Bordering both the European Union (EU) and Asia, Bulgaria’s strategic geography makes it an appealing location for foreign-owned businesses. With a thriving resources sector dominated by mining and alternative energy, and other leading industries including tourism, information technology, agriculture, pharmaceuticals, and textiles, Bulgaria opens the door to a prosperous market full of opportunity.
Compiled by Leinonen’s financial experts, this article serves as a guide to the basics of doing business in Bulgaria. Alongside general benefits and considerations, we will discuss the logistics of establishing a business and managing employment, payroll and taxation in the country.
Business in Bulgaria: General Factsheet
| General Facts | |
| Population | 6.45 million (as of 2023) |
| Area | 110,910 km2 |
| Capital City | Sofia (1.2 million) |
| Urban Population | 75.7% (as of 2020) |
| Languages | Bulgarian (85%), Turkish (9%) |
| Currency | Bulgarian Lev (fixed rate EUR 1 = BGN 1.95583) |
| Memberships | Schengen Zone (2025), EU (2007), NATO (2004), WTO (1996) |
| GDP | USD 102.41 billion (as of 2023) |
| GDP growth | 2.8% (2024) |
| Inflation rate | 2.4% (2024) |
| FDI | EUR 683 million (2016) |
| Labour Force in Bulgaria | |
| Average gross monthly salary | BGN 2,468 (as of 2024) |
| Labour productivity per hour | 44.4p% (Eurostat 2015, average EC = 100%) |
| Unemployment rate | 4.8% (as of January 2022) |
5 Benefits of Doing Business in Bulgaria
1. Political and Economic Stability
Bulgaria has been an EU member state since January 2007, and government policy is focused on building a favourable business climate for foreign investors. All the biggest banks are represented in Bulgaria, and the country has signed Double Taxation Treaties with more than 60 countries.
This means:
- Low investment risk
- Low currency risk (local currency has been pegged to EUR since 1998)
- Low budget deficit
2. Strategic Geographical Location
Bulgaria has access to five pan-European transport corridors. Serving as a bridge between Europe and Asia, it has easy access to profitable markets like Türkiye and the Middle East. In 2025, Bulgaria entered the Schengen zone, opening the door to easier trade and movement between other member states. Find out more on the benefits of establishing a business in Bulgaria now it is in the Schengen area in this article by Leinonen.
3. Highly Qualified, Multilingual Workforce
- In 2024, there were 15,737 foreign students in Bulgaria from countries including Greece, United Kingdom, Ukraine, Germany, and Italy
- 1 in 4 people in Bulgaria had a university degree in 2021, according to the National Statistical Institute (NSI)
- 46% of the population of Bulgaria speaks at least one foreign language
“…If you want first-class mathematicians, try looking in Bulgaria.”
Willian Fitzsimmons, Dean of Admissions & Financial Aid, Harvard College
4. Low Production Costs and Taxes
- Flat 10% personal income tax
- 10% corporate income tax
- 0% tax in municipalities with unemployment higher than 25% of the country average
- Business Process Outsourcing (BPO) in Bulgaria saw two digit growth in the last decade, with over 40 thousand employees
- Sofia in top 10 cities in the world for start-ups according to Forbes
5. Balanced Work to Lifestyle Logistics
Day to day living costs in Bulgaria are good, and Sofia is one of the cheapest European cities in terms of office rent. According to the Europe Backpacker Index for 2017, it is the most affordable city and best bargaining place to visit in Europe.
Establishing a Business in Bulgaria
The establishment of a business in Bulgaria is governed by The Commercial Act. Foreign persons who want to establish a business have the same rights as Bulgarians, and there is no limitation on the share participation of foreign legal entities and individuals. It only takes a couple of days to register a new company in Bulgaria; minimum start-up capital has been reduced to only BGN 2 (EUR 1) for limited liability companies, and international VAT registration takes just 10 days.
The following forms of commercial organisation can be set up:
- Sole shareholder limited liability company
- Limited liability company with more than one shareholder
- Sole trader, individual company with unlimited liability
- Joint stock company
- Sole shareholder joint stock company
- 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
- Branch
- Representative office
- Consortium and holding
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 the founders’ nationality, all types of entities established in Bulgaria are considered Bulgarian and treated under the Bulgarian legislation system.
Contact us if you wish to get a thorough comparison of establishing a branch office, subsidiary company, or a representative office in Bulgaria.
Accounting in Bulgaria
The Bulgarian accounting legislation is generally aligned with 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, and all companies 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 follows:
- For companies – 0.5% of net revenue from sales
- For directors – individual financial penalties
Audit is mandatory for companies which meet or exceed two of the below criteria during the current or previous year:
- Balance value of assets towards 31 December is BGN 2 million
- Net sales income for the year is BGN 4 million
- 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 BGN 500 to BGN 5,000
- For companies – from BGN 2,000 to BGN 10,000
Micro, small and medium-sized companies (SMEs) can apply National Accounting Standards. Newly established entities are considered SMEs in the year of their establishment, and must comply with these 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 BGN 8 million
- Net sales income for the year is BGN 15 million
- Average number of employees for the year is 250 people
However, it is worth noting that credit institutions, insurance and investment companies, pension and health insurance funds (and funds managed by these companies) must apply, no matter what.
Leinonen is happy to help with all of your accounting needs in Bulgaria.
Employment in Bulgaria
Employment contracts in Bulgaria are signed between the employee and the employer in a written form, specifying certain statutory requirements.
Employment contracts must include:
- Involved parties
- Physical location where employment will be performed
- Employment position and work description
- Date of signing and of expected commencement of work
- Duration of the contract
- Duration of the working day or week
- Basic and, if applicable, any additional employment remuneration
- Terms and conditions of employment remuneration payment
- Annual paid leaves (basic, extended, additional)
- A common notice period for employment termination
All employment contracts must be registered with the respective territorial division of the National Revenue Agency (NRA):
- In three days after concluding or amendment of the employment contract, but before the first working day
- In seven days after its termination
Employment contracts can be concluded for a fixed or indefinite period of time. Fixed-term contracts can only be signed in exceptional cases specified in the Labour Code. For both types of contracts, employers have the opportunity to assess an employee’s capability for certain work through a probation period not exceeding six months.
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. It is an employer’s legal responsibility to pay over employees’ tax and social security deductions to the Bulgarian tax authorities.
Avoid penalties and ensure everything is done correctly and on time by outsourcing your payroll management to Leinonen.
Taxation in Bulgaria
Bulgaria has two levels of taxes: state taxes that go to the NRA, and local taxes paid to municipal councils.
When establishing your company, you need to:
- Register your company for taxation
- Start keeping financial records
- Start preparing a tax return
An 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
Citizens of the EU, EEA and Switzerland can be employed, self-employed or sent on 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 from the EU, EEA and Switzerland.
Expats wishing to work in Bulgaria must apply for a temporary residence permit (consequently a work permit for non-EU/EEA citizens) or a permanent residence (no work permit needed) beforehand. They may arrange this along with their Bulgarian employers while they reside outside of Bulgaria. Alternatively, non-EU/EEA expats may enter the country to look for work, and then leave the country to process the visa. Company 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 accommodation.
Doing Business in Bulgaria? Get Expert Support Today
Leinonen’s financial specialists have been assisting foreign-owned businesses in Bulgaria for almost 15 years. Our local experts stay up to date on the latest tax, payroll, and accounting legislations, providing peace of mind to over 1500 clients across the EU.
