Expand Business in Bulgaria
Expand Business in Bulgaria
Global Upside helps businesses expand into Bulgaria by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Bulgarian laws and regulations.
The hiring and incorporation processes in Bulgaria are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Bulgaria. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.
Capital City
Sofia
Currency
Bulgarian Lev (BGN)
Language
Bulgarian
Government
Parliamentary Republic
Country Overview
Bulgaria, officially the Republic of Bulgaria, is an east Balkan country in southeast Europe. Bulgaria has a predictable and stable economy and government and has the lowest corporation tax in the EU.
- Around 46% of Bulgaria is agricultural land and the main crops are sunflower, tobacco, and wheat.
- Bulgaria mostly exports petroleum oil, refined and unrefined copper, medicament, and wheat.
- Bulgaria imports mainly petroleum oils, copper ores, motor cars, and petroleum gases.
Options for setting up a legal entity in Bulgaria include:
Limited Liability Company (OOD)
A limited liability company, also known as Drujestvo s Ogranichena Otgovornost (OOD) is a form of an entity set up that requires at least one investor and one director. For effective communication, the company must have a registered office and a bank account in Bulgaria.
Joint-Stock Company (JSC)
A joint-stock company (JSC) requires at least one investor and they have a liability limited by their shared contribution.
Limited Partnership
A limited partnership is a structure that can be set up by more than one partner: general partners are liable for the business responsibilities and limited partners invest money.
General Partnership
A general partnership needs a minimum of two investors under a joint trade name to promote financial transactions.
Partnership Limited by Shares
A partnership limited by shares is a combination of a limited partnership and a joint-stock company. Their liability is determined by the shared contribution.
It takes a minimum of two to three weeks to establish a legal entity set up in Bulgaria.
Employment agreements must be in writing and must be registered with the local office of the National Revenue Agency.
Employees may start working only after they have been provided with evidence that this registration has been made.
Employment agreements must contain details of the parties and specify:
- Job location
- Job description
- The signing date of the contract and the starting date of the employment
- The duration of the employment agreement
- Number of basic and extended annual leave and additional paid annual leaves
- Remuneration and the payment frequency
- Working hours and days
- Notice period
Bulgaria observes the following 14 holidays:
- Jan. 1: New Year’s Day
- March 3: Day of the Liberation of Bulgaria from Ottoman Domination
- Good Friday
- Holy Saturday
- Easter
- Easter Monday
- May 1: Labor and International Workers’ Solidarity Day
- May 6: St. George’s Day
- May 24: “Day of the holy brothers Cyril and Methodius, the Bulgarian alphabet, education and culture, and the Slavic letters”
- Sept. 6: Bulgaria-Rumelia Union Day
- Sept. 22: Bulgaria Independence Day
- Dec. 24: Christmas Eve
- Dec. 25 and 26: Christmas
In Bulgaria, wage payments are made on a monthly basis. The specific date on which the monthly wage payment is made is agreed upon between the employer and the employee.
All companies in Bulgaria must prepare their financial reports per the International Financial Reporting Standards (IFRS).
Corporate Tax
The corporate tax rate in Bulgaria is 10%.
Value Added Tax (VAT)
The VAT rate in Bulgaria is 20%. There is a reduced rate of 9% that applies to specific tourist services.
For the processing of personal data, GDPR is applicable in Bulgaria as it is a member of the EU. According to the law, employers must notify the employees about personal information processing.
Anti-Bribery & Anti-Corruption Law
The New Anti-corruption and Forfeiture of Assets Act (AFAA) entered into force in Bulgaria on 19 January 2018, thus replacing two prevailing laws: the Forfeiture of Illegally Acquired Assets Act and the Prevention of Conflict of Interest Act.
Penalties for corruption offenses:
- Imprisonment from 1 to 15 years
- Penalties up to EUR 10,000
- Confiscation of gained benefits from the act of corruption (CMS 2016)
There is no corporate obligation for corruption felonies; only individuals are prosecuted (CMS 2016).
The Law on Preventing and Detecting Conflicts of Interest and the Civil Servants Act monitor conflicts of interest in the public service. The Law on Protection of Competition and the Public Procurement Act regulate corruption in the public acquisition.
