Out of Court: Business Entry in Bulgaria

Starting today (January 2), an entrepreneur establishing a business in Bulgaria would not go to the court. Instead, he will visit the newly-established trade registry.

This reform is long overdue: the original date was supposed to be December 2006. It was delayed to July 2007, and again for another six months. With each delay, the deputy minister responsible for the establishment of the trade registry resigned. If another delay takes place, the minister of justice has pledged she would resign too.

Strictly speaking, the earliest the registry would open for business is on January 20. This is due to a time-honored tradition: each year judges and court clerks have 6 weeks off starting mid-December to "clean the inventory of cases." These are currently kept on paper only despite an existing electronic system that can easily accommodate the information.

Previous attempts to take business registration out of the courts have met with the judges' stiff resistance. For a good reason: if the files go (business registration currently account for 40% of all cases) the long vacation may be cut too. Judges would have to deal with real commercial disputes.

Bulgaria joins its neighbors Macedonia and Romania in taking business registration out of the courts. In fact, since 2002 nearly half of the former socialist bloc countries have done so. The result is a faster and cheaper process. And more legal certainty, as the applications are entered electronically, making them difficult to misplace during winter cleaning.