changes to the Commercial Register Act. According to the recent changes, when you register a company online, the state fee is at least 25% less than the one paid when submitting a hard a copy of the application.

This amendment is to encourage people to submit their documents online and not to stay at the long queues at the Commercial Register's office.

UPDATED [29.07.2008] As from 22.07.2008, the new fees for e-services are available. As expected, they are 25% less than the usual fees.

The Commercial Register offers a service called "online submission of applications and documents". The feature of their website is available from the very beginning, but was not working properly for a couple of months. Fortunately, now we can use it to submit all kind of company documentation including:

• documents for (re-) registration of a company
• documents for changes in a company
• annual financial statements
• winding-up and liquidation etc.

In order to use the online feature, you need a digital signature (DS) issued to you by an official certified DS provider in Bulgaria. The price is usually around EUR 50. The Digital Document and Digital Signature Act stipulates that the state authorities of Bulgaria have to accept DSs issued only by a certified Bulgarian DS authority. Using the DS with the Commercial Register is fairly easy: you must fill out a web form, attach scanned copies of the necessary documents (regarding the registration or to the changes you want to make in your company) and then the Java applet takes care of the digital undersigning of the application and the attachments.

Unfortunately, the feature "online payment of state fees" is not working, so you have to do it the old-fashioned way: through a bank deposit and then scan the receipt and attach it to the online form.

The registration period of the new companies in Bulgaria grows beyond common sense!! If you want to register a new company you will have to wait about 2 months. This almost kills any startup business which is not backed up with a great amount of patience and capital.

People who want to start business and have already established business relations may lose their business partners because they can't register as quick as the market requires. Absolute legislative madness!

As I wrote in my previous posting, the government undertook certain measures but they are not enough. At least the Act for amendment of the Commercial Register Act is finally a fact - it's promulgated.

The main changes are:

• a company can be registered now with a power of attorney given to a lawyer, registered in a Bar Association
• Not all companies are obliged to re-register up to 30 July, but only those which are under the requirement to publish their annual financial reports. These are primarily big companies with huge income. See the Accountancy Act for details.
• New employees will be hired in the Registry Agency. This should decrease the paper load from the current personnel.

Personally I doubt that the latter will decrease the registration period.

EDIT: Please see Comment #2 below. I have explained the issue with the Annual Financial Statements more precisely.

On 19th March, the Bulgarian Government has drafted a Bill for amendment of the Commercial Register Act. It seems that finally the state is not blindfolded anymore. Some of the crucial amendments that are suggested are:

• The application for registration of a company and the application for reservation of name can be signed and submitted by lawyer registered in a Bulgarian bar association. This means that there will be no need that the principal of the company to be present in Bulgaria and to sign and notarize the applications anymore. Most of the documents will be able to be signed by the lawyer himself, acting on behalf of the principal using a power of attorney.
• When there is a change of the Manager or management body of the company, the new manager/management body is authorized by the law to submit the changes to the Commercial register. So far, there were problems, because the old law stipulated that the old managers obliged to submit the documents. Usually the old manager refuses to do that.
• Reservation of the company name will be for 6 months, opposing for the current 3 months.
• Reducing the required professional experience for registry clerks. So far the agency requires for the registry clerks to have at least 5 years of professional experience, but offers only 500(approx. EUR 250) Levs monthly salary, which is a kind of ridiculous for a person with professional experience more than 3 years.

Having this amendment effective will increase the personnel of the Registry Agency and it will process the documents faster. Let's hope that this will significantly decrease the company registration timeline.

Apparently the Ministry of Justice have not performed a successful reform in the Commercial register. The delays are growing huge! When you submit any documents, be prepared to wait at least 40 days, before your documents even get processed. It doesn't matter if you re-register your company or forming a new one. The fact is that the clerks are processing documents which have been submitted 40 days ago. Prepare yourself to face the new growing EU bureaucracy.

For the purpose of comparison, you should know that before the so-called-reform, a company could be registered for a week and a half with no difficulties whatsoever.

Banks in Bulgaria are competing which one will offer the best "bank product". This is a result of the property boom during the last years. A lot of small and average sized companies are applying for bank credits in order to improve their market positions: increasing the production by purchasing high end technologies, bigger advertising campaigns etc.

There are, however, people who register companies just to gain quick but illegal profit. After foundation of their business, they apply for bank credit in several banks. If the company offers some kind of security (e.g. mortgage, promissory note) banks easily approve the credit line.

Once the owner of the company obtains the funds, the company is sold to another person, who usually is socially disabled, who doesn't even have his own home to live in. Of course the company is sold legitimately. It's just the funds from the bank, which are not being transferred to the new owner. In short, a company without any assets.

After few months after the credit installments stop, the banks begin to research what have happened. They see that the company has a new owner and they immediately file lawsuits and engage law enforcement agents to collect their money.

Unfortunately the law in Bulgaria is that if the debtor doesn't possess anything, the creditor can't do anything about it. This is the workaround how some people got their fortune in Bulgaria.

It seams that the so-called "construction boom" in Bulgaria begins to take its victims. Personally I have three clients that have similar cases. They all wanted to buy a property, either for investment or for a second home. The common between all the cases is that the developers have breached the agreement with the buyers: the built property is not what it was agreed on. In short, they got not what they expected. Probably there are other people out there who just accept the problems, but it shouldn't be like that. The developers in Bulgaria are illegally earning money from cases like this.

The core of the problem is the unjustified trust of the buyer in the developers' solicitor. Always remember that if you sign an agreement that has two or more parties, you should never use the solicitor that the other party offers, to consult you on the purchase deal. Always trust your own lawyer! In Bulgaria we have a saying: "The cheaper one is the more expensive one". Paraphrased, it means that initially you will give to your own solicitor a retainer, but if you spare it, you'll probably soon face a problem at a much greater cost.

Some of the things that your own solicitor will do prior to the date of signing the purchase agreement:

• check the status of the land, where your house/apartment will be build
• check the ownership of the land/building
• check for land encumbrances (mortgages, ownership claims)
• check the credibility of the developer etc.

The above are some of the necessary checks that have to be performed. Furthermore the solicitor have to check the content of the agreement: is it legal, is it drafted in your favour or there is some catche, the way of payment, realistic deadlines, penalty amount etc. This is a necessary assistance that will save you troubles in the future.