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.

Starting a business in Bulgaria

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:

  • Obtaining the nine-digit Tax Identification Number (TIN) from the Registry Agency, which administers the BULSTAT Register (Commercial Register)
  • Obtaining the Unified Identification Code (UIC) or BULSTAT Code. This is used to identify all business entities in Bulgaria and is quoted on all business documents and transactions.
  • Notarize incorporation documents for the Registry Agency – such as the power of attorney, Articles and Memorandum of Association
  • Notarise IDs of all founders of the subsidiary and verify passport details for foreign members.

Expanding your business into Bulgaria

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 Bulgarian Facts

  • Capital – Sofia
  • Population – 6.84 million
  • Regions – Bulgaria has 28 provinces (oblasti) and five climatic or topographical regions:  The Danubian Plain, the Balkan Mountains, the Transitional Region, the Rilo-Rhodope Region and the Black Sea Coastal Region.
  • Official language – Bulgarian
  • Economy – US$77.9 million (2021), 72nd globally
  • Leading sectors by GDP – Service 67%, including ICT, tourism, transport, and logistics; Industry 28%, including mining, metallurgy, and pharmaceuticals; Agriculture 5%
  • Primary exports include – Refined and raw copper, packaged medications, refined petroleum, and precious metal ore.
  • Leading imports include – Copper ore, crude petroleum, packaged medications, broadcasting equipment, and cars.
  • Main trading partners – Germany, Italy, Turkey, Romania, Greece, and Russia (before 2022)
  • Government – Unitary parliamentary republic
  • Currency – Bulgarian Lev (BGN)

Advantages and Challenges when entering the Bulgarian Market

Some advantages of entering the Bulgarian market include the following:

  • Location: At the hub of east-west and north-south trade corridors, access to western and northern Europe with Black Sea ports opening routes to the Near East, Middle East and North Africa.
  • Trade: Part of the European Union’s ‘open market’ with access to structural funding from the community.
  • Workforce: Well-educated, flexible towards new trends with low labour costs. Traditional experience in engineering, economics, medicine and science.
  • Taxation: Competitive rates for personal and corporate taxes are among the lowest in the EU.
  • Incentives: Possibility of state aid and institutional support for incoming companies, public-private partnerships and joint ventures under the Investment Promotion Act.

Some challenges of entering the Bulgarian market include the following:

  • Risks: Perception of lack of transparency in bureaucratic and judicial systems.
  • Red Tape: According to the World Bank, lack of public sector support hinders private sector involvement; acquiring business permits can be difficult.
  • Employment: Potential skills shortages in developing sectors such as ICT, education, chemicals, gas and nuclear energy.
  • Consumers: Discrepancy in spending potential between middle-income to high-earning and low-paid sectors of the economy.
  • Workforce: Low wages can be matched by low productivity.


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