Starting a company in Bulgaria?

When registering a company in Bulgaria, the most common choice has traditionally been the Limited Liability Company (LLC / OOD). However, with recent amendments to the Bulgarian Commercial Act, a new form was introduced – the Variable Capital Company (VCC / DPK).

This raises the important question: Which is better – VCC or LLC?

In this article, we will review the advantages and disadvantages of both forms, outline the limitations of VCC, and give practical examples to help you decide.

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What is an LLC (OOD)?

The LLC (OOD in Bulgarian) is the most popular company type for small and medium-sized businesses in Bulgaria.

• It has a fixed capital, registered in the Commercial Register.
• The minimum share capital is only BGN 2.
• Liability of the shareholders is limited to their contributions.
• Changes in capital or ownership require notarized agreements and official registration.

Advantages of LLC: stability, recognition by banks and investors, no limits on capital or employees.
Disadvantages: more formal and bureaucratic when changes are needed.

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What is a VCC (DPK)?

The Variable Capital Company (VCC) is a new, more flexible form designed to support start-ups and growing businesses.

• It has a variable capital, which is not registered with the Commercial Register.
• The minimum capital is also BGN 2.
• Shareholders can join and exit more easily, without notarized deeds.
• Suitable for start-ups, family businesses, and online ventures.

Advantages of VCC: easy restructuring, fewer formalities, faster entry and exit of partners.
Disadvantages: statutory limitations, less familiar to banks and investors.

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Limitations of VCC

While flexible, the VCC comes with restrictions defined by law:

• Maximum capital/company’s assets: up to BGN 4,000,000.
• Maximum employees: up to 50.
• Limited investor trust: VCC is new and less established compared to LLCs or JSCs.

This means the VCC is designed mainly for small and medium-sized businesses, not for large-scale enterprises.

Comparison: VCC vs. LLC

Criterion	LLC (OOD)	VCC (DPK)
Capital	Fixed, registered	Variable, not registered
Minimum capital	BGN 2	BGN 2
Maximum capital/Company assets	Unlimited	BGN 4,000,000
Employees	No limit	Up to 49
Share transfer	Requires notarization	No notarization required
Best for	Traditional and larger businesses	Start-ups, small and dynamic businesses

Example Scenarios

• Online store with several partners – VCC is convenient, as it allows for easy inclusion of new shareholders.
• Tech start-up – VCC offers the flexibility needed during rapid growth phases.
• Family-owned company with a small team – VCC simplifies management and shareholder changes.
• Manufacturing company with many employees and high investments – LLC or JSC is a safer choice due to the absence of statutory limits.

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Conclusion

When deciding between VCC and LLC, the choice depends on your business goals:

• LLC is more suitable for traditional, stable, and long-term ventures, especially when dealing with banks or large investors.
• VCC is a modern and flexible option for start-ups and small businesses that need agility, as long as they stay within the legal limits.

Tip: Before company registration in Bulgaria, consult with a qualified lawyer to select the best structure for your specific needs.

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Frequently Asked Questions (FAQ)

1. Which is better – VCC or LLC?

For small, dynamic businesses or start-ups, the VCC is more flexible. For stability and stronger recognition by banks, the LLC is better.

2. What is the minimum capital for VCC and LLC?

Both require a minimum capital of just BGN 2.

3. Are there limitations for VCC?

Yes. A VCC can have up to BGN 3,000,000 capital and a maximum of 50 employees.

4. Can new shareholders easily join a VCC?

Yes. Unlike LLCs, a VCC does not require notarization for the transfer of shares.

5. Which form do banks and investors prefer?

Banks and major investors generally prefer the more established LLC and JSC structures.

6. Is a VCC suitable for an online store or a start-up?

Yes, this type of company was specifically designed to support such businesses.

7. Can I start with a VCC and later switch to LLC?

Yes. The law allows a VCC to transform into an LLC or JSC if it exceeds the statutory limits.

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