Key Takeaways
- Bulgaria provides the corporate tax and cost-effective business operations that companies need to maximise profit and remain competitive.
- The nation’s advantageous location gives easy access to European and international markets, complemented by strong transport infrastructure and EU membership advantages.
- Selecting the appropriate business structure, whether that be a limited liability company or joint-stock company, is essential for meeting your objectives, mitigating liability, and attracting investment.
- Incorporation entails meticulous documentation, legal requirements, a registered address and a capital deposit made on time, with local expertise advised to achieve that most rapidly.
- After incorporation, tasks like opening a bank account, VAT registration and bookkeeping are necessary for compliant and smooth business operations.
- Knowing all the costs involved, local business culture and administrative requirements in Bulgaria will help make for a successful and sustainable business.
Bulgaria business incorporation equates to business incorporation under Bulgarian legislation, which provides entry to the EU market.
Most companies opt for a limited liability or joint-stock structure, with distinct regulations regarding share capital and administration.
The process involves name check, registration with authorities and opening a local bank account.
Expenses and time frames remain low in comparison with other EU nations.
The primary steps and regulations are straightforward, and are open for foreign proprietors.
Why Choose Bulgaria?
Bulgaria is a smart option for registration. Its attraction lies in a mix of high tax efficiency, central location, cost effectiveness, and the obvious advantages of EU membership.
The Tax Advantage
Bulgaria’s 10% flat corporate tax rate is one of the lowest in the EU. This percentage is applicable on all company profits – tax planning is therefore easy and predictable. The state levies a 10% flat personal income tax and only a 5% tax on dividends, which translates into significant savings for both companies and individuals.
Feature | Bulgaria | Western Europe (average) | Advantage |
|---|---|---|---|
Corporate Tax Rate | 10% | 20–30% | Lower tax burden |
Personal Income Tax | 10% | 20–45% | More take-home pay |
Dividend Tax | 5% | 15–30% | Higher net returns |
Double Tax Treaties | 70+ countries | Varies | Avoids double tax |
Incorporation Time | 2–3 weeks | 3–8 weeks | Faster setup |
Bulgaria has double tax treaties in place with over 70 countries, ensuring businesses don’t pay tax twice on income. Smart tax planning, combined with transparent domestic regulations, enables most businesses to optimise profit margins while remaining compliant.
Strategic Location
Bulgaria is positioned at the intersection of Europe, the Middle East, and Asia, making it a perfect hub for trade and distribution. Sofia, Bulgaria’s capital, is a gateway, connecting business to East and West European markets.
The country’s open market access in Southeast Europe provides companies with access to a broader market. Its transport infrastructure – roads, ports and railways – keeps supply chains seamless and costs low.
Operational Costs
Bulgaria has a low cost of doing business. Labour costs are among the most competitive in the EU and Sofia has the cheapest office rent of any European capital.
Utilities and services are inexpensive, ensuring low monthly outgoings for most businesses. In contrast to Western Europe, Bulgaria has a straightforward cost per employee and office space.
That means a pool of talented employees is at your fingertips, with more than 6,500 IT graduates each year and a global top-five ranking in programming skills.
EU Membership
Being an EU member gives you access to the single market. Bulgarian businesses trade freely and have high standards for consumer protection.
EU funding and grants are open to Bulgarian firms. This boosts business credibility.
Select Your Business Structure
One of the most important decisions when starting a business in Bulgaria is selecting the appropriate business structure. Each has its own regulations, legal obligations and prospects for expansion. It determines everything from how much risk you assume through to how you seek investment. Bulgaria offers various business forms, all with their pros and cons.
Limited Liability (OOD/EOOD)
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An OOD, or limited liability company, is a popular choice among both local and foreign entrepreneurs. It shields your personal assets from debts or claims against the business, so that only the company’s assets are at stake if something goes awry.
