In a significant move to boost its business and innovation ecosystem, Bulgaria’s National Assembly recently approved substantial amendments to its Commercial Law. The highlight of these amendments is the introduction of a novel legal entity, the Variable Capital Company (VCC). Aimed at supporting and nurturing innovative startups, this development opens up exciting opportunities for businesses in the country.

What is a Variable Capital Company (VCC)?

The VCC is a new type of legal entity in Bulgaria, tailored specifically to cater to innovative startups. It is structured to focus primarily on the development of groundbreaking products or services. What sets the VCC apart is its adaptability; if a VCC achieves success, it can seamlessly transform into a publicly traded company by listing on regulated markets or being sold to other investors.

Catalyst for Change: Bulgarian Startup Association (BESCO)

These progressive amendments were initiated by the Bulgarian Startup Association (BESCO). Their vision was clear: to create a business environment conducive to innovation and growth for startups in Bulgaria. By introducing the VCC, Bulgaria has taken a significant step towards fostering a thriving startup ecosystem.

Unlocking Innovation Funding

In parallel, the Ministry of Innovation and Growth (MIG) has launched a groundbreaking initiative called “Innovation in Enterprises.” This program, with a substantial budget of BGN 293.4 million, is part of the Competitiveness and Innovation in Enterprises Programme (CIP). Here’s what you need to know:

1.Eligibility for Funding

Micro, small, and medium-sized companies, as well as businesses with up to 499 employees across various economic sectors, are eligible to benefit from this program. Whether you’re a tech startup or a company in the manufacturing sector, there’s room for innovation.

2. Thematic Focus Areas

To secure funding under this program, your project must align with one of the following five thematic areas outlined in the Smart Specialisation Innovation Strategy:

• Informatics and ICT: Develop cutting-edge software solutions or innovative digital services.
• Mechatronics and Microelectronics: Drive advancements in robotics, automation, or semiconductor technology.
• Healthy Living Industries, Bioeconomy, and Biotechnologies: Innovation in healthcare, biotechnology, or the sustainable use of biological resources.
• New Technologies in Creative and Recreative Industries: Explore new avenues in art, design, or entertainment through technology.
• Clean Technologies, Circular and Low Carbon Economy: Contribute to sustainability by developing clean energy solutions or circular economy practices.

3.Public Consultation Period

The “Innovation in Enterprises” program was open for public consultation until August 8, 2023. This provides a valuable opportunity for businesses and stakeholders to contribute their insights and feedback to shape the program’s final form.

Why It Matters for Business Development

These developments in Bulgaria offer a significant boost to business development and innovation:

• Startup Growth: The introduction of VCCs provides startups with a flexible and growth-oriented legal structure, making it easier for them to attract investors and scale their operations.
• Innovation Catalyst: The “Innovation in Enterprises” program injects a substantial budget into the economy, stimulating innovation across various sectors and supporting businesses in their R&D efforts.
• Competitive Advantage: Businesses that align with the thematic areas outlined in the program can gain a competitive edge by accessing funding for innovative projects.

In conclusion, Bulgaria’s recent legal changes and innovation funding initiatives open up exciting opportunities for businesses and startups. The introduction of Variable Capital Companies (VCCs) and the “Innovation in Enterprises” program provide a platform for growth and innovation.

As you navigate this evolving landscape, remember that having the right support and expertise can make a world of difference. Whether you’re a startup or an established business, consider seeking guidance to make the most of these opportunities.

At TGS Bulgaria, we invite you to tap into this wave alongside us. Our in-depth knowledge of the local business landscape uniquely positions us to provide you with tailored guidance and support, fueling your growth and ensuring your success. The future of Bulgarian business is brighter than ever, and we’re here to ensure you’re a part of it. Get in touch with us now to embark on this exciting journey.