Logistics hub of the European Union: Bulgaria

Becoming a member of the European Union (EU) in 2007, Bulgaria is one of the countries that attracts the attention of foreign investors with its low tax rates, simple procedures in establishing a company, cheap and qualified labour force. With the advantage of free trade within the European Union countries, Bulgaria is a logistics base for many investments. A large part of Turkey’s trade with European countries is carried by road through Bulgaria. Bulgaria is very close to Turkey’s production centres such as Istanbul, Kocaeli and Bursa.

Types of Company in Bulgaria

In general terms, the company types in Bulgaria are as follows.

  • Joint Stock Company
  • Limited Company
  • Limited Company
  • Share Limited Company
  • Collective Company
  • Sole Proprietorship

Let us briefly mention Bulgaria’s most common types of companies: Limited Liability Companies and Joint Stock Companies.

Joint Stock Company (AD or EAD)

The company in AD format must be established with at least two natural and/or legal partners. However, it is also possible to establish a joint stock company in the EAD format with one partner. The minimum share capital of a joint stock company in Bulgaria is BGN 50,000 (approximately EUR 25,000).

Joint stock companies are favored for corporate prestige and to obtain more funds from the capital markets. The liability of the shareholders is limited to the capital they contribute.

Limited Company (OOD or EOOD)

A limited liability company in OOD format requires at least two natural and/or legal partners. Establishing a limited liability company in Bulgaria with one natural or legal person is also possible. This type of company is also called EOOD. The minimum capital of a limited liability company must be 2 leva (1 euro). If you are applying for a residence permit, we recommend establishing a company with a high capital.

Limited company type is generally preferred by companies that do smaller-scale business. In limited liability companies, it is also possible to prevent the other partner from selling shares to third parties (by making a provision in the company statute). Such companies’ management and accounting requirements are more straightforward than joint stock companies. The liability of the shareholders of the company is limited only to the capital they have contributed.

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Establishment of Companies in Bulgaria by Foreign Investors

In Bulgaria, there is no distinction in legal rights between companies established by foreigners and companies established by Bulgarian citizens. They carry out their activities under the same rules. There is no local partner requirement for foreigners to establish a company in Bulgaria. It is possible to establish a company with 100% foreign capital. You can also start a limited liability or joint stock company with a single natural or legal person. The company partner can also be a manager.

Foreign investors’ most preferred business entities are:

  • Limited liability companies (EOOD or OOD).
  • Joint stock companies (EAD or AD).
  • Branches.
  • Commercial representative offices.


Setting up a company in Bulgaria is quite easy. The first stage for incorporation is to determine a name for your company that has yet to be used. The national registry office must also approve your company name before starting the incorporation process.

Before incorporation to establish a company in Bulgaria;

  • The address of the company
  • Subject of activity
  • Amount of capital
  • Shareholders, managers, and representation authorities
  • It is necessary to define and draw up the company’s articles of association.


Establishing a company in Bulgaria starts with opening an account in a local bank and depositing the initial capital, followed by registration in the Commercial Register of the Registration Agency of the Ministry of Justice. The registration period is five working days for limited liability and joint stock companies and approximately two weeks for branches. When a company is registered in the Trade Register, it is given a number called a particular identification code (Bulgarian abbreviation ЕИК (EIK)). Unlike in Turkey, it is not compulsory to register with the chambers of commerce and industry to open a company in Bulgaria.

The details of the documents required to establish a company can be found in this study by the Commercial Counsellor’s Office of the Embassy of the Republic of Turkey in Sofia (Turkısh Embassy In Sofia, Offıce Of The Commercıal Counsellor):

  • After establishing a company in Bulgaria, it is crucial to carry out the following procedures:
  • Initiation of insurance procedures for company partners and managers
  • Registering a cash register and/or opening a company bank account
  • Registration of the company as a personal data administrator
  • Preparation of company invoices
  • VAT registration of the company


To employ a Turkish citizen after establishing the company in Bulgaria, at least 5 Bulgarian or EU citizens (the maximum number of third-country nationals working in SMEs should be at most 35% of Bulgarian and EU citizens) must work in the company.

Opening of Branches in Bulgaria by Foreigners

There are no obstacles for companies with foreign capital to open branches in Bulgaria. A branch is not a legal entity according to Bulgarian commercial legislation. The parent company that extends the branch is responsible for its branch in Bulgaria to the extent of its assets. The trade name of the branch consists of the title of the parent company and the suffix “branch .”However, the branch organizes its commercial books as a separate company. Moreover, the branch has its own head office and management address, directors, assets, and passive legal status. The application for opening a branch can be submitted to any Registration Agency regional representative office.

