Doing Business in Bulgaria: A Practical Primer
A practical overview of taxes, company forms and first steps for anyone considering setting up or running a business in Bulgaria.
Bulgaria has spent the past two decades building a reputation as one of the more straightforward places in the European Union to run a company. Low flat taxes, EU membership and, since 2026, the euro make it an option worth a closer look for founders, freelancers and established firms alike.
This primer covers the basics. It is general information, not legal or tax advice. Rules change, and every business is different, so speak to a qualified Bulgarian accountant or lawyer before making decisions.
Why Bulgaria attracts businesses
Several features tend to come up when people explain why they chose Bulgaria:
- Low, flat taxes. Corporate and personal income tax are both levied at a flat 10%.
- EU membership. Bulgaria joined the European Union in 2007, giving companies access to the single market.
- The euro. Since 1 January 2026, Bulgaria uses the euro, removing currency conversion for trade within the euro area.
- Schengen. Bulgaria became a full member of the Schengen area at the start of 2025, easing travel to and from other member countries.
- Operating costs. Office rents and many local services are generally lower than in Western European capitals, though costs in Sofia have risen in recent years.
None of these is a reason on its own to relocate a business, but together they make a credible case.
The tax basics
At the time of writing, the headline tax rates are as follows.
Corporate income tax is a flat 10% on taxable profit. This is among the lowest standard rates in the EU.
Personal income tax is also a flat 10%, without progressive bands. Employees and employers both pay social security and health insurance contributions on top of this, and these contributions represent a significant part of total employment costs. They are subject to a maximum monthly insurable income, which is updated periodically.
Dividend withholding tax is 5% at the time of writing (2026) — check the current rate with the National Revenue Agency, as it has been the subject of budget proposals. Dividends paid to individuals are generally taxed at this rate, while dividends paid to companies in other EU or EEA states may qualify for exemptions. Double tax treaties can also affect the final rate for foreign shareholders.
Value added tax (VAT) has a standard rate of 20%. A reduced rate of 9% applies to certain items, including hotel accommodation. Registration becomes mandatory once turnover passes a set threshold, and voluntary registration is also possible. Companies making certain cross-border supplies within the EU may need to register regardless of turnover.
Taxes are administered by the National Revenue Agency. Its official website carries current rates, deadlines and forms, partly in English.
Choosing a company form
Most small and medium-sized foreign-owned businesses use one of two limited liability structures.
EOOD: single-member limited liability company
An EOOD has one owner, who can be an individual or a legal entity. It is the most common choice for solo founders, freelancers who want to trade through a company, and foreign parent companies setting up a local subsidiary. The owner’s liability is limited to the company’s capital.
OOD: limited liability company with several members
An OOD has two or more partners. It works in much the same way as an EOOD, but adds the need for agreements between partners on matters such as profit distribution, management and the transfer of shares. A well-drafted articles of association is essential here.
The minimum share capital for both forms is nominal, making them inexpensive to set up. Larger enterprises sometimes choose a joint-stock company (AD), which has a higher capital requirement and a more formal governance structure. Foreign companies can also open a branch rather than a subsidiary, though this has different tax and liability consequences.
Practical steps to get started
The process for setting up a company is well established. In broad terms, it usually involves:
- Choosing and checking a name that is not already in use in the Commercial Register.
- Preparing founding documents, such as the articles of association or memorandum and the managers’ declarations.
- Opening a bank account and depositing the share capital.
- Registering with the Commercial Register, maintained by the Registry Agency, which issues a unique identification code (UIC, known locally as EIK).
- Registering for VAT if required or desired.
- Setting up accounting and payroll, typically through a local accounting firm.
Some documents may need to be signed in front of a notary, and documents from abroad often need an apostille and a certified Bulgarian translation. Many entrepreneurs hire a local law firm or accountant to handle the whole process, which saves time and avoids errors in the paperwork.
Banking and compliance
Opening a corporate bank account can take longer than the company registration itself. Banks carry out know-your-customer checks and may ask for proof of the source of funds, details of the ultimate beneficial owners and a description of the planned business activity. Having these ready speeds things up.
Companies must file annual financial statements and tax returns, and keep their beneficial ownership information up to date. Bookkeeping must be kept by a qualified accountant. Missing deadlines can lead to fines, so it pays to agree a clear calendar with your accountant from the start.
Hiring staff
Employment in Bulgaria is governed by the Labour Code. Employment contracts must be in writing and registered with the National Revenue Agency before the employee starts work. Employers must also comply with health and safety requirements and keep proper working time records.
Hiring citizens of other EU countries is straightforward. Hiring people from outside the EU requires work and residence permits, which takes planning.
A final word
Bulgaria’s low taxes and EU access are real advantages, but they are not the whole story. Bureaucracy can still be slow, some procedures remain paper-based, and regional differences in infrastructure and talent are significant. The businesses that do well here usually combine a clear plan with good local advisers.
Treat this article as a starting point. Check the current rules with official sources and qualified professionals before you commit to anything.