Bulgaria has a
very strategic geographical location – it borders with the European Union, and
is on the intersection of Europe and Asia.
Bulgaria is a
parliamentary republic. Its leading industries are: tourism, information
technology and telecommunications, agriculture, pharmaceuticals, and textiles.
segments in the service sector are: transport and logistics, information
technologies, outsourcing of business processes, health and tourism related to
sectors in industry are: transport equipment and machine building, electronics
and electrical engineering, chemical industry, food and agriculture.
resources sector is led by mining and alternative energy.
7,246 million – 61% of the population is in
legal working age
110 910 km2
Sofia (1,2 million)
Bulgarian – 85%; Turkish – 9%,
Bulgarian Lev (fixed rate 1 € = 1,95583 BGN)
Joined EU in 2007; NATO in 2004; WTO in 1996
billion EUR for 2015
-0.1% (Eurostat 2015)
683 millions EUR for 2016
Labor force in Bulgaria
476 EUR (2015)
Labor productivity per hour
44.4p % (Eurostat 2015, average EC=100%)
source: NSI, NRA, Eurostat
Benefits of Bulgaria
Political and economic stability
Bulgaria has been a member of the European Union since January 2007Government policy is focused on building a favorable business climate for foreign investorsLow investment risk Low currency risk as the local currency has been pegged to EUR since 1998Low budget deficit All the biggest European banks are represented in BulgariaIt only takes a couple days to register a new company in Bulgaria. The minimal start-up capital has been reduced to only 2 BGN (1 EUR) for limited liability companies. International VAT registration takes 10 daysBulgaria has signed Double Taxation Treaties with more than 60 countries all over the world
Strategic geographic location
5 Pan-European transport corridors Bridge between Europe and AsiaAccess to profitable markets: Russia, Turkey and the Middle East
Highly-qualified and multilingual workforce
- 30 000 students abroad (data report of Bulgarian National Audit Office 2016)
- 19.6% of the population has a university degree (data National Statistical Institute)
- 46% of the population speaks at least one foreign language
"…If you want first-class mathematicians,
try looking in Bulgaria."
William Fitzsimmons, Dean of Admissions & Financial Aid, Harvard College
Low production costs and taxes
Flat 10% personal income tax and 10% corporate income tax 0% tax in municipalities with unemployment higher than 25% of the country averageBusiness Process Outsourcing (BPO) in Bulgaria with two-digit growth last 10 years with over 40 thousand employeesSofia in top 10 cities in the world for start-ups according to Forbes
Balanced work-to-lifestyle logistics
Sofia is one of the cheapest European cities in terms of office rentSofia is the most affordable city in Europe (Europe Backpacker Index for 2017)Sofia is the best bargaining place to visit in Europe, according to Europe Backpacker Index for 2017. The index is based on daily expenses for cheap but comfortable and reputable accommodation, public transport, three meals and drinks, plus visiting one cultural attraction
Establishing a Business
The establishment of businesses in Bulgaria is
governed by The Commercial Act. Foreign persons who want to establish a
business in Bulgaria have the same rights as Bulgarians. There is no limitation
on the share participation of foreign legal entities and individuals.
The following forms of commercial organization
can be set up:
- Sole-shareholder limited liability
- Limited liability company with
more than one shareholder
- Sole trader, individual company with
- Joint stock company
- Sole shareholder joint stock
- Unlimited partnership set up by
two or more individuals who carry unlimited responsibility
- Limited partnership,
responsibility is set according to agreement
- Partnership limited by shares
- Representative office
- Consortium and holding
Contact us if you wish to get a thorough
comparison of establishing a branch office, subsidiary company, or a
The registration must be carried out by a
professional firm in Bulgaria. It is not possible for foreigners to do business
in Bulgaria without incorporation through a permanent establishment.
Regardless of founders’ nationality, all types
of entities established in Bulgaria are considered as Bulgarian and treated
under Bulgarian legislation system.
