Equity crowdfunding in Bulgaria: raising up to €5M under ECSPR

Equity crowdfunding sounds like the fastest way to turn a community into shareholders. In Europe it is genuinely regulated, legal, and available - just not in the way most founders picture it. The big surprise rarely comes from EU law. It comes from Bulgarian company law: if you're an EOOD, you technically cannot run an equity campaign at all.

The framework is Regulation (EU) 2020/1503 (ECSPR), directly applicable in every member state since 10 November 2021. The transitional period for legacy platforms expired for good on 10 November 2023 - from that date, providing crowdfunding services without a license is prohibited. If a platform offers you a campaign today without an ECSPR license or passport, that alone is a breach.

Here's what actually determines whether your campaign is possible, lawful, and compatible with a future VC round.

What ECSPR covers - and what it doesn't

The regulation captures two forms of business crowdfunding under Article 2(1)(a):

• Equity crowdfunding - placing transferable securities (shares, bonds) and "admitted instruments" without a firm commitment, issued by the project owner or by a special purpose vehicle (SPV), plus receiving and transmitting client orders.
• Crowdlending - facilitating loans between investors and businesses.

Outside the scope (Article 1(2)): donation-based campaigns, reward-based campaigns, consumer lending for personal purposes, and direct public offerings of crypto-assets that aren't transferable securities - those fall under MiCA, Regulation (EU) 2023/1114.

The key threshold: €5,000,000 over 12 months per project owner (Article 1(2)(c)). All prior campaigns by the same company and its related entities in the preceding 12 months count toward it. Exceed it, and the offer automatically falls out of ECSPR.

The €5M ceiling and where KIIS stops

Regulation (EU) 2017/1129 lets member states exempt offers between €1M and €8M from the prospectus requirement. Bulgaria raised its national threshold from €3,000,000 to the BGN equivalent of €8,000,000 (BGN 15,646,640) by amending the Public Offering of Securities Act (ZPPCK).

That leaves three scenarios:

Campaign size	Regime	Document
Up to €5,000,000	ECSPR, via a licensed platform	KIIS (max 6 pages)
€5,000,000 - €8,000,000	National regime under ZPPCK	No EU prospectus, but outside ECSPR
Above €8,000,000	Regulation (EU) 2017/1129	Full prospectus, approved by the FSC

The difference between the two documents isn't cosmetic:

Parameter	Prospectus (2017/1129)	KIIS (ECSPR)
Approval	Mandatory prior approval by the FSC	No FSC approval - reviewed by the platform
Length	Typically 50-200+ pages	Strictly capped at 6 A4 pages
Cost	High (legal, audit, regulatory fees)	Low (standardized template)

That is the entire economic logic of ECSPR: it drops the cost of raising capital from public-offering level to the level of one well-prepared document.

The MiFID II boundary

ECSPR is lex specialis - a special regime that lifts licensed platforms out of MiFID II for the activities covered by their ECSPR license. Placing without a firm commitment, which would otherwise require an investment-firm license, is expressly folded into the ECSPR license.

The boundary is crossed, however, if the platform offers investment advice beyond ECSPR's scope, deals on own account, or operates a multilateral trading facility (MTF). At that point a full MiFID II license becomes mandatory. ESMA's guidance is unambiguous: ECSPR does not open the door to MiFID II activities without the corresponding license.

The problem with your legal form

This is where most Bulgarian campaigns stall. The regulator in Bulgaria is the Financial Supervision Commission (FSC / КФН), which is also the national competent authority under ECSPR - the requirements are integrated into the ZPPCK (State Gazette No. 51/2022, as amended by No. 102/2022 and No. 72/2024).

