Bulgaria, situated at the crossroads of Europe, has emerged as an attractive destination for both foreign professionals seeking employment and entrepreneurs looking to establish businesses. With its strategic location, affordable living costs, and a growing economy, Bulgaria offers a range of opportunities for individuals and businesses alike. This article provides an overview of the legal requirements and opportunities for working and starting a business in Bulgaria.
Part I: Working in Bulgaria
Residence and Work Permits
Foreign nationals who wish to work in Bulgaria must obtain the appropriate residence and work permits. EU/EEA citizens have the right to work in Bulgaria without a work permit, but they are required to register with the local authorities if they intend to stay longer than 90 days. Non-EU/EEA citizens typically need to secure both a residence permit and a work permit.
Employment Contracts and Conditions
The employment relationship in Bulgaria is governed by the Labor Code, which outlines the rights and obligations of both employers and employees. Employment contracts should be in writing and must include details about working hours, wages, benefits, and other relevant terms. The standard working week is 40 hours, and employees are entitled to paid leave, sick leave, and other benefits.
Taxation and Social Security
Both employees and employers are subject to taxation and social security contributions. Bulgaria has a flat income tax rate of 10%, making it one of the most attractive tax regimes in Europe. Social security contributions are divided between employers and employees and fund various benefits, including healthcare, pensions, and unemployment insurance.
Part II: Starting a Business in Bulgaria
Entrepreneurs looking to establish a business in Bulgaria can choose from several business structures, including sole proprietorships, partnerships, limited liability companies, and joint-stock companies. The most common form of business entity is the limited liability company (LLC), as it offers a balance between limited liability protection and flexibility in management.
Registration – Bulgarian Companies
Registering a company in Bulgaria involves several steps, including selecting a unique business name, drafting articles of association, and submitting the necessary documentation to the Commercial Register at the Bulgarian Registry Agency. This process is relatively straightforward and can often be completed within a few weeks.
Capital Requirements and Shareholders
For an LLC, the minimum required share capital is 2 BGN (2 Bulgarian Leva), which is approximately equivalent to 1 EUR. The share capital can be contributed in cash or in-kind contributions. Companies can have a single shareholder or multiple shareholders, and foreign individuals or entities can own 100% of the shares.
Business Incentives and Opportunities
Bulgaria offers various incentives for businesses, including a favorable corporate tax rate of 10%, a low-cost and skilled workforce, and access to European Union markets. Additionally, the country has made significant efforts to improve its business environment, including streamlining administrative procedures and enhancing investor protections.
Bulgaria’s strategic location, competitive tax rates, and improving business environment make it an attractive destination for both individuals seeking employment and entrepreneurs looking to establish businesses. Understanding the legal requirements for working and starting a business in Bulgaria is crucial for making informed decisions and taking advantage of the opportunities the country has to offer. As with any legal and business endeavor, seeking professional advice and guidance is recommended to ensure compliance with local laws and regulations. If you need any further information, regarding registration of Bulgarian companies don’t hesitate to contact Legalla’s team and we will answer you within 1 business day.