The Bulgarian accounting legislation is
generally aligned with the EU legislation. Companies have to observe and keep
their accountancy in compliance with the requirements under the Accountancy
Fiscal year corresponds to the calendar year.
All companies registered in the Commercial Register must announce their annual
financial statement no later than 30 June the following year.
Penalties for not submitting the report on
time are as following:
- For companies – 0.5% of net
revenue from sales
- For directors – individual
Audit is mandatory for companies which either
during current or previous year fill two of the below criteria:
- Balance value of assets towards 31
December is 2 million BGN
- Net sales income for the year is 4
- Average number of employees for
the year is 50 people
The audit is also mandatory for some of the
AD-s and KDA-s, emittents on public markets, insurance companies, credit
institutions, additional social contribution funds, and other companies when required
by legal acts.
Penalties are as follows:
- For company directors – from 500
BGN to 5 000 BGN
- For company – from 2 000 BGN
to 10 000 BGN
Micro, small and medium-sized companies (the
SMEs) can apply National Accounting Standards. Newly established entities are
considered SMEs in the year of their establishment must apply to the rules for
the first and second year.
Companies which for one of the two previous
years exceed the following indicators should apply for International Financial
Reporting Standards (IFRS):
- Balance value of assets towards 31
December is 8 million BGN
- Net sales income for the year is
15 million BGN
- Average number of employees for
the year is 250 people.
However, credit institutions, insurance and
investment companies, pension and health insurance funds and funds managed by
these companies apply no matter what.
Employment contract is signed between the
employee and the employer in a written form, specifying certain statutory
requirements such as place and nature of work, position occupied and the
characteristics of work, basic and additional employment remuneration, working
All employment contracts must be registered
with the respective territorial division of National Revenue Agency:
- In three days term after
concluding or amendment of the employment contract, but before the first
- In seven days term after its
Employment contracts can be concluded for
fixed and indefinite period of time.
Fixed-term contracts can only be signed in
exceptional cases specified in the Labor Code. For both types of contracts,
employers have the opportunity to assess employees capability for certain work
through probation period which cannot exceed six month.
Employers report monthly information about
employees’ social contributions and personal income tax. Declaration for social
contributions should be submitted until the 25th of the following
Employers’ legal responsibility is to pay over
employee’s tax and social security deductions to the Bulgarian tax authorities.
Implied terms of the contract
Employment contract must include:
- Involved parties
- Physical location where employment
will be performed
- Employment position and work
- Date of signing and of expected
commencement of work
- Duration of the contract
- Duration of the working day or
- Basic and, if applicable, any
additional employment remuneration
- Terms and conditions of employment
- Annual paid leaves (basic,
- A common notice period for
Bulgaria has two levels of taxes: state taxes
belong to the capacity of the National Revenue Agency (NRA), local taxes to
that of the municipal councils.
When establishing your
company, first you need to:
- Register your company for taxation
- Start keeping financial records
- Start preparing a tax return
annual activity report is not needed if your company shows no activity
throughout the year or if there are no reported revenues and expenditures,
compliant with Bulgaria’s accounting law.
BEING AN EXPAT
The citizens of the EU, EEA and Switzerland can be employed, self-employed or sent to a business trip to Bulgaria without restrictions and without a work permit since the country is a member of the EU. Special rules are also provided for family members of the EU, EEA and Swiss citizens.
Expats wishing to work in Bulgaria must apply for a temporary residence permit beforehand (consequently a work permit for non -EU, EEA citizens) or a permanent residence (no work permit needed). They may either arrange this along with their Bulgarian employers while they reside outside of Bulgaria. Alternatively, non -EU, EEA expats may enter the country, look for work, and then leave the country to process the visa. Company’s Directors or Members of Board of Directors do not need a work permit.
Foreigners looking to reside in Bulgaria have plenty of opportunities to rent apartments although expats are advised to seek out real estate agencies when looking for an accommodation.