Bulgaria holding company bank account: dividends and bank checks

Why groups set up a holding in Sofia

A Bulgaria holding company bank account is used to receive subsidiaries' dividends, fund the group and pay distributions to shareholders. Banks open it only when the company has genuine management in Bulgaria and a transparent ownership chain. Entrepreneurs from South-East Europe and IT groups pool regional shareholdings in a Bulgarian company, often an EOOD or an AD, drawn by the 10% corporate tax and EU membership.

For a holding company in Bulgaria, entrepreneurs from South-East Europe and IT groups pool their regional shareholdings in a Bulgarian company, often an EOOD or an AD. The 10% corporate tax and EU membership explain the choice, provided management is genuine.

Dividends received from European subsidiaries

Dividends a Bulgarian company receives from another EU or EEA resident company are in principle excluded from its taxable profit under the Parent-Subsidiary Directive. The bank asks for the subsidiaries’ distribution resolutions to match each transfer.

Distributions to an EU parent company

Dividends paid by the Bulgarian holding to a European parent holding at least 10% of the capital for two years are exempt from withholding tax. The banker checks the parent’s tax residence certificate before the payment.

Individual shareholders: the 5% withholding

When the holding distributes to individuals, a 5% withholding applies, with possible relief or credit under a tax treaty. The plan to raise it to 10% considered for the 2026 budget was dropped.

Substance: board, office and decisions taken in Bulgaria

To be recognised as resident and to obtain its account, the holding must show its decisions are made in Bulgaria: a locally reachable manager, minutes signed in Sofia, a real address and a Bulgarian accountant. A mailbox rarely satisfies the compliance teams of a bank in Bulgaria.

Intragroup loans and treasury flows

Advances to subsidiaries, repayments and service recharges run through the holding’s account. The bank expects written loan agreements, interest rates consistent with transfer pricing rules and clear documentation of any circular flows within the group.

Beneficial ownership register and group chart

The beneficial owners of a Bulgarian holding are filed with the Commercial Register. The bank file includes a full chart up to the individuals, with percentages and countries of residence, updated at every change in ownership.

DAC6 filings with the National Revenue Agency and bank CRS reporting

Cross-border arrangements showing certain hallmarks must be reported under DAC6 to the National Revenue Agency. In parallel, the Bulgarian bank reports accounts of passive entities and their controlling persons to the agency under CRS.

What a local bank asks of a holding company

At Fibank, a holding provides its articles, the Commercial Register extract, the main subsidiaries’ accounts and a note explaining group strategy. Non-resident directors are received in a branch for the initial identification.

French-resident shareholders and Bulgarian holding dividends

A shareholder resident in France declares dividends from the Bulgarian holding, with the tax credit provided by the France-Bulgaria treaty, and files form 3916 for any Bulgarian account held or operated under a mandate.

Opening a Bulgaria holding company bank account: the steps

Before approaching any Bulgarian bank, the company must exist: registration with the Commercial Register, up-to-date articles, an appointed manager and a real address in Sofia or another city. The bank does not finance a planned structure; it opens the account of an entity that is already incorporated. So complete the incorporation before you book an appointment.

Next, prepare a clear presentation of the group: what the subsidiaries do, the countries where they are established, expected dividend and loan flows, and who the shareholders are. This note of two or three pages helps the adviser build the internal file. The more precise it is and the better it matches the articles, the less follow-up questions delay the opening. This step avoids corrections along the way.

Finally, organise the directors’ attendance. The local manager meets the bank, and non-resident directors are received in a branch for the initial identification. Depending on the institution, extra signatures or powers of attorney are validated at that meeting. Ask in writing for the list of documents before travelling, because it differs from one bank to another. Also plan the travel time of the directors concerned.

Documents to gather for the holding account

The first set of documents concerns the company: articles, Commercial Register extract, proof of the registered office address and evidence of the manager’s appointment. Add the company’s tax identifiers. These papers must be recent and consistent with each other, because a mismatch in name or address is enough to delay validation by the compliance department. Have the documents translated if the adviser asks.

The second set describes ownership: a full chart up to the individuals with percentages and countries of residence, the beneficial owner declaration and identity documents for each significant shareholder. If a foreign company sits in the chain, the bank asks for its articles and proof of tax residence. Update the chart at every share movement. Each paper should be legible, dated and signed where necessary.

The third set justifies the activity: accounts of the main subsidiaries, distribution resolutions, intragroup loan agreements and a note on strategy. For the funds that will feed the account, prepare evidence of their origin, such as bank statements or disposal contracts. A complete file at the first meeting remains the best way to limit back-and-forth. File them in a single folder that is easy to resend if the bank asks.

Common mistakes when applying for a holding company account

The most common mistake is presenting a company without substance: no reachable manager, no office and no decision genuinely taken in the country. A Bulgarian bank that sees only an administrative shell will hesitate to open the account, since it must be able to explain to its supervisor why the structure is in Bulgaria rather than elsewhere. It is better to fix these points before the meeting than after a first refusal.

The second mistake is an incomplete or outdated group chart. An ownership chain that stops at a foreign company, with no mention of the individuals behind it, blocks the beneficial-owner analysis. Likewise, vaguely described flows, without contracts or distribution resolutions, force the bank to ask questions that lengthen the process. A refusal often leaves a trace in the bank’s internal file.

The third mistake concerns tax coordination. Shareholders sometimes forget that dividends received and accounts held must be declared in their country of residence. Before opening, have a tax adviser validate the treatment of the flows, the residence certificates to provide and any reporting duties that apply to cross-border arrangements. Go through each point with your local accountant before sending. Keep the supporting papers ready.

Questions to ask the bank before choosing the holding account

First ask which documents the bank requires from a company whose shareholders are non-resident, and whether each director must visit a branch. Also ask about processing times, remembering that they depend on the file and on the compliance department. Do not hesitate to follow up politely if the adviser is slow to reply.

Then ask the adviser how the account works day to day: maintenance fees, incoming and outgoing SEPA transfers, payments to subsidiaries, online banking access for several signatories and any limits. Check how the bank handles incoming dividends and intragroup loans, and which supporting documents it will require for each significant transaction. Compare at least two banks before choosing the one that answers most precisely.

Finally, check that the institution is licensed and supervised, that the company’s deposits fall under the applicable guarantee, and which closure rules apply after inactivity. Keep a copy of every document supplied. The bank may ask for periodic updates, in particular after a change in ownership or manager. Note the answers so you can compare them with the written terms of the contract.