What makes Bulgaria a top destination for blockchain businesses
06 Jan 2022
Choosing the right jurisdiction to set up shop is an important step for any starting business. This is especially true for businesses that are operating in the blockchain industry, which, itself, is still in its formative years and is often looked down upon by regulators across the world.
When choosing a jurisdiction to set up shop, a blockchain business needs to take into account a number of factors such as: whether the local authorities are friendly or at least open-minded towards blockchain technology; existing regulatory requirements for registering a business; is there an established regulatory framework for blockchain-related activities; cost-effectiveness; local community and talent.
Today we’re examining a jurisdiction that checks all the boxes. Here’s why Bulgaria is one of the best jurisdictions for opening a blockchain business.
Bulgaria is a member of the European Union, which means that the country benefits from any EU-wide regulatory initiatives, such as the upcoming Markets in Crypto Assets regulation, which aims to harmonize national approaches towards blockchain and crypto across the bloc and, among other things, create an equivalent of financial passports for crypto-focused businesses.
Bulgaria’s EU membership also opens opportunities for local businesses to take part in EU-wide blockchain infrastructure projects and other initiatives. One such initiative is the European Blockchain Services initiative (EBSI), which aims to build a peer-to-peer blockchain network to power a range of digital public services across Europe.
Straightforward registration process
While Bulgaria doesn’t currently have a dedicated regulatory framework for the blockchain industry, existing laws and regulations make starting a blockchain business in the country a relatively straightforward affair. This is because most blockchain- and crypto-focused business models can be covered by acquiring just two licenses – a service license for exchange between virtual and recognized currencies and a license for wallet providers that offer custodial services.
On top of that, opening a limited company in Bulgaria is really easy and requires virtually no initial capital.
Speaking of finances, there are a couple more factors that contribute to Bulgaria being the most economical European destination for opening a blockchain or crypto business. The first is that due to low license and legal fees, it costs significantly less to open a blockchain or crypt business in Bulgaria than in other EU countries.
The second factor is Bulgaria’s flat corporate tax rate of 10%, which is the lowest in the EU.
Preferred tech destination
Being one of the countries with the fastest Internet connection and lowest corporate income tax in the world, Bulgaria has been able to attract a number of international tech corporations, with the likes of HP, Experian, VMware and others have opened offices in the country’s capital, Sofia. This has helped establish a thriving IT sector in the country and created demand for qualified professionals.
All that has led to a rapid increase of the local talent pool, with more and more Bulgarians choosing coding and other technology disciplines as their career path every year. Blockchain is on its way to becoming a significant part of that trend, as the technology has become the focus of an increasing number of educational programmes. One such example is LimeAcademy – the latest initiative of our sister company LimeChain.
Finding a trusted partner
Finally, when choosing a destination to open your blockchain business, it is important to invest time in finding a capable local partner that can help you navigate the registration process and avoid potential legal and technical pitfalls. And if you’re looking to open an office in Bulgaria, LimeLegal is that partner for you!
At LimeLegal, we have a comprehensive service package for blockchain businesses seeking to register in the country. This includes full legal support during the registration process, as well as post-registration support. In other words, we can provide everything a company would need to hit the ground running in Bulgaria!
Do you want to learn more about the services we offer? Awesome, let’s get in touch!
Generally speaking, the blockchain and crypto space has never had a good relationship with regulators. From the early years, when the fledgling industry was largely ignored, to more recent times, governments and regulators around the world have time and again demonstrated their inability to handle the sector. Some jurisdictions have reacted to the sector with open hostility, others have demonstrated a lack of understanding of the technology and willingness to adapt their legal frameworks to adequately meet the new requirements of the sector.
Security tokens are a crypto asset type that represents an ownership stake in an asset or a business. A security token essentially serves a similar role to traditional securities such as shares so it warrants the same regulatory scrutiny as those types of financial instruments.
Regulation of the blockchain and crypto space has been notoriously hard to work out, especially after cryptocurrencies like Bitcoin and Ether rose to prominence and kicked off a larger crypto boom in the latter part of the previous decade.