Bulgarian parliament bans offshore firms from 28 activities
Under a newly adopted law, companies registered in offshore zones will not be granted concessions or exploration permit for minerals in Bulgaria.
They are also excluded from participation in public procurement and privatization, including of municipal property, according to reports of dnevnik.bg.
The provisions are part of the Law on Economic and Financial Relations with Companies Registered in Jurisdictions with Preferential Tax Regimes and Their Real Owners which was conclusively adopted by Parliament on Friday.
The law, initiated by two MPs from liberal party Movement for Rights and Freedoms (DPS), Yordan Tsonev (Chair of the parliamentary budget committee) and Delyan Peevski, bans offshore companies from participating in a total 28 activities. It takes effect on January 1, 2014.
The law bans offshore ownership in professional sports clubs, mobile operators, energy and water companies, radio and TV operators, polling agencies, newspaper publishers and gaming operators.
Companies registered in offshore tax zones will not be allowed to own shares in banks and pension insurance companies in Bulgaria or to apply for insurance license.
Companies registered in offshore zones will not be able to apply for preferential treatment by the state in their capacity as investors, to participate in public-private partnership, or to acquire land and forests from the state. They will also be banned from waste collection and disposal activities, as well as trade in dual-use items.
The law allows exceptions to the ban in a number of cases, including when the shares of the offshore company are traded on a regulated market in an EU Member State, when the parent company of the offshore firm is treated as a resident company for tax purposes in a country with which Bulgaria has signed a double taxation convention, or is treated as a Bulgarian resident and its owners, natural persons, are known.
The companies affected by the new law will have a period of six months to make their activities legally compliant.
Adapted from Novinite