How to Open a Bank Account in Bulgaria as a Foreign Business3 August 2020
Corporate Clients, Banking & Finance, Private companies
In this article, we provide an overview of the criterion that overseas incorporated businesses must generally fulfil in order to open a bank account in Bulgaria. We have restricted our analysis to organisations that are structured as companies or corporations in their home jurisdiction. Although Bulgarian law tends to recognise the legal forms of other jurisdictions, the general diversity of non-corporate structures across national borders means that they warrant a separate discussion.
Overview of Bulgarian banks and their attitude to foreign businesses
As of October 2022, there are eighteen standalone banking corporations or subsidiaries and seven branches of overseas banks, licensed in Bulgaria. For an up-to-date list, consult the Bulgarian National Bank’s list of credit institutions.
All twenty-five of these licensed banks (“Bulgarian banks”) in theory offer current account services to businesses, including businesses established overseas. However, the types of businesses that they are interested in vary.
Regulation 3 of the Bulgarian National Bank, which came into force on 16 July 2009, establishes the requisite conditions for opening bank accounts. The Regulation appears to have been drafted with Bulgarian corporate law and administrative practices in mind However, it can normally be painlessly applied by analogy when opening accounts for international businesses or organisations.
Article 5 of the aforementioned Regulation allows individual banks to request additional documents to those stipulated by the Regulation. Therefore, each licensed bank has its own policy regarding the substance and form of the documents that an applicant must supply.
What all banks require
All banks require organisations to disclose a certain set of information when applying to open an account. First and foremost applicant companies need to provide a document that proves the company is properly registered and active at the time of the application. This document is usually in the form of a Certificate of Good Standing issued and certified by the relevant Companies Registrar but there may be other acceptable alternatives (for instance, a recent Certificate of Incorporation or a similar document).
Beyond this , corporate applicants must show who the officers authorised to represent and bind the company are and how they are authorised to act according to its Articles of Association (or other “constitutional” documents, such as a charter or, bye-laws). Again, this information maybe contained in one of several documents and there is no strict requirement as to its layout. Thirdly, companies must declare the identity of the Ultimate Beneficial Owners who control the business (typically, control is defined as holding shares worth more than 10% of the company’s capital). Each bank requires an officer of the company or an authorised representative to sign a Declaration identifying the Ultimate Beneficial Owners.
Finally, banks require the usual know-your-client/customer-due-diligence information about the person(s) authorised to run the proposed account.
What some banks may require
Some banks may require that the applicant company is registered for tax purposes in its country of origin. Other institutions may ask for certified incorporation documents and a list of shareholders. Importantly, if an applicant company wishes to instruct a local representative to open and/or manage the account, they should present the bank with a Power of Attorney (PoA). Each bank has its own requirements regarding the content of the PoA, and it is usually necessary to tailor the PoA according to the demands of the bank in question.
How to approach the bank account application
The transnational element means that banks tend to adopt complex methods of identification and verification for international customers, in compliance with evolving national and European laws. Accordingly, banks have stringent requirements on the authentication and legalisation of each document supplied as art of the bank account application. Applicants are advised to choose one institution and tailor their documents accordingly.
In general, the physical presence of an international business’ directors is not required at the time of application or account opening as long as other identification requirements are met.
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