More than 400 are the phantom companies registered in Bulgaria, the Chief of Bulgarian Industrial Chamber Bozhidar Danev said.

In his words part of these companies are used for VAT draining and money laundry.

Danev broke the news at a public discussion on the Draft Law on the Business Register. Under the draft law which in two years all companies in Bulgaria must be registered anew.

The discussion was organized by the Commercial Law Reform Program of the US Agency for International Development (USAID) and the Center for the Study of Democracy in cooperation with the Incorporation Agency at the Ministry of Justice.

Participants in the discussion include representatives of the business organizations, the bar, judges and foreign experts.

The draft law was designed by an interagency working group of experts established with a decision of Bulgaria's Council of Ministers in May 2005. The objective of the law was to set forth the implementation of the first stage of the Strategy for Establishment of a Central Register of the Legal Entities and an Electronic Registration Center in Bulgaria. The adoption of such a law was needed in relation with the requirement of the European Union to all member states to provide for electronic registration of companies by January 1, 2007.