Business jurisdiction comparison-Singapore and Bulgaria

Bulgaria and Singapore are two of the most well-known and popular offshore financial centres in the world. Both offer tax advantages, ease of business registration, a skilled labour force and straightforward corporate compliance regulations.

Bulgaria as an Offshore Financial Centre

Bulgaria is an attractive offshore financial centre due to its location advantages, tax-friendliness and high availability of an affordable trained workforce. Foreign entities can also do business in Bulgaria relatively easily, although there are liability concerns when doing so.

Setting Up a Business in Bulgaria

Bulgaria offers many advantages to prospective business owners, such as a simplified registration process and low capital requirement. The required minimum capital for launching a private limited liability company – the most common entity type in Bulgaria – is just €1. The registration process generally takes no more than three weeks.

First,partners will be required to meet before a public notary to adopt the company’s constitution, define the company's status and establish the entity’s hierarchy.The founder must sign a notarized agreement, and a certified copy of the company’s declaration of incorporation will be issued. A fee will apply, but these formalities should be completed in a single day.

Next, the company’s founder or an authorized person must open up a company bank account in a commercial bank. Any paid capital will be blocked until the Commercial Register approves the business formation. When opening the bank account, a receipt will be given that must be presented to the Commercial Register. A fee will be required to open a business bank account, which will vary according to the chosen bank.

After opening a bank account, an A4 registration form must be filled out and submitted to register the business with the Commercial Register. Each director must produce two sworn and notarized affidavits, as per Articles 141 and 142 of the Trade Act and Article 13 of the Commercial Registration Act. Other documents must also be presented, including:

  • Appointment of cadres decree
  • Incorporation certificate
  • Bank receipt issued when opening a bank account
  • Notarized associates’ signatures specimens

Several types of entities are available when launching a business in Bulgaria, including:

Limited Liability Company (OOD)

  • A single shareholder
  • A single director

In Bulgaria, a limited liability company, or OOD, can be incorporated with:

If the company has a single shareholder, the abbreviation for the entity becomes EOOD to denote that it is a single-member company.

The shareholder and director can be of any nationality and not necessarily a resident in Bulgaria.

Joint Stock Company (AD/EAD)

To form a joint stock company (JSC), there must be:

  • A single shareholder (known as EAD), or
  • Two or more shareholders (known as AD)

A larger capital investment is required with this business entity: a minimum of €25,000,or 25% of that amount paid at the time of incorporation.

Additionally, a joint stock company must have:

  • An appointed certified accountant
  • Appointed at least three Board of Directors members

A JSC may be advantageous for owners who plan to raise capital in Europe, as Bulgarian law does not restrict the transfer or issuance of shares with this entity type. JSCs also have the advantage of having the ability to be listed on either the Sofia Stock Exchange or another stock exchange in the European Union, including the London Stock Exchange and Euro Next.

Limited Partnership

The Bulgaria limited partnership requires:

  • At least two partners with different powers and liability over the entity’s debt

A minimum of one general partner must be fully liable, while the remaining limited partners will only be liable to the extent of their contribution (which is unpaid) to the partnership.

Limited partnerships are generally formed by those who want to provide professional services, such as lawyers and accountants. This entity type may also be a practical option for those who already have a partner in Bulgaria.

Free Zone Company

Non-residents can form and register a wholly-owned foreign company in one of Bulgaria’s free economic and industrial zones. Free economic zones are intended to house export-oriented businesses, while the industrial zones are intended for companies that will provide infrastructure and facilities for manufacturing operations.

The minimum requirements for forming a free zone company will vary from one zone to another. Generally, the company must provide a minimum number of new jobs and meet certain capital requirements.

Free zone companies are best suited for manufacturing- or export-oriented businesses.

Sole Proprietorship

Residents and foreigners can both register as a sole proprietor in Bulgaria. Sole proprietors must register in the Bulgarian Trade Register. There are no capital requirements for this entity type, but limited liability is not conferred to the sole proprietor. In other words, the owner of the business is wholly liable.

Forming a sole proprietorship may be a practical option for self-employed foreigners living in Bulgaria and local residents.

Yearly Corporate Compliance

  • Annual financial statements must be filed with the Bulgarian Trade Register before March 31st each year. This applies to all companies.
  • Joint-Stock Company: Annual financial statements and balance sheet must be audited by a certified accountant, which must be filed with the Bulgarian Trade Register before March 31st each year.
  • All companies are required to maintain records of the financial statements and accounts.
  • All enterprises must maintain a registered office address in the country.


