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Mercans offers complete payroll, PEO and HR services in Bulgaria

Bulgaria offers an interesting and attractive option for new businesses and foreign direct investment thanks to lower labor costs as well as low and flat corporate and income taxes. Additionally, there are no legal limits on foreign ownership or control of firms. In many respects, foreign companies are treated similarly to local companies. Particular sectors such as IT, business process outsourcing and automotives have steadily attracted foreign investment.


Doing Business in Bulgaria

There is significant support for small and medium sized businesses. While it is relatively easy to set up a new business in the country, investors often cite corruption, the difficulty in obtaining the necessary permits, administrative procedures associated with opening a business and delays as ongoing challenges.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Bulgaria is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.


Banking Hours: 9:00 am to 5:00 pm from Monday to Friday

Working Week

The standard working week is from Monday to Friday from 8:00 am - 4:00 pm

Labor Law

The Labor Code is the primary source of labor law, regulating the key elements of labor relations. The main obligations of the employer are defined in the Code including work conditions, payment of wages as well as social security contributions.

Main Industries

Metallurgy, electricity, electronics, machinery and equipment, shipbuilding

GDP Growth


Dates & Numbers


Official State Name

the Republic of Bulgaria


6.95 million



Major Languages



Bulgarian Lev (BGN)

Internet Domain


International Dialing Code


Sofia, BG
5:10 am, June 25, 2024
temperature icon 17°C
overcast clouds
Humidity 91 %
Wind Gust: 3 mph


The minimum wage applies to everyone regardless of age, industry or experience. The minimum wage is regulated by the government on an annual basis.

It is acceptable to provide employees with online payslips


Payroll reports must be kept for 50 years


Employees receive paid annual leave of 20 days

Annual Leave

Employees receive paid sick leave of 3 days. Any leave without a doctor’s note is unpaid.

Sick Leave

Employees are entitled to 2 years of paid maternity leave and 15 days of paid paternity leave.

Maternity & Paternity Leave

Termination of an employee requires notice of 1 - 3 months

Employee Termination

This is not mandated by law

13th month salary

4.06 BGN per hour

Minimum Wage

Overtime payment of 50% for regular days worked, 75% for work on weekends,100% for work completed on national holidays.


There is generally no statutory severance pay.

Severance Pay


Tax and Social Security

Individuals are taxed based on their tax residency status. National insurance contributions include social security and health insurance contributions.


Bulgarian tax residents are taxed on their worldwide income and non-residents are taxed in Bulgaria on Bulgarian-source income.


Corporate Income Tax


Personal Income Tax


Sales Tax



Social Security

The Bulgarian social security system provides protection against general disease, work-related accidents, occupational disease, maternity, unemployment, old age and death. Generally, all employees are automatically compulsorily insured.


Social Security Rate


Social Security Rate for Employers


Social Security Rate for Employees


Employment Law

In general, the Bulgarian Labor Code applies to all employment contracts in Bulgaria unless another law or international treaty applies. Parties are generally permitted to elect the jurisdiction of law that they wish to apply.

Employment Agreement

An employment agreement must be in writing in order to be valid and enforceable. Any amendments to the agreement, by necessity, must be in writing. Employment agreements contain the main particulars of parties including specifications on the place of work, nature of work, date of the conclusion of the contract, basic and other types of leave, notice periods and more.

Working condition

Maximum permitted working times are prescribed by law. Workers are also entitled to daily breaks. The Labor Code specifies the methods for determining reduced working time, night work or other types of working time, some of which may result in a different wage calculation.


The basic leave period may not be shorter than 20 working days. Depending on the type of leave requested, this may require the employer’s consent, such as unpaid vacation leave.

Employment termination

Heavily regulated by the Labor Code, termination of employment may be done by mutual consent, through a lapse of time, the fulfillment of work. Termination of employment may also be done with or without notice by either employer or employee.


1 month

Minimum notice period for terminating an employee


16 days

Total number of public holidays



Working hours per week


20 days

Total number of days for Compassionate & Bereavement Leave



The application process for a foreign worker from the EU is less complicated than the worker from outside the EU. Foreign persons may choose to reside for a short period, long-term or permanently.


Residency permits

As a rule, work permits are issued for a period of one year but may be extended. There are a number of exemptions to holding a work permit including:

  • foreign workers with permanent residence in Bulgaria
  • representatives of foreign companies which are members of the Bulgarian Chamber of Commerce and Industry
  • no work permit is required for any posting that does not go beyond three months
  • members of the executive board, managing directors and permanent representatives of companies or branch offices of foreign companies.

Work Permit Validity

1 – 3 years

Required Documents

A copy of the first page of the individual’s passport

A passport photo in color

Proof of the reason for travel, such as the work permit

Proof of medical insurance

Evidence of sufficient financial means

Proof of accommodation in Bulgaria, such as a lease agreement

A police background check

Work experience

Aged 45 years or below.

Compliant, reliable, error-free and touchless payroll in Bulgaria

Build the best team and hire top talent compliantly in Bulgaria. Get in touch with Bulgaria payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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