Form	Fit for equity crowdfunding	Why
OOD / EOOD	Not for direct issuance	Shares are not transferable securities. Every transfer requires notarization under Article 129 of the Commerce Act plus a Commercial Register filing. With hundreds of investors - administrative collapse.
AD / EAD	Yes, this is the standard	Issues dematerialized registered shares - transferable securities. Transfers run through the Central Depository or the shareholder book, no notary. BGN 50,000 minimum capital.
DPK	Grey zone	Introduced into the Commerce Act (Articles 260a-260h) on 30 June 2024 for companies under 50 staff and under BGN 4,000,000 turnover. Shares transfer freely if the articles say so - but neither the FSC nor ESMA has ruled on whether they qualify as "admitted instruments" under Article 2(1)(n) of ECSPR.

If you're an EOOD or OOD, you have two routes. The first is converting the legal form into an AD (Articles 264-264h of the Commerce Act): a conversion plan, a management report, review by an independent certified auditor, and a Commercial Register filing - realistically 2 to 4 months. The second is the foreign SPV structure the platform provides, which leaves your Bulgarian entity untouched.

Even as an AD, pre-emption rights remain: issuing new shares while disapplying existing shareholders' pre-emption rights requires a general meeting resolution with a qualified two-thirds majority (Article 194(4) of the Commerce Act). Plan that before launch, not mid-campaign.

KIIS: six pages you're personally liable for

The Key Investment Information Sheet (KIIS) is mandatory under Article 23 of ECSPR and replaces the prospectus for offers up to €5M. Its structure is set by Delegated Regulation (EU) 2022/2119 and runs to six parts: information on the project owner and team; the mechanics of the raise (target amount, thresholds, deadline); risk factors (business, operational, liquidity, and dilution risk); information on the instruments offered and the rights attached; information on the SPV, if one is used; and investor rights, including the right of withdrawal.

Three things founders underestimate:

• The length is a hard limit. Six A4 pages maximum when printed (Article 23(6)). Small print for risk warnings is prohibited.
• Liability is personal. Under Article 23(9), responsibility for the content sits with the project owner and its administrative, management, or supervisory bodies - meaning founders and directors carry civil liability to investors if the information is misleading or inaccurate. The limitation period under Bulgarian law is the general five years.
• Updating isn't optional. If a material new fact arises during the campaign, you notify the platform immediately; it suspends the campaign and notifies investors, who then have the right to withdraw their offers.

Before handing the KIIS to the platform, prepare financial statements for the last two years (or since incorporation), a current legal status and IP analysis, a defensible financial model behind the valuation, and a list of all existing creditors and preferred shareholders.

Investor protection runs at two speeds

ECSPR splits investors into two categories with sharply different regulatory weight.

Sophisticated investors under Annex II get unrestricted access, no limits, no cooling-off period. Legal entities must meet at least 2 of 3 criteria: own funds of at least €100,000, net turnover of at least €2,000,000, assets of at least €1,000,000. Individuals must meet at least 2 of: gross annual income above €60,000 or a financial instrument portfolio above €100,000; at least one year working in the financial sector in a role requiring investment knowledge; at least 10 transactions per quarter over the last four quarters.

Non-sophisticated (retail) investors get the full protective package:

• Knowledge test under Article 21 and Delegated Regulation (EU) 2022/2114 - checking their understanding of total capital loss, diversification, and illiquidity.
• Loss-bearing simulation - calculated as 10% of the investor's net worth and refreshed every 12 months.
• Large-investment warning - if the offer exceeds the higher of €1,000 or 5% of net worth, the platform must trigger an explicit warning and the investor must confirm they understand the risk.
• Cooling-off period - four calendar days under Article 22, withdrawal without reason and without fees.

One practical detail: being a freelancer or registering as a sole trader does not make an investor "sophisticated". They remain retail unless they explicitly clear the Annex II financial thresholds.

Cap table: the most expensive mistake

Three hundred small shareholders in a Bulgarian AD's share book aren't just administrative weight. Each one has the right to attend the general meeting, request information, and challenge resolutions - and every shareholder, even holding a single share, may inspect the financial statements and general meeting materials under Article 224 of the Commerce Act. Your next institutional investor will read that as risk, not as community.

