business in bulgaria

General information

In recent years, Bulgaria has initiated legal and factual steps towards becoming the most attractive investment destination in the region. Some of the actions include introducing the lowest flat corporate tax (10%) and providing institutional support for building new infrastructure near the place of the investment.

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.

Attractive investment segments in service sector are: transport and logistics, information technologies, outsourcing of business processes, health and tourism related to healthy lifestyle.

Leading sectors in industry are: transport equipment and machine building, electronics and electrical engineering, chemical industry, food and agriculture.

For the resources sector: mining and alternative energy.

General Factsheet


General Facts


7,246 million – 61% of the population is in legal working age


110 910 km2

Capital City

Sofia (1,2 million)

Urban population



Bulgarian – 85%; Turkish – 9%,


Bulgarian Lev (fixed rate 1 € = 1,95583 BGN)


Joined EU in 2007; NATO in 2004; WTO in 1996


44 billion EUR for 2015

GDP growth

3% (2016)

Inflation rate

-0.1% (Eurostat 2015)


 683 millions EUR for 2016

Labor force in Bulgaria


Average salary

476 EUR (2015)

Labor productivity per hour

44.4p % (Eurostat 2015, average EC=100%)

Unemployment rate

  9.1% (2015)

 source: NSI, NRA, Eurostat

Benefits of Bulgaria

Political and economic stability

 ● Low investment risk
 ● Low currency risk as the local currency is pegged to EUR
 ● Low budget deficit
 ● All the biggest European banks are represented in Bulgaria
 ● It only takes a couple days to register a new company in Bulgaria. The minimal start-up   capital has been reduced to only 1 EUR. International VAT registration takes 10 days
 ● Bulgaria has signed Double Taxation Treaties with more than 60 countries all over the   world
 ● A symbolical minimum required capital, worth 2 BGN for the private limited liability   company and a simplified registration process
 ● The entire process for a company registration generally takes a couple of days
 ● Bulgaria joined the European Union in January 2007. Since 1998 the local currency rate   has been fixed to the Euro: EUR/BGN = 1.95583

Strategic geographic location

● 5 Pan-European transport corridors
● Bridge between Europe and Asia
● Access 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 Statistic Institute)
● 46% of the population speaks at least one foreign language

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 average
● Business Process Outsourcing (BPO) in Bulgaria with two-digit growth last 10 years with over 40 thousand employees
● Sofia in top 10 cities in the world for start-ups according to Forbes

    "…If you want first-class mathematicians, try looking in Bulgaria."
       William Fitzsimmons, Dean of Admissions & Financial Aid, Harvard College

Balanced work-to-lifestyle logistics

● Bulgarian capital is one of the cheapest European cities according to the rental of residential areas
● Sofia 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 chip but comfortable and reputable accommodation, public transport, three meals and drinks and visiting of one cultural attraction

Other benefits:

● Tax benefits: Bulgaria has the lowest tax within the EU – only 10%. The tax legislation is completely synchronised with the EU legislation. Government policy is focused on building a favourable business climate for foreign investors
● All the biggest European banks are represented
● A symbolical minimum required capital, worth 2 BGN for the private limited liability company and a simplified registration process. The entire process for a company to register in Bulgaria will generally last a few days and only in some cases it lasts up to two weeks


Before undertaking business activity in Bulgaria, it is necessary to choose which type of legal entity to form. The Commercial Act governs business establishment. Regardless of the nationality of their founders, all companies established and registered in Bulgaria are considered to be Bulgarian legal entities and bound by the Bulgarian law.

The following forms are examples of the types of legal entities that can be formed in Bulgaria: Sole-shareholder limited liability company (EOOD); Limited liability company with more than one shareholder (OOD); Joint stock company (AD); Joint stock company (EAD); Branch and Representative office.

The most common legal entities in Bulgaria are limited liability company (EOOD and OOD) and joint-stock company (AD) as they offer the best combination of running costs, management opportunities, limitation of shareholders' liability, legal regulation and administrative requirements.

Read more on how to establish a Business in Bulgaria

If you would like to establish your presence on the Bulgarian market (i.e., branch, subsidiary, holding company, representative office, etc.) we will handle all the formalities: the establishment, incorporation, etc. We will also provide you with comprehensive support and advice in the process.

So that your foreign operations would have the right support from day one, our services include:

● Experienced multilingual staff: English, Bulgarian and Russian
● Documents processing in local language and in accordance with local legislation
● Registrations with all competent authorities, including Commercial Register and VAT
● Open a bank account on behalf of the client under a task framed power of attorney
● Provide a legal address and post handling
● An officially accredited accounting division under the direction of professionally certified accountants and tax advisors
● Comprehensive invoicing and bookkeeping services, sales and inventory statistics, profit calculations, agents’ commission processing and reporting
● Payroll management including salary payments, tax withholdings, and deductions from a paycheck


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 Act.

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 financial penalties

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 million BGN
● Average number of employees for the year is 50 people

The audit is also mandatory for some of the AD-s and KDA-s, emittients 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’s 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.

Read more about Accounting in Bulgaria (incl. important dates and considerations)


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 hours etc.

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 working day
● In seven days term after its termination

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 month.

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 (as a minimum):
● Involved parties
● Physical place (location) where employment will be performed (place of work performance)
● Employment position and work description
● Date of signing and of expected commencement of work
● Duration of the employment
● Duration of the working day or week
● Basic and additional employment remuneration of a permanent nature
● Terms and conditions of employment remuneration payment
● Basic, extended and additional annual paid leave
● Notice period for employment termination, which must be equal for both parties

Read more on Employment and Payroll in Bulgaria


Bulgaria is known as the EU Member State that offers the most favorable tax rates for legal entities. As a standard, foreign companies that are established as a permanent entity and earn profits from Bulgaria, are liable to pay 10% corporate tax on earnings. 

Taxation in Bulgaria is executed on two levels: state and local. Bulgarian state taxes are administered by the National Revenue Agency (NRA). The local taxes are administered by the municipal council.

Three things to do when setting up your company:
● Registering for company tax
● Keeping accounting records
● Preparing a company tax return

NB! You do not need to submit an annual activity report if you meet both of the following conditions:
● You have not operated throughout the year
● You have not reported revenue or expenditure for the year, in accordance with accounting legislation

The standard VAT rate is 20%. The reduced rate is 9% and applies to certain tourist services such as hotels and other places of accommodation. The VAT system is generally aligned with the EU VAT Directive.
Read more on Taxation in Bulgaria


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.

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