Establishing an OOD is easy, with a low minimum capital requirement (currently only 2 BGN) to get started. Owners, or shareholders, establish a general meeting as their ultimate decision maker. The manager operates the business on a day-to-day basis, handling third parties.
This model applies to sole owner (EOOD) and multi-owner (OOD) scenarios alike. OODs are adaptable, allowing you to structure management and divide ownership however you want, which works for both small and expanding businesses. The OOD format’s clarity helps you build trust with investors and clients.
Joint-Stock (AD)
For companies seeing high growth and seeking increased funding, the joint-stock company (Aktieselskab, or AD) is usually the next step up. The AD lets you raise capital by selling shares, which is handy if you plan to attract outside investors or even list the company on a stock exchange.
You’ll require minimum share capital (currently 50,000 BGN) and will need to put in place explicit shareholder agreements. There are additional checks from authorities and reporting requirements, so more bureaucracy and higher start-up costs – state, bank and other fees can be as high as 300 BGN.
An AD has serious market presence. It paves the way for future IPOs, simplifying the process of luring bigger investment or growing beyond Bulgaria.
Other Forms
There are other structures for special needs. Sole traders are ideal for individual founders who want complete control but don’t mind being personally liable for debts.
What are the advantages of partnerships? In a general partnership, all partners share personal liability. So limited partners share risk, meaning that one or more partners only risk their initial investment. Any new partner always has to be approved by all the others.
Foreign companies may establish a branch office in Bulgaria. This allows you to operate locally without having to establish a new corporate entity, keeping matters straightforward and direct.
How to Incorporate a Business in Bulgaria
Incorporating in Bulgaria is a smart move for many, with a simple process and a minimal corporate tax rate (10%). Local and foreign nationals can own and run businesses, making it a flexible and accessible market. Below is an overview of the main steps involved:
- Collect and prepare all essential documentation (notarised translations if necessary)
- Appoint a director who meets legal requirements.
- Secure a registered office address within Bulgaria.
- Open a capital account with a local bank for your share capital.
- File incorporation documents with the Bulgarian Trade Register.
- Pay registration fees and track the application status.
- Obtain business licences and permits relevant to your industry.
1. Prepare Your Documents
Documents needed include a foundation deed, proof of address and documentation. You will have to produce a notarised memorandum of association if you opt for a limited liability company. For JSCs, draft articles of association.
Ensure all documents are in Bulgarian, or translated and notarised, as untranslated paperwork can prolong proceedings. Then your business plan and clear financial projections support the registration, particularly if you’re applying for special permits.
Requirements may vary by entity type – for instance, partnerships often require extra shareholder contracts. Being meticulous with your paperwork helps prevent missed details that will cause delays.
2. Appoint a Director
Every Bulgarian company has to have at least one director. The director may be local or foreign, but must be a real natural person with full legal capacity. There are specific legal responsibilities attached to the position – managing operations, acting on behalf of the business and ensuring adherence to labour and tax filings.
It’s important to record this appointment by way of a signed resolution or minutes. This ensures the firm’s corporate status remains clear and disputes or compliance problems are avoided down the line.
Foreign directors need to provide additional documents, such as valid passports and proof of residence, sometimes criminal records checks.
3. Secure a Legal Address
A registered office address in Bulgaria is required. Most opt for virtual office services to save money, particularly for start-ups or overseas. It has to satisfy zoning and business licensing rules – so check these before you sign a lease or contract.
Make sure your address records are up-to-date so that authorities and clients can contact you. Changing addresses later is doable but requires additional paperwork.
4. Open a Capital Account
Open a capital account with a Bulgarian bank. You’ll need to pay the minimum share capital (typically BGN 2 for an OOD, the limited liability company). Take your ID and company documents for approval.
Pick a bank that knows business and will provide English-speaking support. This is always required prior to registration and takes a few days.
5. Submit to the Registry
Submit your complete incorporation documents to the Bulgarian Trade Register. Pay the applicable fees, which are small compared to most other EU countries.