Opening of Foreign Representative Offices in Bulgaria

Foreigners may open a commercial representative office in Bulgaria. Representative offices must be registered with the Bulgarian Chamber of Commerce and Industry. Establishing a representative office occurs through the Chamber’s decision to register a commercial representative office. The database of registered commercial representative offices is published on the Bulgarian Chamber of Commerce and Industry website. These commercial representative offices are not legal entities and cannot carry out commercial activities.

Taxes in Bulgaria

Bulgaria has the lowest tax rate among EU countries, with a corporate tax rate of 10%. The tax legislation is quite simple.

Corporate tax is 10% of the annual net profit.
Dividend distribution tax 5
VAT 20%. Intra-EU shipments and exports are exempt from VAT
Personal income tax 10 percent
Employer SSI premiums 17.9

How to Obtain a VAT Code in Bulgaria?

The National Revenue Agency issues a VAT number starting with BG to the companies registered under the VAT Act. Usually, the continuation of the VAT number is the same as the Special Identification Code issued by the Registration Agency, but this is not mandatory.

Customs Duties in Bulgaria

Bulgaria directly applies the EU’s customs legislation and the Common Customs Tariff regarding customs duties. Bulgaria, which became a party to the EU-Turkey Customs Union after its EU membership, does not apply customs duties on the trade of industrial products within the scope of the Customs Union between Turkey and Bulgaria. The preferential tax rates used by the EU for Turkish agricultural products apply to agricultural products. From the EU TARIC system, you can access the legislation on the conditions and documents required for each product to be imported into the EU and customs duties by searching by product HS code.

According to the Bulgarian Customs regime, VAT exemption is provided for one month for the products imported by a company resident in Bulgaria to be exported to another country within the scope of transit trade. If exports are not realized within one month, the VAT paid at the import stage is refunded after the export.

Investment Incentives and Supports in Bulgaria

The Bulgarian Investments Agency, under the Ministry of Economy, coordinates investment incentives in Bulgaria. If your company’s activities or investments are included in the definitions of the Bulgarian Investment Incentive Law, it is possible to benefit from many incentives and supports.

Within the framework of the incentive law, investments are classified into three groups Class A, Class B, and Priority Investment Projects. Incentives for each investment class are different. We can list the support provided to all three types of investments as follows:

Refund of insurance premiums paid by the employer for newly employed personnel (for a maximum of two years)
Appointment of an officer by the Bulgarian Investment Agency to follow the administrative affairs of the investor with the public
Financial support for vocational training of employees within the scope of an investment project
The right to purchase publicly owned real estate without being subject to public procurement regulations
Financial support for the construction of the infrastructure up to the land where the investment is made
Speeding up administrative procedures

The Bulgarian Value Added Tax Law provides the opportunity to postpone the VAT debt paid for machinery, devices, and equipment imported for investment purposes for two years. To benefit from this tax relief, the criteria that the investor must meet in general are as follows:

Certification that the investor has sufficient financial resources for the project
Employment of at least 20 people
Investing at least 2.5 million Euros
Completing the investment project within a maximum of 2 years
Having the investment project approved by the Bulgarian Ministry of Finance
No tax or insurance debts to the Bulgarian state

Again, according to the Bulgarian Corporate Tax Law, when the unemployment rate exceeds the average unemployment rate by 25% when an investment or additional investment is made within the municipality’s boundaries, an exemption from corporate tax is made provided for half the investment size. It is possible to benefit from this right for four years.

How Can Company Owners Obtain a Residence Permit in Bulgaria?

Establishing a company is one of the fastest ways to obtain a residence permit in Bulgaria. A long-term visa (Type D) is required for a foreign national to enter Bulgaria and apply for a residence permit. This visa is valid for six months and allows the holder to reside in Bulgaria for up to 180 days. For long-term (D-type) visa applications, individuals must apply to the Bulgarian consulates in person by hand-delivering their files. For residence permit applications to be made through the company, the documents of the company existing in Bulgaria and the documents required to be prepared from Turkey must be submitted in a complete manner. After the company is established, the partners (owners) of the company can obtain a residence permit for three months, six months, or 12 months at the discretion of the Bulgarian Immigration Department.

In addition, an investor with a Class B, Class A, or Priority Investment Project certificate can obtain a permanent residence permit in Bulgaria. Shareholders holding at least 50 percent of the shares in the company, managers and representatives registered in the Commercial Register in the name of the company, and employees employed in an essential function of the investment are eligible for a permanent residence permit.

Most Frequently Asked Questions About Starting A Company in Bulgaria

Do I need to come to Bulgaria to set up a company in Bulgaria?