  • Bulgaria has one of the lowest corporate tax rates in all of Europe: 10%. Sole-proprietorships and limited partnerships have a standard tax rate of 0%.
  • Tax returns must be paid and filed by March 31st each year. A 12% monthly interest fee will apply to any outstanding taxes.
  • ValueAdded Tax (VAT) registration will be required for businesses with a turnover of over €25,000. The VAT rate in Bulgaria is 20%. Corporate VAT returns must be filed by the 14th of every month.
  • Dividends distributed between domestic and EU/EEA entities are not subjected to corporate withholding tax.
  • Global business income is taxed.
  • Capital gains from sales of shares through the Bulgarian Stock Exchange or EU/EAA stock exchanges are exempt from taxes.
  • Royalties and interest paid to non-EU/EAA entities are subject to a 10% withholding tax,unless a double tax treaty is applicable.
  • Bulgaria has double taxation agreements with 68 countries, including Japan, UAE, Canada,Malaysia, Singapore, and many others.

Ease of Doing Business

Foreign companies may open a branch office entity in Bulgaria to do business in the country. These branches are not considered separate legal entities. Therefore,the parent company will be subject to unlimited liability for losses incurred at said branch.

Branches must have a resident legal representative and must file financial statements with the Bulgarian Trade Register before March 31st each year.

Trained Workforce

Bulgaria boasts a skilled and educated workforce while maintaining one of the lowest labour costs in Europe. The country’s labour code is also favorable for businesses. The country boasts a workforce of 3.4 million people, and most have a higher education.

Singapore as an Offshore Financial Centre

Singapore remains as one of the largest offshore financial centres in the world. The country enjoys this distinction due to its business-friendly environment. The government has made it easy to form a business in the country and adhere to compliance requirements.

Setting Up a Business in Singapore

Registering a business in Singapore is a fairly simple and straightforward process – and it can all be completed online at Bizfile by the Accounting and Corporate Regulatory Authority.

The first step to setting up a business in Singapore is to apply for an EntrePass through the Ministry of Manpower (MOM). A detailed business plan must be created as well as financial projections. A $3,000 security deposit will be required. If approved, an Approval-in-Principle letter will be sent within 2-6 weeks.

All businesses in Singapore must be registered with the Accounting and Corporate Regulatory Authority (ACRA) and have a minimum $1 in paid-up capital for private limited companies.

Nominal fees apply for the business name application and to incorporate the company. Registrations are generally approved within 15 minutes if applying online.

  • Company names must be approved by the ACRA
  • There must be at least one shareholder
  • At least one director must be a resident of Singapore
  • The company must have a Company Secretary, and that person must be a Singapore resident
  • The company must maintain a physical office address in Singapore
  • The company's office address and hours (must be a minimum of three hours per weekday) must be registered.
  • The business registration number issued by ACRA must be included in all documents used for official business communications.

Yearly Corporate Compliance

Companies registered in Singapore must adhere to several requirements in order to remain complaint:

  • An auditor must be appointed within 3 months of incorporation, unless exempted from audit requirements.
  • The First Company Secretary must be appointed within six months of the date of incorporation.
  • Transfer share agreement must be stamped within 14 days of signing the document.
  • The company must establish a Financial Year End (FYE).
  • Companies must register for Goods and Services Tax (GST) if turnover exceeds $1 million.
  • Companies must file an Annual Return (filed with the ACRA) and an Annual Tax Return (filed with the IRAS) each year.
  • Certain business activities will require special licenses.


Companies with a turnover of S$1 million or more must register to pay GST, which is 7%.GST is similar to VAT and sales tax in other countries.

Taxes in Singapore are pretty straightforward:

  • The first S$300,000 in annual profits: Less than 9%
  • Annual profits after $300,000: 17%

Singapore’slow tax rates have helped make the country an attractive place to launch business.

Ease of Doing Business

Foreign entities can establish a representative office in Singapore through one of three government agencies:

  • Legal:Legal Services Regulatory Authority
  • Banking,insurance and finance: Monetary Authority of Singapore
  • All other industries: Enterprise Singapore

Trained Workforce

Although Singapore has a relatively small workforce of just 5.7 million people, workers are educated and trained.

The work culture in Singapore prioritizes productivity, innovation and technology adoption. Singapore has 67% labour force participation, and more than half of workers hold a diploma or degree of some sort.

Both Bulgaria and Singapore are attractive options when establishing a business or expanding operations offshore. The optimal destination for a business will depend on the industry and the company's goals.

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