BGOperating in Bulgaria
Payroll, accounting, employment, immigration, entity setup, and corporate compliance managed locally through a single international coordination model.
Request a country assessmentThe regulatory landscape
Bulgaria applies a flat 10% corporate income tax rate, unchanged since 2007 and the lowest headline rate in the European Union, alongside a 20% standard VAT rate and employer social security contributions of 18.92% to 19.62% of gross salary depending on activity-based work-injury risk. Dividends distributed from 2026 profit are subject to 5% withholding tax, though this rate held only because a proposed increase to 10% lapsed when early parliamentary elections forced the 2025 budget to be extended into 2026. An EOOD or OOD can be formed with nominal share capital of €1 (redenominated from BGN 2); an AD requires €25,000, of which at least 25% must be paid up at formation.
The structural detail every company operating in Bulgaria must actively manage in 2026 is the mechanics of the euro changeover itself. All contracts, payroll systems, statutory accounts, bank balances and outstanding liabilities were automatically converted to euro at the fixed BGN 1.95583 rate on 1 January 2026, with salary conversions required to round in the employee's favour. Existing contracts did not need to be re-signed, but every converted figure — payroll runs, supplier agreements, statutory ledgers — needs independent verification against the fixed rate rather than an assumption that automated conversion was applied correctly. Compounding this, non-financial-sector businesses must display prices in both BGN and euro, in matching font, size and colour, for a full year running from 8 August 2025 to 8 August 2026 — a live, dated obligation still in force through most of 2026.
Official language
Bulgarian
Legal forms
OOD · EOOD · AD
Corporate tax rate
10% flat (lowest in the EU)
Currency
EUR (adopted 1 January 2026, replacing BGN at the fixed rate €1 = BGN 1.95583)
Employer social security
18.92%–19.62% of gross salary (14.12% pension/social + 4.8% health + 0.4–1.1% activity-based work-injury), capped at €2,300/month gross from 1 August 2026
Dividend tax (withholding)
5% (2026; a proposed rise to 10% was not enacted due to early elections)
Minimum share capital
EOOD/OOD: €1 (nominal, redenominated from BGN 2) · AD: €25,000 (BGN 50,000; ≥25% paid up at formation)
VAT
20% standard · 9% reduced (accommodation, e-publications, select baby/infant products)
Integrated services in Bulgaria
Each service is delivered as part of an integrated service model, coordinated across functions under a single point of accountability. Clients engage one team, not a coordination layer between independent providers.
Accounting & Tax Compliance
Statutory accounts under Bulgarian National Accounting Standards or IFRS, VAT returns, and corporate tax filings, including verification of euro-redenominated ledgers against the fixed BGN 1.95583 conversion rate.
Explore Accounting & Tax CompliancePayroll & Workforce Management
Full-cycle Bulgarian payroll in euro, including social security and health insurance contributions, minimum wage compliance, and verified conversion of pre-2026 lev-denominated contracts.
Explore Payroll & Workforce ManagementCompany Formation & Entity Setup
EOOD, OOD and AD incorporation, Commercial Register filing via the Registry Agency, and post-formation tax and social security registration.
Explore Company Formation & Entity SetupWorkforce Mobility
EU Blue Card and work permit coordination for non-EU hires, including salary-threshold checks against Bulgaria's average-wage-linked minimum.
Explore Workforce MobilityClient profiles in Bulgaria
HR & Employment Advisory
Multinationals establishing or restructuring Bulgarian operations to access the EU's lowest flat corporate tax rate
Company Formation & Entity Setup
Companies entering Bulgaria for the first time, requiring entity setup and euro-compliant payroll from the first hire
Workforce Mobility
Companies with pre-2026 lev-denominated contracts and payroll requiring independently verified redenomination
Payroll & Workforce Management
Companies already operating in Bulgaria consolidating fragmented HR, payroll and accounting providers under a single governance layer
At the center of your HR operations
What clients say about our services in Bulgaria
Our payroll provider told us the euro conversion was "automatic" and left it there. When we asked for the reconciliation showing every salary converted at the fixed rate with correct rounding, it didn't exist — we had to have it rebuilt from the lev-denominated originals.
HR Director, Manufacturing Group — Bulgarian OperationsInsights on Bulgaria
Selected articles on regulatory developments and operational frameworks relevant to companies in Bulgaria.
Payroll, contracts and statutory books all have to reconcile against the fixed BGN 1.95583 conversion rate. What should be verified independently rather than assumed converted.
Read articleA proposal to raise dividend withholding from 5% to 10% lapsed rather than being rejected outright. What that signals for future budget cycles.
Read articleDual lev and euro display obligations remain in force until August 2026 for goods, services and payroll-adjacent documentation. What still has to show both figures.
Read articleFrequently asked questions
Questions raised most often by companies entering or operating in Bulgaria.
What services does HTLC Network provide in Bulgaria?
HTLC Network provides Payroll & Workforce Management, Accounting & Tax Compliance, HR & Employment Advisory, Company Formation & Entity Setup, and Workforce Mobility services in Bulgaria through a coordinated international service model.
Is Bulgaria a cost-effective country for hiring employees in Europe?
Many international companies consider Bulgaria for its relatively competitive labour costs and corporate tax environment compared with several Western European markets.
Do I need a Bulgarian company to hire local employees?
Not necessarily. Payroll registration, labour law compliance, tax obligations and potential permanent establishment exposure should be assessed before hiring.
What payroll obligations apply when employing staff in Bulgaria?
An employer must generally manage income tax withholding, social security contributions, employment registration requirements and payroll reporting obligations.
Is Bulgaria still using the lev?
No. Bulgaria adopted the euro on 1 January 2026, at the fixed and irrevocable rate of €1 = BGN 1.95583. Following a one-month dual-circulation period, the lev ceased to be legal tender on 1 February 2026, though lev banknotes and coins remain exchangeable for euro at the Bulgarian National Bank indefinitely, and at commercial banks free of charge until 30 June 2026.
How long does dual pricing remain mandatory?
Non-financial-sector businesses must display prices in both BGN and euro — in matching font, size, type and colour — from 8 August 2025 through 8 August 2026, a mandatory one-year transition period under the Act on the Introduction of the Euro.
Is the 5% dividend withholding tax rate stable?
It held for 2026 only because a proposed increase to 10% in the draft 2026 budget was not enacted, after early parliamentary elections forced the 2025 budget to be extended. Companies should not treat 5% as a settled long-term rate and should monitor the next budget cycle.
What is the minimum share capital for an OOD?
An EOOD (single-member) or OOD (multi-member) limited liability company requires only €1 in nominal share capital, redenominated from the pre-2026 BGN 2 minimum. An AD (joint-stock company) requires substantially more: €25,000 (BGN 50,000), of which at least 25% must be paid up at formation.
Talk to a Bulgaria expert
For companies structuring a market entry or consolidating an existing Bulgarian operation under a single governance model.