Bulgaria has become an increasingly attractive location for companies planning on entering the Bulgarian market, either with investment or by establishing their corporate presence in the country. It is at a cultural and commercial crossroads of north-south routes to the Mediterranean basin and from west and central Europe towards the Middle East. Bulgaria has a Black Sea coastline and includes nearly 500 kilometres of the iconic River Danube, which forms most of its border with Romania. Bulgaria also borders Serbia, North Macedonia, Greece and Turkey at the eastern end of the Balkan Peninsula.
The Republic of Bulgaria is also strategically placed in the rapidly-developing Central and Eastern Europe (CEE) economic bloc. It is ideally positioned for investment by international companies who have set their sights on the region’s economic potential. Bulgaria’s increasing role in European and global affairs is reflected in memberships of the European Union (EU), the International Monetary Fund (IMF), the United Nations, the World Bank and the World Trade Organisation.
Bulgaria is developing into an open, market-based upper-middle-income economy. Alongside traditional sectors such as manufacturing and engineering, the economy has advanced through the development of Information and Communications Technology (ICT), food production, tourism, energy production and pharmaceuticals. Tourism has become a priority sector for Bulgaria, underpinned by the Ministry of Tourism’s annual action plans to create a supportive business environment that promotes Bulgaria in international markets.
Forward-looking, enterprising international companies entering the Bulgarian market usually take a foothold by establishing a private limited liability company. In Bulgaria this is a drujestvo s ogranichena otgovornost (OOD), which has two or more shareholders. The subsidiary incorporates under the Bulgarian Commerce Act, which regulates different business entities.
Many procedures must be followed to comply with the Commerce Act and the Registry Agency, including:
Expanding your business in Bulgaria, as in any overseas territory, can bring new challenges. Drawing up an expansion blueprint is not enough. Moving staff worldwide means lengthy processes to obtain visas and residence permits. When employees are in place, who will handle payroll? How will your company deal with regulations on taxation, entitlements and benefits, termination and severance? Your business plan will have to deal with all these issues.
Bulgaria has a welcoming business attitude towards foreign investment, with low personal and corporate tax rates and other incentives. But there are always issues surrounding compliance with the relevant legislation. In Bulgaria, this revolves around the Commerce Act, the Labour Code and other laws – plus European Union Directives.
There are other questions, too. Where will you find manufacturers, offices or distributors? A simple and effective alternative is partnering with a Professional Employment Organisation (PEO) and Employer of Record (EOR) such as Bradford Jacobs. This way, companies can plot a time-efficient and cost-effective path to locating and employing staff in Bulgaria.
Some advantages of entering the Bulgarian market include the following:
Some challenges of entering the Bulgarian market include the following:
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