Why is the Bulgarian Trade Representative Office (TRO) so popular?
Many foreigners have been registering Trade Representative Offices in Bulgaria during the years. The main purpose for the registration, we have to be fair here, is for the foreigner to obtain Bulgarian long term residency permit.
And indeed, the Bulgarian legislation foresees that the representatives of the TRO may obtain residency permit. It is important to take into account that the current wording of the law (amended in 2019) is way more restrictive than the old one. This means that there are additional conditions that need to be met in order for the residency permit to be granted. This was done by the Parliament in 2019, because of the wide misuse of this loophole by many foreigners who were registering TRO’s with the only purpose to obtain residency rights in Bulgaria.
Foreigners who hold a visa under Art. 15, para. 1 and are representatives of a foreign trade company with registered, after verification and evaluation of submitted documents regarding the economic activity and tax integrity of the foreign company for a period of two years before the registration of the representative office, as well as documents regarding its planned activities from the Bulgarian trade Chamber of Industry and Trade Representation in the Republic of Bulgaria (aka Trade Representative office – TRO); no more than three representatives for each foreign company may obtain a long-term residence permit; The Bulgarian Chamber of Commerce and Industry shall promptly notify the Migration Directorate in the event of a change in the circumstances of the registration of the representative office;Art. 24, para 1, p.6 from the Bulgarian law for the foreigners
From the new redaction of the law, we see that there are additional requirements and constraints introduced, namely:
- Evaluation of the economic activity and tax integrity of the foreign company (the company that is registering the TRO) for a period of two years prior to the registration;
- Evaluation of the planned activities of the TRO in Bulgaria;
- A maximum of three representatives for each foreign company (or TRO) may obtain long-term residence permit;
- The Bulgarian Chamber of Commerce is obliged to notify the immigration authorities for any change in the status of the TRO.
Economic and tax integrity for the last 2 years
What the law is basically saying is that the authorities will need to verify the tax compliance of the foreign company first, as well as its economic activities. This is very broad requirement and one that is very difficult to enforce. It is hard to imagine, for example. how the Bulgarian authorities will verify the tax and economic compliance of an Indian company for the last 2 years. Still, the problem becomes very serious, because if the verification doesn’t go through, the foreign company will be considered to be “non-compliant”. And here is where our assistance is absolutely essential.
The planned future activities of the TRO
This is another subjective requirement that needs professional approach. The government is basically willing to verify that the economic activities of the TRO will benefit the economic relations between Bulgaria and the country of the company registering the TRO. The expectations of the authorities better be met, as the subjectivity of this requirement can be the “end of the game” otherwise.
Maximum 3 residency permits per TRO
Prior to the amendments of 2019, many foreigners tried to misuse the system by registering TRO and then basically selling “seats” in the TRO to other foreigners. This is obviously not possible anymore. So, no more than 3 representative per TRO now.
The Chamber of Commerce – obliged to control the status of the TRO
From 2019 onward, the Bulgarian Chamber of Commerce will be notifying the immigration authorities for any change in the circumstances of the registered Trade Representative Offices. This eliminates the possibility to register TRO and then, for example, dissolve the company that has registered it. Or, what is more important, not to carry out any activities after the registration. Our lawyers can explain you all options and advise you on how to keep your TRO 100% legally compliant.
The registration of the TRO
The registration of the Trade Representative Office is not as easy as it used to be 2 or 3 years ago. There are many regulative measures, such as anti-money laundering and due diligence procedures. The successful outcome however can be guaranteed for 100% when our consultants are involved to take care of the legal compliance issues.
What is basically required from the applicant is:
- The founding documents of the foreign company – i.e. act of incorporation, minutes of first meetings, certificate of good standing, etc.;
- Copies of the identity documents of all representatives;
- Certificates for lack of criminal convictions for all of the representatives;
- Many other forms and applications, which will be provided by us for the applicants to sign and legalize (where applicable).
After the registration – the immigration formalities
Once the TRO is dully registered, the applicant has to apply for visa D (visa under Art. 15, para. 1). After the visa is granted, the applicant needs to travel to Bulgaria and apply for Bulgarian residency permit. With this, the process is completed.
And from the year after the registration
The residency permit will be valid for a maximum of 12 months. After that, the applicant needs to renew his residency permit, which is more or less a formality if everything has been done professionally from the start.