Bulgaria bans offshore firms from key sectors

Bulgaria’s parliament has passed a law outlawing offshore firms from 28 economic sectors in an attempt to fight shady company ownership, tax fraud and money laundering.

The law adopted on Friday would ban companies registered in offshore zones from applying licenses as banking, credit, insurance, or as mobile-phone operators.

In addition, the offshore companies would be excluded from participation in public procurement, privatization deals and from acquiring shares in professional clubs, newspapers, radio and television operators and polling agencies.

Those companies, which have shares that are traded on the regulated Bulgarian market or another European Union market would be exempt from the new legislation.

The law comes into force on January 1, 2014, and follows intensive debates about the alleged involvement in offshore companies of several top officials.

According to lawmaker Rumen Gechev, offshore companies in Cyprus have an estimated 2.2 billion euros of Bulgarian capital, followed by Luxembourg with 1.6 billion euros and Switzerland with 1.2 billion euros.

Meanwhile, Bulgaria has seen a number of anti-corruption protests in recent months, in which the demonstrators have called for an overhaul of the country’s political system.

Last month, students rallied in 15 universities across Bulgaria, calling on Prime Minister Plamen Oresharski’s cabinet to quit over allegations of corrupt ties with business groups.

In October, university students occupied the main building of St Kliment Ohridski University in the capital Sofia, demanding an end to political corruption in the country.