Database

In Bulgaria, foreign companies or individuals that reside outside of the EU that wish to register for a local domain name need to have a commercial representative office or an authorized agent. Foreign companies must also present a certificate issued by the Bulgarian Chamber of Commerce and Industry.

The European de minimis threshold for import duties is harmonized. Goods with a value of up to 128 SDR / 150 EUR / 186 USD are exempted from customs duties. The VAT de minimis threshold is not harmonized within the EU and can vary between 10 and 22 EUR, i.e. Member States can decide on a value within this range to grant an exemption on VAT for imported goods.

According to Bulgaria's de minimis rule, goods with a value of up to 13 SDR / 15 EUR / 19 USD are exempted from VAT.

In Bulgaria, an applicant for a gaming license must assure that all data related to operations in Bulgaria is stored on a server located in the territory of Bulgaria. Moreover, the applicant has to assure that the communication equipment and the central computer system of the organizer are located within the EEA or in Switzerland.

There are labour market regulations in Bulgaria for intra-corporate transferees (ICT), contractual service suppliers (CSS) as well as independent service suppliers (ISS). Work permits are issued for jobs that require knowledge or skills that are not available in the local labour market at the moment of application. Employers must prove they searched in the local market for at least 15 days.

Although no formal quotas are applied, the total number of foreign employees of the local employer cannot exceed 10% of the average number of staff on the payroll for the preceding 12 months.

The telecommunications market in Bulgaria is formally liberalized. Nonetheless, it is reported that several of the competitive safeguards that are foreseen in the EU regulatory framework have not been implemented or are not used in practice. Retail tariffs are not rebalanced, with Vivacom’s basic line tariffs at €5.10 being one of the lowest in Europe.

Local loop unbundling, wholesale broadband access and carrier selection/pre-selection are almost unused in practice. Furthermore, according to an analysis of the European Bank for Reconstruction and Development in 2012, it is not clear when interconnection charges will reach full cost orientation as recommended by the European Commission.

Internet piracy, predominantly via peer-to-peer (P2P) services including bitTorrent file sharing, is reported as extremely high. The software industry reports that enterprise end-user software piracy, particularly among small and medium-sized enterprises, is a prevalent practice in Bulgaria that poses a major threat to the local software industry. Local systems builders commonly offer assembled PCs with pre-installed copies of unlicensed business software (a practice known as Hard Disk Loading).

In the European Union, there is no general principle for the use of copyright protected material comparable to the fair use/fair dealing principle in the US. Directive 2001/29/EC defines an optional, but exhaustive set of limitations from the author´s exclusive rights under the control of the “three-step test”. This is a clause in the Berne Convention that establishes three cumulative conditions to the limitations and exceptions of a copyright holder’s rights. The Directive has been transposed by Member States with significant freedom.

In Bulgaria, the free use of works is allowed by fifteen conditions such as citations, temporary reproduction, current information, mass media use of already published work, etc. The reproduction of works is allowed without the consent of the copyright holder upon payment. The fair use of computer programs is also provided.

In 2013, a unified European system of patent's granting and enforcement was approved. The Unitary Patent (UP) provides a single pan-European patent as an additional option for companies or investors seeking patent protection in Europe. The system would ensure uniform protection in 26 Member States (Croatia and Spain have opted out over language issues, while Italy became a participant in September 2015) and also includes a litigation system within a Unified Patent Court (Bulgaria, Croatia, Italy, Poland and Spain have opted out).

Although Bulgarian patent law has been harmonized with EU law for patents and patent protection, there are reports of conflicts of interest in patent procedures as well as delays in decision-making and informing patent holders. It is reported that these issues, coupled with a lack of accountability of the Bulgarian Patent Office, have weakened patent protection in the country.

Screening mechanisms for foreign investment are not in place in Bulgaria. However, according to Art. 12 of the 2004 Bulgarian Investment Promotion Act, investments must lead to a net increase in the number of employees, compared with the average number of employees over the previous 12 months and the employment created shall be maintained during a minimum period of five years in the case of large enterprise and a minimum period of three years in the case of small and medium-sized enterprises.

Public procurement procedures used by state agencies and state controlled companies for purchases are prescribed by the Law on Public Procurement. That law has made Bulgarian legislation consistent with the two major European public procurement directives. However, the implementation is inconsistent and some companies report problems with the transparency of the public procurement process.

There have been complaints that the public procurement process in Bulgaria is not always transparent and that it is frequently discriminatory and unfair. Furthermore, tenders are narrowly defined and they appear tailored to a specific company. Companies have also complained that they face difficulties having their certification documents accepted to qualify as bidders on public procurement projects. The latter include extremely tight deadlines and requests for documentation that are not necessary in any other country and they are very difficult to obtain on short notice.

The European Regulation No. 1042/2013 amending the Council Implementing Regulation No. 282/2011, declares that from January 2015, all supplies of telecommunications, broadcasting and electronic services will be taxable at the place where the customer belongs. These include, inter alia:
- images or text, such as photos, screensavers, e-books and other digitised documents e.g. PDF files;
- music, films and games, including games of chance and gambling games, and of programmes on demand;
- online magazines website supply or web hosting services distance maintenance of programmes and equipment;
- supplies of software and software updates advertising space on a website.

Both EU and non-EU suppliers have to register for VAT purposes and comply with the relevant obligations of the Member State where the customer is established, has his/her permanent address or usually resides. This may be burdensome as there are 81 VAT rates across the 28 EU countries and the rates may vary between 3% (Luxembourg) to 27% (Hungary) across member states. Furthermore, member states impose varying thresholds at which companies must begin paying VAT, ranging from EUR 0 to EUR 60,000.

As an alternative to obtaining multiple VAT registrations in each Member State where a supplier has a customer, affected suppliers may be able to opt to account for VAT across the EU via a a web-portal in the Member State in which they are identified. Hence, the system, known as the Mini One-Stop Shop (MOSS) scheme, allows taxable persons to avoid registering in each Member State of consumption.

The European de minimis threshold for import duties is harmonized. Goods with a value of up to 128 SDR / 150 EUR / 186 USD are exempted from customs duties. The VAT de minimis threshold is not harmonized within the EU and can vary between 10 and 22 EUR, i.e. Member States can decide on a value within this range to grant an exemption on VAT for imported goods.

According to Belgian de minimis rule, goods with a value of up to 19 SDR / 22 EUR / 27 USD are exempted from VAT.

The EU Directive on Audiovisual Media Services (AVMS) covers traditional broadcasting services as well as audiovisual media services provided on-demand, including via the Internet. Article 13 of the Directive imposes on Member States the obligation to ensure that on-demand service providers promote European works, despite there is no explicit content quota. The Directive has been implemented by Member States in different ways, ranging from very extensive and detailed measures to a mere reference to the general obligation to promote European works.

In Belgium, the Directive has been implemented via three obligations:
- The Belgian CSA Recommendation on the promotion of European works - applicable in the French Community of Belgium – does not impose specific shares of European works in the catalogue, but the recommendations consider aspects such as the presence of a substantial offer of European works, the composition of thematic catalogues etc.

- The promotion of European works in the catalogues should be ensured by using all promotion techniques possible, e.g. advertising inserts and other publicity measures in the electronic programme guide or on the website, a specific section dedicated to European works, etc.

- Video-on-demand service providers have to contribute financially to the production and rights acquisition of European works. Financial contributions can be fulfilled by investing in the production or rights acquisition of European works or by transferring the amount to a Film Fund that is then redistributing the amount as production aid.