How to Set Up an Entity in Bulgaria

Setting up a local legal entity in Bulgaria offers international businesses access to the European Union’s single market, a competitive tax environment, and a well-qualified labor force. With a corporate tax rate of just 10% and the ability for non-residents to fully own and manage a Bulgarian company, it presents a compelling option for expansion.

The process of incorporating in Bulgaria is relatively straightforward compared to many other jurisdictions, especially for the most common structure, a limited liability company. While bureaucracy is minimal, there are still key steps that require attention—including reserving a business name, preparing notarised documentation, and registering for tax and social security. The main challenges often lie in administrative details, language requirements (official documents must be in Bulgarian), and ensuring ongoing compliance with local accounting, tax, and employment regulations.

The benefits of having a wholly owned local entity include full operational autonomy, the ability to hire employees directly under Bulgarian employment law, and greater control over income and governance, versus relying solely on a third-party employer-of-record service.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Bulgaria?

In Bulgaria, opening an entity means registering a distinct legal company (or branch) under local company law that gives the organization full legal capacity to trade, hire employees, and incur liabilities in its own name. Typically, a foreign investor will form a local subsidiary (a Bulgarian limited liability company) or set up a branch of an existing foreign entity, both of which must be registered with the national commercial register.

Entity overview in Bulgaria

The table below summarises the key parameters for entity registration in Bulgaria. While various structures exist, the limited liability company is the most common for foreign investors.

Step-by-step guide: How to open an entity in Bulgaria

Step 1: Choose the right structure

Bulgarian nationals and resident investors typically form a limited liability company (OOD or single-member EOOD) for its simplicity, flexibility, and limited liability protection. Foreign investors also favor this structure, as they can own 100 % of the shares without restriction.

Larger or publicly oriented businesses often choose a joint-stock company (AD), which requires at least BGN 50,000 (≈ $27,000) in capital and a more formal governance setup. A branch of a foreign company is another option, but it offers less autonomy and keeps liability with the parent entity.

Step 2: Verify business name availability

Use the electronic search facility on the Commercial Register platform maintained by the Registry Agency to check that your proposed company name (in Bulgarian) is available and complies with naming rules (for example, must end with “OOD” for an LLC). You can reserve the name when submitting the incorporation application to avoid duplication.

Step 3: Prepare incorporation documents

You will need to prepare and, where required, notary-certify the following documents:

• Articles of Association or Foundation Deed (depending on entity type)
• Consent of appointed manager/director (notarised specimen signature)
• Proof of deposit of the initial capital (if applicable)
• Registered office address in Bulgaria
• Application form for registration (e.g., Form A4 for an LLC)

You can download the document templates from the registry website.

Step 4: Register with the Registry Agency

Submit the completed documents (physically or electronically) to the Registry Agency’s commercial register. Online registration can be done via the Registry Agency's portal, provided you have a qualified electronic signature (QES) *(*a government-issued digital certificate, purchased for approximately BGN 27 from accredited Bulgarian providers like B-Trust, Borica, or InfoNotary, which legally replaces a handwritten signature under EU eIDAS rules)..

The application may be in Bulgarian (documents in another EU language must be translated and certified), and must pay the registration fee (e.g., BGN 110 via electronic filing for an LLC). Once entered, the company receives a unique Bulgarian company number and a certificate of registration, and the data is published in the online register.

Step 5: Register for tax and social security

Following the company’s registration, it must register with the National Revenue Agency (NRA) to obtain a corporate tax identifier. If turnover is expected to exceed BGN 100,000 within 12 months, VAT registration (standard 20%) is required. The company must also register as an employer with the relevant social security authorities so that employee social security and health insurance contributions can be processed properly.

Step 6: Open a corporate bank account

Open a company bank account in Bulgaria in the company’s name. Most Bulgarian banks will require the company registration certificate, articles of association, directors’ IDs, and proof of the registered address. Some foreign-owned companies may face enhanced KYC (know your customer) procedures. It is standard practice to deposit the minimal share capital (if applicable) prior to registration or simultaneously.

Step 7: Set up payroll and employment compliance

If you plan to hire employees in Bulgaria, you must register as an employer with social security and health insurance authorities, supply employment contracts compliant with Bulgarian labor law, perform monthly payroll withholdings (personal income tax at 10% plus social contributions), and remit employer and employee contributions by the 25th day of the following month. You must also ensure you comply with Bulgarian working hours, leave entitlements, and other labor-law obligations.

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Post-registration obligations

After incorporation, companies in Bulgaria must maintain ongoing compliance with governance, tax, and employment laws. Typical requirements include:

• Tax and financial reporting: File annual corporate income tax returns and annual activity reports with the NRA (usually by 30 June for the previous year) and file annual financial statements under Bulgarian Accounting Standards (in Bulgarian).
• Corporate registers: Maintain and update records of directors, beneficial owners, and shareholders; notify the Registry Agency of any changes within the statutory deadline (e.g., immediately after change).
• Compliance tracking: Monitor tax, VAT, payroll remittance, and other deadlines via a compliance calendar or service provider to avoid late-filing penalties.
• Licenses and renewals: If your business activity requires a license (e.g., financial services, regulated sectors), ensure periodic renewal with the relevant ministry or municipality.
• Record-keeping: Retain accounting, payroll, HR, and transaction records for at least five years (per Bulgarian legislation) so they are available in case of audit.
• Employment law compliance: Continue to comply with Bulgarian labor law, including contracts, social security registration, minimum wage rules (currently BGN 1,077 from 2025), and safe working conditions

Taxes and financial considerations

Here are the key taxation and financial elements to understand when operating a Bulgarian entity:

• Corporate income tax: A flat rate of 10% applies to taxable profits.
• VAT/GST: The standard VAT rate is 20%, with a reduced rate of 9% for certain accommodation and tourism-related services. VAT registration is compulsory if income exceeds BGN 100,000 within 12 months.
• Payroll/social contributions: Employer social security and health-insurance contributions typically amount to about 18.92–19.62% of gross salary, with employee contributions about 13.78 % (so combined 32.7–33.4%).
• Accounting standards: Companies must apply Bulgarian Accounting Standards (which largely align with IFRS for groups) and prepare annual financial statements in Bulgarian.

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Bulgaria—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Bulgaria?
Typically, around 2–4 weeks if all documentation is prepared in advance, though the process can be shortened in some cases.

What is the minimum capital required?
The minimum statutory capital for a limited liability company (OOD) is BGN 2 (≈ $1 USD).

Can foreign companies own 100% of an entity in Bulgaria?
Yes, foreign individuals and corporate entities may own 100% of a Bulgarian company—no requirement for a local partner.

Do I need a local director or representative?
No residency or nationality requirement exists for the manager/director of a standard limited liability company; the manager must be a natural person (not necessarily Bulgarian) and must provide notarised consent.

How much does it cost to register an entity?
Costs include the registration fee (e.g., BGN 110 if filed electronically for an LLC) plus notary and legal services, document translation, and bank account opening fees.

Can I hire employees before the entity is fully registered?
Typically, no, employment must be under a legal entity registered in Bulgaria. However, using an Employer of Record (EOR) like Deel lets you hire immediately while your entity setup is finalized.

Can Deel help me open an entity in Bulgaria?
Yes. Deel Entity Setup manages the end-to-end process—from registration to payroll compliance—in Bulgaria.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant. For teams managing their own entities, Deel Compliance Hub provides real-time regulatory updates, risk alerts, and workforce insights across Bulgaria and other jurisdictions.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready and ensures compliance continuity as you shift from EOR to a directly owned Bulgarian entity.