Track application status online. If they request further details, respond promptly to avoid the lagging. Once approved, you will receive a unique company number. This allows your company to trade, open accounts and apply for industry-specific licences or permits.
Your Post-Incorporation Checklist
A post-incorporation checklist will guide you on what you need to do once your company is established in Bulgaria. It’s not simply box-ticking either, it’s about being on top of requirements and deadlines, and establishing a strong base for your business.
Opening a bank account, registering for tax and VAT and ensuring you don’t fall foul of regulations are all crucial steps. Bugarska Net lawyers and accountants can assist with every step, making it pain-free for you.
Bank Account
A business bank account is essential for managing your company’s money and separating it from your personal funds. Most Bulgarian banks have accounts for companies, with online banking and payments in euros or other major currencies.
You’ll have to present your Certificate of Incorporation, proof of address and ID for each director. Banks can request affidavits under Article 13(4) of the Commercial Register and Non-Profit Legal Entities Act, too.
When it opens, monitor your account to monitor spending and income, and simplify financial reporting.
VAT Registration
If your business exceeds the Bulgarian tax authorities’ VAT threshold, you’ll need to register for VAT. This process takes 12 days and you’ll need to consider how VAT is going to alter your pricing, invoices and reporting.
You can stay compliant with VAT regulations and steer clear of unnecessary fines with accurate records of each sale and purchase. With a tax adviser, you’ll have the right set-up and be compliant, because VAT rules can become complex if you’re dealing with cross-border sales or services.
Director Insurance
Directors insurance protects you against claims or losses associated with operating your business. It’s not a legal requirement in Bulgaria, but directors frequently take out this cover.
Consider professional indemnity insurance and choose a policy that meets your business risks (for example, if you operate in finance, tech or manage large contracts). Laws evolve, and so ensure you confirm whether rules around director insurance are current.
Check your policy annually to ensure it suits your business as it develops.
Accounting Setup
- Go with in-house or outsourced accounting for your business?
- Use accounting software for bookkeeping, payroll, and tax records.
- Be sure to register for tax with the authorities and have all licences and permits up to date.
- Monitor your finances regularly to notice trends and inform decisions.
What Are The Costs?
Establishing a business in Bulgaria involves considering the initial and recurring costs. Every phase – registration, setup and day-to-day running – has its own costs. These can include bureaucratic fees and solicitors’ bills, to running costs such as a bookkeeper and payroll.
Below is a breakdown of the main costs you should budget for:
- Company registration fees (government, notary, lawyer)
- Minimum share capital (from 1 euro for Limited, 50,000 BGN for other options)
- Document preparation and legal consultation
- Property transfer service fees (if buying property)
- Nominal office, correspondence, and secretarial services (15–150 euros/month)
- Ongoing accounting fees, tax payments, and compliance costs
- Employee salaries and social contributions
- Marketing, business development, and advisory expenses
- Professional service providers’ fees
- Miscellaneous and unexpected expenses
Initial Fees
The initial costs for registering a company in Bulgaria are made up of a government registration fee, which is low compared to other EU countries. Don’t forget notary and legal costs, as having a lawyer is mandatory for the formation of a company. They aren’t set in stone, and vary depending on who you recruit and what sort of something you’re incorporating.
Businesses pay for document drafting, translation and legal consultation. That can add anything from a couple of hundred euros to four figures, depending on complexity. Certain companies provide package deals, with some hidden costs or otherwise.
Make sure all costs are above board before you begin, as hidden charges can crop up. For Ltd companies, the minimum share capital is 1 euro, but for others it can be 50,000 BGN, a quarter of this due immediately. If it’s property, property transfer services start at 0.7% of the price – with a minimum of €500.
