Bulgarian Banks to Offer In-Person Meetings for Foreign-Owned Entities

In a significant development, Bulgarian banks will now offer in-person meetings with bank officials and local document signing for foreign-owned entities looking to open a bank account. This move aims to simplify the process and reduce turnaround times.

Who Can Open a Bank Account?

The Bulgarian banking system allows authorized individuals or proxies to open a bank account on behalf of a foreign-owned entity. For legal entities with foreign capital or foreign entities, including civil society organizations (CSOs), the account can be opened by:

• The entity’s legal representative
• A proxy with a notarized power of attorney

For individual clients, bank accounts can be opened personally or through a proxy under a notarized power of attorney. Online account opening is also possible, but may require physical meetings for foreign-owned entities.

Account Opening Process

The process of setting up a bank account varies between institutions, but all banks conduct extensive customer due diligence (CDD) checks, which can take around 1-2 months to complete. During this time, clients will be required to provide original notarized documents, including:

• Excerpts from corporate registries
• Copies of articles of association
• Other materials as determined by the bank’s compliance department

Customer Due Diligence Requirements

Bulgarian banks require legal entities, including CSOs, to provide a range of documentation, including:

• Original notarized excerpts from corporate registries
• Copies of articles of association
• Other materials as determined by the bank’s compliance department

Suspicious Transaction Monitoring

Banks in Bulgaria have internal principles and official criteria for monitoring suspicious transactions. These criteria are publicly available and apply to all entities, including CSOs. The triggers for suspicious transactions differ between entities based on their internal rules, which are presented and approved by the Bulgarian State Agency for National Security (SANS).

Reporting Obligations

Bulgarian banks are required to report any suspected money laundering or terrorist financing activities to SANS, regardless of the value of the transaction. They must also block any pending transactions from the relevant account.

In addition, credit institutions are obligated to:

• Protect client information
• Maintain bank secrecy
• Reveal information only in limited circumstances and in accordance with procedural requirements

Russian Sanctions

There have been no changes to local banking legislation in connection with Russian sanctions. Bulgarian credit institutions/financial institutions are subject to EU regulations imposing sanctions against Russia.

This development is expected to facilitate the account opening process for foreign-owned entities in Bulgaria, promoting greater transparency and efficiency in the country’s financial sector.