The two models:

Direct shareholding. Every investor is entered directly in the share book. Maximum transparency, maximum operational friction.

Nominee / SPV structure. Investors pool funds into a dedicated vehicle that enters the Bulgarian startup as a single new shareholder. One entity appears on the cap table, and voting is exercised through a proxy. This is the model leading European platforms use - SeedBlink, for instance, aggregates investors through a Dutch structure. The cost is the ongoing fees of maintaining an SPV in a foreign jurisdiction.

The Commerce Act tools that smooth out the rest:

• Non-voting shares. Article 176 allows preferred shares without voting rights, capped at 50% of the total share count. The practical structure: Class A voting shares for founders and institutional investors, Class B non-voting for crowdfunding investors.
• Drag-along. If the founders and VCs (say, holding 60-75%+ of the capital) agree to sell the company, small investors are obliged to sell on the same terms. Without this clause, a 1% shareholder can block a multi-million exit.
• Tag-along. The mirror-image protection - if the control block sells, crowdfunding investors can join at the same price.

Every campaign investor - directly or through the SPV - must be bound by the Shareholders' Agreement (SHA). That isn't something to defer until later.

The tax picture, briefly

Party / event	Treatment	Rate
Startup - capital raised via shares	Capital contribution, not accounting income (Corporate Income Tax Act)	0%
Startup - loan received	Principal untaxed; interest deductible subject to thin-capitalization rules (Article 43 CITA)	10% corporate tax
Individual investor - dividend	Withholding tax, deducted by the company (Article 38(1) PITA)	5%, final
Individual investor - capital gain	Taxable under Article 33 PITA; the Article 13(1)(3) exemption covers only trades on a regulated market or MTF, which crowdfunding platforms are not	10% on net gain
Tax reliefs for startup investors	None exist under Bulgarian tax law	0%

Reporting: the Article 73(1) and 73(6) returns under the Personal Income Tax Act for income and dividends paid out are filed with the tax agency by 28 February of the following year. Separately, platforms are reporting entities under DAC7 (Directive (EU) 2021/514) for automatic exchange of information - your campaign data travels to tax administrations without your involvement.

How a campaign actually runs

Six phases, of which the first and the last consume the most time:

1. Platform due diligence - legal status, financial hygiene, ultimate beneficial owners (UBOs), and intellectual property.
2. Preparing the KIIS and marketing materials - the platform reviews and approves before publication.
3. Publication - from this moment every retail investor has their four-day withdrawal right.
4. Running the campaign - typically 30 to 60 days.
5. Closing and escrow - funds are collected in a blocked account held by a licensed payment institution. If the soft cap is reached, the money transfers once the capital increase is formalized. If it isn't - 100% returned to investors, with no deductions.
6. Legal closing - issuing the shares and filing the capital increase with the Commercial Register or Central Depository.

During the campaign, Article 27 of ECSPR tightens communication: every marketing communication, including a social media post, must be clearly identifiable as such and cannot contain information materially different from the KIIS. Promising guaranteed returns is prohibited. This is also the single most common startup mistake - an enthusiastic post with a projected return that appears nowhere in the KIIS is a breach.

One frequently overlooked upside: under Article 25 of ECSPR, platforms may run a "bulletin board" where investors post offers to sell their shares. It isn't a regulated market - it simply matches buyers and sellers - but it's the only liquidity your small shareholders will see before an exit.

AML and KYC

The platform runs enhanced due diligence on the startup: identifying the managers and board members, disclosing the full ownership chain down to individuals holding more than 25% under the Anti-Money Laundering Measures Act, and screening against sanctions lists and politically exposed persons lists. Investors go through document identification and a biometric liveness check, and above certain thresholds (typically €2,000) they must evidence the source of funds. Supervision in Bulgaria is shared between the Financial Intelligence Directorate of the State Agency for National Security and the FSC.