All-Inclusive Company Formation in Bulgaria by Bugarska.net
Unlike many firms that lure you with “cheap” up-front fees only to spring hidden costs later, Bugarska.net offers transparent, all-inclusive company formation packages. For a fixed price of just 1,500 EUR, you get:
- Full legal support and company registration – everything handled by our expert team.
- Document drafting, translation, and full legal compliance.
We understand that every business is different. That’s why our initial consultations start from just 100 EUR per hour, giving you direct access to our experienced lawyers and business consultants. You get honest, practical advice tailored to your project and industry.
Want to go further? Our experts can prepare a full business plan, conduct thorough market research, and help you optimize your tax and business structure – perfect for startups as well as established companies looking to enter Bulgaria or the EU market.
Tax Optimization for All Business Sizes: Whether you are a micro, small, medium, or large enterprise, we advise on the best tax models and help you benefit from Bulgaria’s competitive corporate tax rates.
No hidden costs. No last-minute surprises. With Bugarska.net, you start your Bulgarian business the right way – legally, efficiently, and with full confidence.
Ongoing Expenses
Annual accounting services are a staple, and pricing changes, but cost more if audit or intricate reports are required. Bulgarian law does change from time to time, therefore staying on top of compliance issues is essential for any company.
Routine accounting, tax filing and compliance can get expensive for businesses with larger operations. You’ll also have ongoing costs for things like office services. Nominal office/secretarial assistance can be between €50 and €150 per month.
There are employee wages, benefits and social insurance costs to be taken into consideration, too. Marketing and business development spend keeps the company top of mind. It’s good to review your budget regularly, particularly as your business develops.
Routine Accounting and Business Licensing Solutions by Bugarska.net
Routine accounting, tax filing, and compliance can get expensive, especially as your business grows. At Bugarska.net, we offer reliable accounting services starting from 150 to 250 EUR per month, depending on the complexity and volume of your operations.
In addition to accounting, we provide full assistance in obtaining licenses for various business activities at accessible prices, including:
- Construction sector companies
- Staffing and employment agencies
- Logistics and transport firms
- Pharmacies and healthcare institutions
- …and many other business fields!
You get ongoing support and cost-effective solutions tailored to your business needs, whether you’re just starting out or scaling up in Bulgaria and the EU.
Choose Bugarska.net for a smooth, compliant, and professional business experience – from registration to daily operations and industry-specific licensing.
Budget Planning
Keep a full and detailed budget which will take into account all set up and running costs. There are obvious things you can itemise, such as solicitors and government fees, and initial payments for capital contributions or real estate.
Ongoing expenses—such as accounting, office space and payroll—would need to be factored in at least for the first year. Request fee breakdowns from every supplier. Compare quotes – some will appear cheaper but omit important services.
Employing an accountant or business advisor can help identify holes in your plan and prevent expensive missteps.
Bulgaria vs Other EU Countries
Bulgaria has lower registration and running costs. Standard setup fees are lower than in most other EU countries. Recurring costs for office services, accounting and staff can be 30-50% lower than Western Europe.
Which makes Bulgaria a great place to keep costs down.
Beyond the Paperwork: A Reality Check
Registering a business in Bulgaria is not just about completing paperwork and checking off boxes. It involves grappling with the country’s legal, financial and social systems in real time. New founders have to master more than so-called “paperwork” – such as social security contributions, holiday periods and changing employment and taxation rules.
Bulgaria’s simple 10% personal tax is a definite plus, as are its high employer social security contributions (19.65%, or 18.92% when certain conditions are met) and its minimum share capital of 26,000 euros (25% upfront). Compliance is compulsory, with fines of as much as EUR 10,226 for violations of labour law. The GDP growth rate, forecast at 2.7% for 2024, and the standard tax year (1 January–31 December) also contribute to business planning.
Local circumstances – from red tape to bank holidays – can stymie progress. Services such as Bugarska NET take care of everything from company formation to continued support to make entering the Bulgarian market easier.
