Registering as an employer in Bulgaria can be a simple procedure, particularly for companies looking to employ remote workers without a physical office in the country. The Bulgarian market offers excellent prospects for companies aiming to grow, and with the required paperwork, you can set up your business effectively.
This guide will take you through the entire registration process, starting from obtaining your company's registration number to arranging social security and meeting ongoing compliance requirements. The convenience lies in the fact that many of these tasks can be managed using modern solutions like eBranch or a virtual office setup, eliminating the need for a local entity or PEO service.
Below is a comprehensive overview of the essential documents, important deadlines, and regulatory aspects to ensure accurate submission from the start. By the end of this overview, you will have a clear grasp of the steps needed to register as an employer in the Bulgarian market.
Understand Bulgarian Employment Laws
The Bulgarian employment landscape is relatively straightforward for businesses looking to establish a presence in the country. Let's dive into the key aspects you need to be aware of:
Key Labor Regulations
The Bulgarian Labor Code serves as the foundation for employment practices. As an employer, you'll need to ensure that you have proper written employment contracts in place for all your workers. These contracts should include the following essential elements:
Personal details of both the employer and employee
Job description and workplace location
Working hours (standard 40-hour week)
Salary details and payment schedule
Leave entitlements (minimum 20 paid days annually)
Social Security Requirements
The social security system in Bulgaria is comprehensive, with employers and employees sharing the contributions. The total social security contribution is 32.70-33.40% of gross remuneration, with the employer responsible for 18.92-19.62% and the employee covering the rest.
The social security system provides benefits for:
Temporary work disability
Maternity and unemployment
Retirement and death benefits
Health insurance coverage
Tax Obligations for Employers
Bulgaria's tax system is relatively straightforward, with a flat 10% income tax rate regardless of the income level. As an employer, your main responsibilities include:
Monthly tax withholding and reporting by the 25th of the following month
Registering new hires with the National Revenue Agency within 3 days of contract signing (failure to do so can result in fines ranging from 1,500 to 15,000 BGN)
Splitting social security contributions between eight different funds, including pension, health insurance, and unemployment
These employment-related requirements may seem numerous, but they are quite manageable with the right setup and attention to detail. Many businesses have successfully navigated these obligations without the need for a PEO service, relying on good organization and compliance practices.
EU Employment Law Comparison Chart
Country | Max Trial Period | Permanent Contract Requirement | Firing Complexity | Employer-Paid Sick Leave | Overall Flexibility |
Germany | 6 months | No, but restrictions on fixed-term contracts | High | 6 weeks at full pay | Medium |
France | 2-4 months | No, but restrictions on fixed-term contracts | Very High | Up to 6 months at partial pay | Low |
Italy | 6 months | No, but incentives for permanent contracts | High | Up to 180 days at partial pay | Low |
Spain | 2-6 months | No, but restrictions on fixed-term contracts | Medium | 15 days at full pay | Medium |
Poland | 3 months | No | Medium | 33 days at 80% pay | Medium-High |
Netherlands | 1-2 months | No, but restrictions on fixed-term contracts | Medium | Up to 2 years at 70% pay | Medium |
Belgium | No trial period | No | Medium | 1 month at full pay | Medium |
Sweden | 6 months | No, but restrictions on fixed-term contracts | Medium | 2 weeks at 80% pay | Medium-High |
Austria | 1 month | No | Medium | 6-12 weeks at full pay | Medium |
Denmark | 3 months | No | Low | 30 days at full pay | High |
Obtain A Company Registration Number
Ready to get your company registration number in Bulgaria? The process is refreshingly straightforward, and we're excited to walk you through the key steps.
Steps to Register with the Commercial Register
Choose and verify your unique company name
Appoint a representative agent
Open a corporate bank account
Deposit minimum capital (just 2 BGN for OOD)
Prepare the required registration documents
Submit everything to the Commercial Register
Required Documents
The documents you'll need to prepare include:
Registration form for the Commercial Register
Articles of incorporation
General meeting documents
Notarized signature specimen from the company representative
Bank statement showing the deposited capital
Company name certificate
Copies of LLC owners' IDs
Declaration of beneficial ownership
It's recommended to get your documents notarized first, as it can save you a lot of time later.
Processing Time and Fees
If your documents are properly prepared, you can have your registration completed in just 3-4 working days. The basic registration fee is BGN 55 (€28) for electronic submissions and BGN 110 (€56) for paper applications.
