What is a Foundation?
The Foundation is a non-profit legal entity and with independent property formed by donations.
In Bulgaria, the law allows the founders of a Foundation to be foreigners.
The Law on Non-profit Legal Entities in Bulgaria regulates everything concerning the establishment, operation and termination of a foundation. For this purpose, a procedure is passed for foreigners, after which they receive permission to establish a foundation.
What are the biggest benefits of the Foundation if you are a foreigner in Bulgaria?
- Regardless of whether you are a Bulgarian or a foreigner, if you are a founder of a foundation, your name will not appear in any public register.
- Once you donate any assets to a foundation, you retain certain rights over them. Like the right to use donated property for the rest of your life.
- The Foundation has independent property. With it, the foundation is solely responsible for its own obligations. This means that it is impossible to be responsible for the obligations of the founders.
- Asset protection. If you have transferred / donated any property to the foundation, the Laws of the Republic of Bulgaria do not allow physical or legal entity claims to the property in question to impose a lien on it.
Establishing a Foundation – what are the steps?
Choosing a name for the Foundation
Your foundation name must be unique. You cannot have a name that is already used by another legal entity in Bulgaria. Your name cannot be misleading and should not inspire hatred or contradict the moral norms in the country.
Registration of a Foundation.
- The existence of the foundation starts with its registration in the Public Register. These are the Commercial Register and the Register of Non-profit Legal Entities. Then you can get a Certificate of current status. Such a certificate is used as proof of the existence and activity of the foundation.
- The number of founders, according to Bulgarian law, must not be less than three (3).
- Immediately after the establishment of the foundation, you can donate to it whatever assets you want. This can be money, belongings, real estate.
- Only founders can donate assets to the foundation.
- Bulgarian law allows founders to transfer ownership of their assets to the foundation. The only requirement is the founders have reached the age of majority and thus not harm their creditors. Once the property is transferred (donated) to the Foundation, the latter becomes its sole owner.
Memorandum of Association of the Foundation.
This is a written document that describes who enters the management of the foundation. What goals will there be. What assets were donated to the foundation. The memorandum of association also determines the ability of the foundation to carry out any economic activity.
The assets of the Foundation in Bulgaria – more protected than Fort Knox!
Bulgarian law is clear: the foundation’s assets are inviolable for any claims. Once donated by a founder of the foundation, assets such as real estate, money, belongings are not subject to claim, challenge, cancellation, etc. At the same time, the founder, who has made a corresponding donation, can still use the donated assets. The founder can exercise this right for the rest of his life. Without worrying that the assets donated by him could be the subject of claims by a physical or legal entity.