If you want to build the platform rather than use one

An ECSPR license is required for facilitating loans, placing without a firm commitment, receiving and transmitting orders, and individual loan portfolio management. The core requirements:

• Capital (Article 11): the higher of €25,000 or 25% of the prior year's fixed overheads, held as common equity tier 1 (CET1) or an insurance policy with matching cover.
• Conflicts of interest (Delegated Regulation (EU) 2022/2111): the platform may hold no participation in any offer on its own platform; shareholders holding over 20% and managers cannot act as project owners or investors on it, save for narrow disclosed exceptions; accepting third-party commissions for routing orders is prohibited.
• FSC procedure: an application on the standardized form from Delegated Regulation (EU) 2022/2112, a completeness check within 25 working days, and a decision within 3 months of a complete application. For lending services, the FSC coordinates with the Bulgarian National Bank.
• Passporting (Article 18): a notification to the FSC listing the member states you intend to operate in; within 10 working days the FSC forwards it to ESMA and the relevant authorities. No new licensing, no physical presence required.

Penalties: what a mistake costs

Sanctions for ECSPR breaches are integrated into the ZPPCK (Articles 221 et seq.):

Breach	Fine
Providing crowdfunding services without a license	BGN 10,000 to 500,000, or up to 2.5% of annual turnover
False or misleading information in the KIIS	BGN 5,000 to 200,000 for legal entities; BGN 2,000 to 50,000 for individuals
Breach of the marketing rules	BGN 5,000 to 100,000
Failing to notify the FSC of structural changes	BGN 2,000 to 20,000

Enforcement isn't theoretical. According to ESMA's sanctions report published in October 2025 covering 2024 data, European regulators imposed more than 970 administrative measures and fines worth over €100 million across capital markets. The first formal ECSPR measure - an injunction to immediately cease activity under Article 3(1) - has already been issued against a platform operating without a license.

Which platforms are open to a Bulgarian startup

Platform	Jurisdiction	Model	Typical size
SeedBlink	Romania (ASF), passported into Bulgaria	Nominee / Dutch SPV	€100,000 - €2,000,000
SpaceCrowd	Bulgaria (FSC-licensed)	Direct / national structuring	€50,000 - €1,000,000
Crowdcube	Spain (CNMV), passported	Nominee structure	€250,000 - €5,000,000
Invesdor	Finland (FIN-FSA) / Germany (BaFin)	Direct and SPV	€500,000 - €5,000,000

The number of Bulgarian platforms licensed directly by the FSC is small - most market activity runs through foreign platforms passported in under Article 18. Before signing, check the specific platform in ESMA's public register.

Pre-launch checklist

• Legal form: are you an AD, or have you budgeted 2-4 months for conversion (or accepted the platform's SPV structure)?
• Threshold: is the campaign amount plus every other raise in the last 12 months under €5,000,000?
• Statements: are financial statements for the last two years finalized and adopted?
• Valuation: do you have a financial model that survives questions from both the platform and an investor?
• Pre-emption rights: has the general meeting passed the two-thirds resolution disapplying pre-emption (Article 194(4))?
• KIIS: does it fit in six pages, and do all directors accept that they are personally liable for its content?
• SHA: is the shareholders' agreement ready with drag-along and tag-along, and does it bind every new investor?
• Share classes: is the Class A / Class B structure within the 50% cap on non-voting shares under Article 176?
• Marketing: is every claim in your promotional material covered by the KIIS?
• After the campaign: is the capital increase filed, are general meeting notices sent 30 days ahead, is the Article 73 return filed by 28 February?

Equity crowdfunding in Bulgaria isn't blocked - it's simply more structural than it looks from the outside. The EU regulation is finished and working; the bottleneck is your Bulgarian legal form and cap table discipline. Solve those two before you open a campaign, and the rest is execution.

If you're still deciding which legal form to choose, start with our guide to corporate structure - the choice between an OOD, AD, and DPK determines whether crowdfunding is an option for you at all.