To make the process even easier, you can handle the entire registration through eBranch, without the need to establish a local entity. Businesses have completed their registration in record time using this method. The total cost typically ranges between €800-1,500, including all registration fees, notary charges, and legal assistance.
If you're registering a branch of a foreign company, you'll need to submit additional documentation, and the processing time might extend to about 12 working days.
Remember, while the requirements might seem detailed, they are quite manageable. Companies have set up their Bulgarian presence entirely through virtual office solutions, without the need for a PEO. The key is having all your documents prepared correctly from the start.
Register With The National Revenue Agency
Now that the commercial registration is sorted, it's time to move on to the next step – getting set up with the National Revenue Agency (NRA)! This process can be a breeze, even without a local entity, and following the right steps will ensure everything goes smoothly.
Employer Registration Process
Here’s the essential roadmap for registering with the NRA:
Submit notification within 7 days of hiring your first employee: This is the first step in staying compliant with Bulgarian labor laws.
Provide company registration documents: Make sure all commercial registration documents are ready for submission.
Present tax registration certificate with apostille: This is key to proving the company’s tax standing. Remember to get it apostilled!
Include VAT identification documents (if applicable): If VAT registration applies to your business, ensure the relevant documents are provided.
Complete two applications for service number assignment: These applications are necessary for obtaining your company’s unique identifiers with the NRA.
The easiest way to handle payments is through a Bulgarian bank account – it simplifies the entire process!
Obtaining a Bulstat Number
A BULSTAT number is your Bulgarian business identity card. As a foreign business owner, the following documents are required:
Current Commercial Register extract (with apostille)
Company representation documents
Registered office confirmation
BGN 40 registration fee for foreign entities
BGN 15 fee for foreign individuals
Tax Registration Requirements
The NRA assigns different identification numbers based on the business structure:
For Companies:
Unified Identification Code (UIC) – 9 digits
NRA Official Number – starts with 307
VAT number (if applicable) – starts with "BG"
For Individuals:
Personal Identification Number (PIN) – 10 digits
Foreign Individual Number from the NRA Registry
Submit all documents within 7 working days of starting business activities. The NRA typically processes applications within a week – it’s quick!
Using eBranch allows tracking your application status in real time. This digital approach makes the process much easier and faster!
The NRA keeps detailed registers of all obligated persons, and they handle most registrations automatically based on Commercial Register data. However, foreign entities will need additional identifying documents.
Remember the social security obligations? As an employer, contributions for employees will need to be calculated and paid. The system works efficiently once everything is set up, especially with a virtual office solution.
Always keep apostilled documents handy – they’ll be needed at various stages of the process. It’s also wise to get extra copies certified while you’re at it.
With these steps, registration will be completed and compliance ensured. Let me know if more assistance is needed with navigating this process!
Set Up Social Security And Health Insurance
The process of setting up social security and health insurance for employees in Bulgaria involves registering with a few key organizations:
Registering with the National Social Security Institute (NSSI)
To register with the NSSI, you'll need to provide the following:
Form E101 for applicable legislation
Employment contracts
Company registration documents
Representative's identification
Using eBranch can make this registration process much smoother and faster.
Health Insurance Fund Registration
To register with the National Health Insurance Fund (NHIF), you'll first need to register your company. Then, each employee will need:
A registration certificate
Selection of a general practitioner
Health insurance cards
This can be handled through a virtual office setup, without the need for a local entity.
Contribution Rates and Deadlines
The social security and health insurance contribution rates are as follows:
Contribution Type | Total Rate | Employer Share | Employee Share |
Social Security | 19.30% | 10.92% | 8.38% |
Health Insurance | 8.00% | 4.80% | 3.20% |
Pension Security | 5.00% | 2.80% | 2.20% |
The maximum monthly insurance income is BGN 3,750 (as of January 2024).
Important deadlines include:
Monthly contributions due by the 25th of the following month
Two social security declarations must be filed
Annual statements required by the end of February
When using eBranch, the system automatically calculates the contributions based on payroll data, eliminating the need for manual calculations.
The social security benefits cover a wide range of areas, including maternity leave and unemployment insurance. While the total contribution rate of 32.30% may seem high, it is split between the employer and the employee.
Setting up the social security and health insurance through virtual office solutions, without the need for a PEO, is a key advantage. The key is to stay organized with monthly payments and keep track of the important deadlines.
Prepare Essential Employment Documents
Now that the registration and insurance processes are sorted, let's dive into the essential employment documentation required in Bulgaria.