No, you do not need to be in Bulgaria. You do not need to be in Bulgaria or have a residence permit. You can also set up your company by giving a power of attorney.

I have established a company in Bulgaria. Will it be closed if it does not operate?

No, it does not. Your company will remain open if it pays insurance and tax expenses.

Can I establish a sole proprietorship in Bulgaria?

No, you cannot. Foreigners cannot establish a sole proprietorship in Bulgaria. They can establish a limited liability company or a joint stock company.

Is there a double taxation avoidance agreement between Bulgaria and Turkey?

Yes, there is.

Can the company I set up in Bulgaria buy real estate?

Yes. There are no restrictions. This is one of the important advantages of setting up a company in Bulgaria.

Is Bulgaria included in the Schengen area?

No, it is not.

What is the minimum wage in Bulgaria?

As of 2022, it is 363 Eur gross in Bulgaria.

Can you tell us about the investment advantages of Bulgaria?

The logistics sector in Bulgaria accounts for 5% of the country’s GDP. More than 18 thousand companies operate in this sector and employ more than 150 thousand people. Bulgaria is one of the important logistics bases of the Balkans due to its advantages, such as being on the Black Sea coast, having the Danube River, being a member of the European Union, etc.

Electricity prices are below the European average, and warehouse, logistics, and office rental costs are among the region’s lowest. Labor costs in Bulgaria are among the lowest in Central and Eastern Europe. The labor quality/cost ratio is desirable.

EU funds support Bulgaria. Infrastructure projects especially receive substantial EU funding. Foreign companies established in Bulgaria can also benefit from these EU funds.

Are taxes high in Bulgaria?

After Hungary, Bulgaria has the lowest corporate tax rate in the European Union. Corporate and income tax is 10%.

Is EUR used in Bulgaria?

The currency used in daily life in Bulgaria is the Leva (BGN), which has been pegged to the EUR for ten years (1 Leva = 0,51128 EUR). In addition, a free foreign exchange regime applies. The currency is convertible. It can be converted into other countries currencies.

Can my company in Bulgaria buy land?

Yes. Foreigners cannot buy land personally, but when they establish a company, their company can purchase land.

Can a company be established in Bulgaria and bring a car to Turkey?

It is possible to establish a company in Bulgaria and buy a vehicle for the company and bring it to Turkey. Bulgarian vehicle prices are very advantageous compared to Turkey. 0 or 2nd hand-purchased vehicles registered in the company’s name can be used in Turkey by the company partner, company employee, or first-degree relative of the company partner for three months without changing the license plate (with foreign license plate). After the 3-month period expires, the vehicle must exit Turkey. At the end of this period, it is possible to change the vehicle and come to Turkey with the vehicle again.

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Establishing Business in Bulgaria

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As MHR & Partners, we are directly and indirectly active in more than 20 countries worldwide. We aim to operate with 10 branches in 100 countries in 10 years. We offer you end-to-end consultancy and support services in establishing a company, obtaining a residence permit, and in all operational processes abroad, primarily financial issues.

Our priority is to provide consultancy services to companies with a growth vision and business strategy abroad. We attach particular importance to the uninterrupted continuation of our services with the assurance of MHR & Partners (Mühür YMM AŞ) after the company establishment stages. Our core mission is to be a safe harbor and provide sustainable services.

We want to be a bridge to our customers’ business plans for growth and development, even in the most remote parts of the world.

To establish a business in Bulgaria, you can contact Sworn-in Certified Public Accountant Mehmet Akif Özmen directly (+90 542 830 3408 or akif.ozmen@mhrpartner.com). If you wish, you can reserve a meeting by filling out the form below.

Where Should I Start to Do Business in Bulgaria?

First of all, you should create a business plan. For this purpose, visiting Romania, making business contacts, and establishing connections with local partner is very useful.

It is imperative to determine your vision, the sector in which you will operate, and your business details to clarify your goals and objectives and to extract your investment budget and capital in your business plan for at least three years.

The next step after the research and planning phase is to take action. The lowest risk and cost strategy in an unfamiliar market is to proceed through partners or consultants who know the Bulgarian market well.

As MHR & Partners, we established our own company in Germany and opened a physical office in Mannheim. Germany serves as the focal point for our global operations. As an end-to-end consultancy service provider with local partners in the Netherlands, the UK, Belgium, Romania, Montenegro and Bulgaria, we help you set up a business from scratch safely and quickly, as well as manage all the processes you’ll need once it’s established.

You can contact Sworn-in Certified Public Accountant Mehmet Akif Özmen directly (+90 542 830 3408 or akif.ozmen@mhrpartner.com) to set up a business in Bulgaria.

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