Innovation Unveiled: Bulgaria’s bold leap with Variable capital company

On 2 August 2023, the Bulgarian legal landscape was dramatically invigorated with the most significant transformation in Commercial Law over the past three decades, as announced in the State Gazette. This transformative act heralds the inauguration of a variable capital company (VCC), a pioneering and avant-garde form of corporate entity.

This groundbreaking initiative is tailored to resonate with the unique characteristics of innovative and growth-driven startup enterprises. It also echoes Bulgaria’s visionary commitment to blossoming as a strategic nexus for cutting-edge and technologically-savvy corporations. Inspired by eminent European counterparts such as Germany’s Unternehmergesellschaft (UG), France’s Société par actions simplifiée (SAS), and akin forms across the continent, Bulgaria’s new corporate entity weaves a solution for emergent businesses.

A hallmark of this enterprise’s allure is the capital’s exemption from registration in the Commercial Register, a trait which bestows upon its distinctive nomenclature. This capital is consummated at the financial year’s denouement with the embrace of the annual financial statement, its magnitude liberated from traditional constraints, able to descend to the merest penny.

The new entity further tantalizes with an array of enthralling rights for partners: the commanding drag-along, the anticipatory preemptive right, the congenial tag-along, and more. This exquisite legal tapestry affords enhanced magnetism for external investors, ensures a sanctuary for minority shareholders, and unfurls innovative pathways for growth. Such regulation is in harmonic alignment with practices of international repute, with additional foresight for employee stimulation within VCCs.

Anticipation surrounds the new entity, with expectations of a graceful reduction in administrative burdens, a fleet-footed avenue for business genesis, and a more facile transfer with company shares for the allure of fresh capital and investment.

With a deadline etched for June 30, 2024, the Commercial Register’s arms are open to embrace this fresh enterprise, though hope glistens for an earlier arrival.
This watershed moment heralds Bulgaria’s ascendancy as an innovative and technologically poised jurisdiction, gracefully extending its arms to both sprouting startups and robust companies, all drawn by the allure of supple corporate legislation.

Should your imagination be kindled by an innovative enterprise or a desire to expand your horizon within Bulgaria’s verdant fields, allow us the pleasure to explore with you the exquisite potential of a variable capital company. Our legal connoisseurs stand ready to unfurl a sumptuous array of services, inclusive of registration artistry, a resplendent package of internal GDPR compliance, AML provisions, and beyond.

Progressive lawyers is very excited to be in this industry. If you need any assistance just give us a call or send us an e-mail. We would be happy to brain-storm together at any time.

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