Employment Contracts
In Bulgaria, employment contracts must be in writing and in the Bulgarian language (though bilingual contracts are acceptable). The key elements to include are:
Parties' information (employer and employee)
Position and workplace location
Starting date and contract duration
Annual paid leave (minimum 20 days)
Notice period (same for both parties)
Remuneration details
Working hours
Internal Work Rules
Establishing internal work rules is an important step. Through a virtual office setup, you can define:
Work organization guidelines
Reporting structures
Payment procedures
Leave policies
Disciplinary procedures
It's important to make these rules available to all employees, both in digital and physical formats. This can be handled directly without the need for a PEO.
Health and Safety Policies
Ensuring a safe work environment is crucial. Your health and safety documentation should include:
Required Element | Description | Timeline |
Initial Training | Basic safety instruction | First day |
Workplace Training | Position-specific safety | Within week one |
Regular Updates | Periodic safety refreshers | Every 3-6 months |
If you have more than 50 employees, you'll need a health and safety committee. For 5-50 employees, a workgroup is sufficient. Interestingly, you can now conduct training remotely.
The key requirements include risk assessment documentation, safety instruction records, training certificates, emergency procedures, and first aid provisions. You can manage all of this through a virtual office solution, without the need for a local entity.
Workplace assessments are crucial for documenting risks, preventive measures, training schedules, and emergency protocols. These documents should be updated annually or whenever significant workplace changes occur, and the training records must be kept for at least 5 years.
Comply With Ongoing Employer Obligations
Managing ongoing employer obligations in Bulgaria might seem daunting, but with the right system in place, it's a breeze. Here’s a clear breakdown of everything that needs to be done to ensure compliance.
1. Payroll and Tax Reporting
As an employer, it's important to stay on top of payroll and tax reporting. The good news? Bulgaria has a flat income tax rate of 10%, making it simple and straightforward.
Monthly Tasks for Payroll:
Calculate gross salaries
Deduct employee contributions
Submit monthly declarations by the 25th
Transfer payments to tax authorities
Using a service like eBranch for payroll processing simplifies everything. It automatically handles calculations, saving valuable time.
2. Social Security Contributions
Social security is a key part of your employer obligations, and the best part is you can manage it without a local entity. Here’s a breakdown of the contributions:
Contribution Type | Employer Rate | Employee Rate | Total Rate |
State Social Security | 10.92% | 8.38% | 19.30% |
Health Insurance | 4.80% | 3.20% | 8.00% |
Additional Pension | 2.80% | 2.20% | 5.00% |
Maximum Monthly Income Cap:Â BGN 3,750Â (any amount above this is excluded from contributions).
Monthly Tasks:
Calculate contributions based on gross salaries.
Submit Declaration 1Â for employer contributions.
File Declaration 6Â for employee contributions.
Make payments to the NRA by the 25th of the following month.
Setting up automatic transfers through a Bulgarian bank account can save hours of work each month.
3. Annual Financial Statements
At the end of each year, companies must prepare and submit their annual financial statements. Here’s what’s needed for a complete package:
Balance Sheet
Profit and Loss Account
Notes to Financial Statements
Management Report (for certain companies)
Key Deadlines
Prepare statements by March 31st
Submit to the Commercial Register by September 30th
File tax returns by June 30th
Simplified Filings for Small Companies: If your company has net revenues of less than BGN 200,000, you can file simplified financial statements. Larger companies, on the other hand, will need to include detailed reports such as:
Detailed income breakdowns
Asset and liability reports
Cash flow statements
Equity changes documentation
Keep digital copies of all supporting documents for smoother audits and future reference.
Ongoing Compliance
In addition to payroll and financial statements, there are other ongoing obligations:
Preparing statistical reports
Updating company registers
Maintaining accounting records
Preserving documentation for at least 5 years
Conclusion
The process of establishing an employer presence in Bulgaria is well-structured and manageable, especially with the aid of modern digital tools and services. The key steps, from commercial registration to social security setup, are clearly defined, and the regulatory framework provides fixed tax rates, contribution schedules, and reporting requirements that facilitate compliance.
The availability of virtual office solutions and the ability to handle much of the process remotely remove many of the traditional barriers to market entry, making Bulgaria an appealing destination for companies seeking to expand their operations. The combination of efficient procedures and user-friendly digital platforms allows businesses to navigate the registration process efficiently and focus on growing their presence in this dynamic Eastern European market.
By signing up for a free trial of eBranch, companies can experience firsthand how simple and straightforward the Bulgarian employer registration can be, further enhancing the country's attractiveness as a destination for international expansion while maintaining full compliance with local requirements.
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