Recently, opening a bank accounts with Bulgarian banks has become a problem for many foreign citizens. What are the reasons and what is the best solution?
The problem is that the policy of banks regarding opening accounts for Bulgarian companies with foreign managers and founders, as well as for individuals – foreigners, has changed. Opening an account has become a real problem for those who are not residents of Bulgaria, do not have a residence permit and are not even in the process of obtaining it. Moreover, cases of closing previously opened accounts have become more frequent. However, bank employees do not give any explanation. That is why it is vital that foreign business owners in Bulgaria hire good local lawyers and consulting firms to assist them in all necessary bureaucratic procedures with banks.
After the adoption of the Law Book (the provision on the application of the norms) to the Law on Measures against Money Laundering, Bulgarian banks received strict instructions on the utmost attention to foreign customers. Financial institutions are among the first to adopt internal regulations to enforce the Law, according to which they are required to conduct complex multi-stage checks of many transactions that may be suspicious. And above all, these are international transactions.
This led to the fact that banks (at least most of them) decided to play it safe and not contact suspicious foreign customers at all, seeing in each a potential source of problems. Although the law does not contain any prohibition on this account, foreigners are often denied opening accounts or closing accounts if funds are received that have an unclear origin.
Now it has become very difficult to open a bank account in Bulgaria for companies with the participation of citizens of the Baltic states, Angola, as well as companies that receive income from Russia and China. Any transaction is considered doubtful if it involves “high-risk countries” that are not part of the EU. All legal entities and individuals using virtual currencies were also suspected.
Those few banks that still continue to open accounts for foreign citizens, usually refuse to provide online banking services outside of Bulgaria, and in some cases – in the country. It became practically impossible to open proxy accounts for companies found by foreign citizens.
For the time being, the Bulgarian company has the opportunity to open an account not only in Bulgaria, but also in any other EU country that allows this. However, it should be noted that the EU Anti-Money Laundering Directive has led to the fact that now there is a rapid integration of all data on accounts in the EU countries into a single centralized system, to which Bulgaria also joins.
Managers and founders of Bulgarian companies that have not yet issued a residence permit in the country should urgently begin the registration process, if possible. Otherwise, there is a great risk that the company’s work will be blocked, since the possibility of opening accounts for companies with the participation of non-residents may be completely limited by the end of May 2019.
Why has the situation with banks become so complicated in recent months? It can be assumed that the problems are caused by the planned entry of Bulgaria into Schengen. This step involves the exact implementation of all European Union Directives, including those that has not been given due attention before. There is a possibility that after entering Schengen the situation will normalize and the situation will become calmer.
At the same time it is not known how this process may be delayed. In addition, it cannot be assumed whether the policy of banks will change in the future, since the control of financial structures is becoming stricter, and banks try to avoid risks whenever possible. For this reason, it is better not to delay obtaining a residence permit!
The obtaining of the residence permit worth it because considering that the status of legal stays in the country not only facilitates interaction with banks, but also gives other advantages. In addition, you can apply for a tax residence in Bulgaria, get a tax resident certificate and pay taxes only here. The company VD&A will help in the preparation of all necessary documents and will provide the necessary legal support in processing any status of staying in Bulgaria if there are legal grounds for obtaining it.
This is also the best way to get out of the situation. Hiring a local company familiar in the intricacies of banking in Bulgaria. A law and consulting firm such as VD&A. The company’s experts and lawyers will prepare all the necessary documents and start a bank accounts opening process for your business.
Euroformat.eu is part of the VD&A group. The main activity of the organization is preparation of all necessary documents for the formation of a company of foreign citizens in Bulgaria. As well as opening bank accounts for their business.