How to Register a Bulgarian Variable Capital Company (VCC)

A Variable Capital Company (VCC) is a new type of commercial entity introduced in Bulgaria in 2024. This type of company is designed to provide greater flexibility for small and medium-sized enterprises by simplifying management and shareholder participation.

The main differences between a VCC and other legal forms such as LLC (OOD) and JSC (AD) are:

• Variable Capital – A VCC does not have a fixed minimum capital, allowing shareholders to freely contribute and withdraw funds without complex legal procedures.
• Simplified Management – The company can be managed more easily, without the need for traditional general meetings for each capital change.
• Flexibility in Shareholder Participation – The process of adding or removing shareholders is significantly easier compared to LLCs and JSCs.

What Are the Advantages of a VCC?

A VCC offers several advantages that make it attractive for entrepreneurs:

Reduced Administrative Burden

Unlike traditional companies that require extensive paperwork and legal procedures for capital changes, a VCC allows for automatic adjustments without the need for repeated filings or approvals. This significantly reduces the administrative workload, making it easier for business owners to focus on growth rather than compliance tasks.

Quick and Easy Shareholder Registration

New shareholders can be added to the company seamlessly without the need to modify the company’s founding documents or bylaws. This feature simplifies expansion and enables businesses to bring in new partners or investors without legal delays or unnecessary bureaucratic hurdles.

Easier Investment Attraction

Since investors can contribute or withdraw funds without complex restrictions, VCCs are particularly appealing to venture capitalists and business angels. The ease of capital flow allows businesses to attract financial backing more efficiently, ensuring they have the necessary resources to scale operations without lengthy negotiations or rigid corporate structures.

Ideal for Startups

Startups often operate in dynamic environments where financial needs fluctuate. A VCC structure enables these businesses to launch with minimal capital and subsequently adjust their financial strategies based on market demands. This flexibility is crucial for companies that need to pivot quickly, explore new opportunities, or scale up without being constrained by rigid capital structures.

What Documents Are Required for VCC Registration?

To register a VCC, the following documents are required:

1. Articles of Incorporation – Specifies shareholders, initial capital, and management rules.
2. Application for Registration – Completed according to an official template and submitted to the Commercial Register.
3. Minutes of the Founding Meeting – A document confirming the decision to establish the company.
4. Declaration of Beneficial Owners – A mandatory document ensuring ownership transparency.
5. Standardized Declarations – Confirming that shareholders and directors meet legal requirements.
6. Registration Fee Payment Receipt – Proof of payment of the state registration fee.

How to Submit a Registration Application to the Commercial Register?

The VCC registration process in the Commercial Register includes the following steps:

Preparation of Documents

All necessary documents must be carefully completed and signed by the founders and, if applicable, notarized. These documents include the Articles of Incorporation, declarations of compliance, and shareholder agreements. Ensuring accuracy at this stage is critical to avoid delays in the approval process.

Payment of State Fee

The required registration fee must be paid in advance through a bank transfer or electronic payment platform. Proof of payment should be attached to the application, as missing receipts could lead to application rejection or processing delays.

Submission of Application

The completed registration application, along with all required documents, must be submitted to the Commercial Register. This can be done electronically using a qualified electronic signature, which speeds up the process and reduces paperwork, or physically at the Registry Agency office, where an official will verify the submission.

Review by the Commercial Register

Upon submission, the competent authorities at the Commercial Register examine the application for completeness and compliance with legal requirements. They may request additional documents or corrections if any inconsistencies or missing information are found. This stage ensures that all necessary legal obligations are met before approval.

Issuance of a Registration Certificate

If the application meets all requirements, the company is officially registered, and a Unique Identification Code (UIC) is issued. The UIC serves as the company’s legal identifier for tax, banking, and contractual purposes. Once obtained, the business can commence operations and complete additional registrations such as VAT registration if required.

The Variable Capital Company (VCC) is an innovative legal form that provides significant flexibility for businesses in Bulgaria. It is particularly suitable for startups and companies seeking easy access to financing and simplified administrative procedures. If you are looking for a way to start a business with fewer bureaucratic hurdles, a VCC could be an excellent choice for you.

Additionally, if you’re planning on deregistering your company, check Company Deregistration in Bulgaria: Steps and Requirements.