Bulgarian MPs passed at second reading on June 15 a bill easing ownership restrictions on offshore companies, amending a law that was adopted in December 2013.
Under the amended law, which will go into effect on July 1, corporate entities registered in tax havens will be allowed to hold up to 10 per cent in Bulgarian companies. The restriction will be cumulative, meaning that it would apply to the combined potential holdings of offshore entities in a single company, rather than setting a limit of 10 per cent on each offshore entity.
Bulgaria’s law on offshore companies was passed in the previous National Assembly by the now-departed ruling axis behind the Plamen Oresharski administration and included restrictions on ownership of companies in key areas of Bulgaria’s economy, from banking to pension firms and media ownership. A frequent criticism against the law, however, is that it is virtually not being enforced at all.
The bill defines any body, whether local or foreign, controlled by a company registered in a low-tax jurisdiction as being included in the restrictions. It bans such companies from taking part in public tenders, privatisations, public-private partnerships, in competitions to acquire state or municipal property.
The amendments were prompted by recommendations made by the European Commission, which said that the bans were overly restrictive and breached the free movement of capital principle of the EU, reports in Bulgarian media said.
(Bulgarian Parliament. Photo: Clive Leviev-Sawyer)