BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
EUR2 million, will probably make those types of company not so popular, as above that thresh - old they will need to transform themselves into standard commercial companies (eg, LLC). 2024 saw the registration of the first couple of com - panies with variable capital, but interest in them remains rather low, despite the initial expecta - tions, especially in the IT and software develop - ment community. Undoubtedly, the ongoing change that will most affect the M&A market in Bulgaria is the intro - duction of a screening regime for foreign direct investments, as mentioned in 2.6 National Secu- rity Review . To the extent that at the time of writ - ing this has still not been implemented in prac - tice, it is difficult to say how significant the delay will be that the implementation of this regime may cause to various transactions affecting areas that relate to the national security of the Republic of Bulgaria, such as energy or finance, for example. As discussed, the secondary leg - islation on the application of the FDI screening regime is not expected to become effective before May 2025, and the effects thereof could become clear enough to be discussed towards the end of 2025 at the earliest. Arguably, the most significant amendment to the M&A legislation in Bulgaria that happened in 2024 is the implementation of the requirements of Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 Novem - ber 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions. In summary, the forms of cross- border transformations under Bulgarian law prior to these amendments were limited to two (merger by acquisition and merger by the forma - tion of a new company), whereas there are now three additional options for cross-border trans - formations, namely full division, partial division
and division by separation. The new amend - ments also provide that any company formed in accordance with the law of a Member State, which has not only its (i) registered office but alternatively its (ii) central administration or (iii) principal place of business in the same or anoth - er Member State, may be subject to a cross- border transformation with a company formed under Bulgarian law. Another amendment, which was introduced in line with the above, is the introduction of an option for a capital company (converting com - pany) that has its registered office in the territory of Bulgaria (departure Member State) to “move” to another Member State (destination Member State) provided that: (a) the converting company changes its registered office to one in the des - tination Member State; and (b) the converting company adopts the legal form of a company that was established in accordance with the leg - islation of the destination Member State, which needs to be one of the types listed in Annex II to Directive (EU) 2017/1132. The same applies vice versa for any company formed under the laws of a Member State other than Bulgaria which intends to “move” its registered office to Bul - garia. 3.2 Significant Changes to Takeover Law In 2020, the POSA was amended to include measures for implementation of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulat - ed market. In addition, in 2022, the POSA was amended to include measures for implementa - tion of Regulation (EU) 2020/1503 of the Euro - pean Parliament and of the Council of 7 October 2020 on European crowdfunding service provid -
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