The Language Barrier
Most day-to-day communication in Bulgarian business occurs in Bulgarian. If the translation is not your own, hire bilingual staff or use translation services (these can be a good investment!) and fill those ugly gaps to prevent misunderstandings. Technology aids as well – translation tools and apps can render meetings and paperwork much more frictionless.
Learning a few Bulgarian words and phrases helps when you meet local clients or officials. Even saying hello or thank you demonstrates you share mutual respect and can go a long way. When it comes to paperwork and local authorities, local consultants familiar with the language and culture can smooth the path.
Bugarska.net has professional translators and all your needs from English to Bulgarian.
Bureaucratic Pace
Bulgaria’s bureaucracy works at its own pace, so allow plenty of time. Be patient and have your paperwork in order to prevent last-minute issues. Administrative activities eat up the clock, from establishing a company to obtaining operating permits.
Prepare for this, and don’t be on the lookout for fast-response solutions. Establishing good relationships with local authorities is useful – sometimes a friendly face can expedite things. Good communication and organised paperwork help expedite things.
Bugarska NET simplifies these processes, frequently completing the business formation within a matter of days.
Local Nuances
Business in Bulgaria has its own traditions. Knowing the local ways – such as what to do in meetings or why some contracts take longer to negotiate – helps you adjust. Being culturally aware is vital in order to get along with clients or staff.
Networking with local business owners will show you what’s effective and what to steer clear of. You want to change your style, be agile and open-minded. Bulgaria is a market ripe for growth – the key to success is how well you take the temperature on the ground.
Bugarska NET’s team knows the ropes and will take care of the tricky bits for you.
Ready to take the next step?
Contact Bugarska.net today for a free initial consultation and discover how we can help you establish and grow your business in Bulgaria with confidence.
Email us at support@bugarska.net or call +359 877 077 225 – our team is here to answer all your questions and guide you through every stage of your business journey!
Conclusion
So to start a business in Bulgaria, what are the steps? Choose a company type, submit the correct forms, clear the fees and pass the checks. With low costs, straightforward regulations and a place in the EU, Bulgaria is a popular country for incorporation. It’s a quick process with the right support. Local advice saves time and mistakes for many. Tech start-ups, boutiques, and new labels all established there. With clear rules and a fast pace, Bulgaria is a great choice for new records. Set up your concept and discuss it with a local professional for your next step.” Easy actions now make your company grow firm later. Always maintain your objectives in your sights, and see what works best for your plan.
Frequently Asked Questions
What are the main benefits of incorporating a business in Bulgaria?
Bulgaria provides low taxes, cheap labour, and convenient access to the European market. The incorporation process is simple and inexpensive, appealing to foreign entrepreneurs.
How long does it take to incorporate a business in Bulgaria?
On average, it takes around a week to register. This involves document preparation, filing them to the Commercial Register and getting them approved.
Can foreigners own 100% of a Bulgarian company?
Can foreigners own 100% of a company in Bulgaria? No limits on foreign ownership for most types of company.
What is the minimum share capital required?
For an OOD, the minimum share capital is 2 BGN (approx. 1 EUR). Other forms of companies might have alternative criteria.
Are there ongoing compliance requirements after incorporation?
Sure, companies have to submit yearly accounts, pay tax, and comply with local labour law. Ongoing bookkeeping and reporting is necessary too.
Do I need a local address to register a business in Bulgaria?
Yes, a registered office address in Bulgaria is required. This address is for receipting official correspondence and legal notices.
What are the common types of business structures in Bulgaria?
These are most frequently OOD, AD, and Sole Proprietorship. Each has diverse requirements and advantages, suitable for different businesses.
Daniel Malbašić is a business expert with extensive experience in the field of business consulting, organization and business optimization. His expertise includes market analysis, strategic planning, and implementation of effective business solutions. Daniel is dedicated to helping companies grow and improve their operations, providing them with comprehensive support in making key business decisions.
