EU Freedom of Establishment in Bulgaria

As an EU member state, Bulgaria fully respects the freedom of establishment guaranteed by the Treaty on the Functioning of the European Union. This means EU citizens can start and operate a business in Bulgaria on the same terms as Bulgarian nationals, with no additional permits or restrictions.

For EU citizens considering the Troyan area or the Lovech region, this guide covers the practical steps and advantages.

Advantages for EU Citizens

No Work Permit Required

Unlike non-EU citizens, you do not need any work permit or special authorization to be self-employed or to manage a company in Bulgaria.

Simplified Residence Registration

EU citizens can reside in Bulgaria for up to 3 months without any formalities. For stays longer than 3 months, you simply register for a certificate of residence at the local Migration Directorate. Requirements are straightforward:

• Valid EU passport or national ID card
• Proof of economic activity (company registration, employment contract, or freelance registration)
• Health insurance coverage
• Proof of accommodation

The certificate is issued quickly and is valid for 5 years.

Equal Treatment

You enjoy the same rights as Bulgarian citizens regarding:

• Company ownership and management
• Access to bank accounts and financial services
• Property ownership (with certain restrictions on agricultural land)
• Access to courts and legal remedies
• Tax treatment

Step-by-Step: Starting Your Business

Step 1: Obtain a Bulgarian Personal Identification Number

Before registering a company, you need a Bulgarian personal number for foreigners (LNCh). This is obtained from the Migration Directorate and serves as your identification number for all official purposes.

Alternatively, some EU citizens obtain an EGN (the standard Bulgarian personal number) if they register permanent residence.

Step 2: Choose Your Business Structure

The most common options for EU citizens:

• EOOD (single-member LLC): Best for solo entrepreneurs
• OOD (multi-member LLC): Ideal for partnerships
• ET (sole trader): Simplest structure for small-scale activities
• Freelancer (svobodna profesiya): For professional services

Step 3: Register Your Company

The process is identical to what Bulgarian citizens follow:

1. Choose a unique company name
2. Draft articles of association
3. Deposit minimum capital (2 BGN for an EOOD/OOD)
4. File the registration application with the Trade Register
5. Receive your EIK (company identification number) within 3-5 business days

Step 4: Register for Tax Purposes

After company registration:

• Automatic registration with the National Revenue Agency (NRA)
• Register as a self-insured person for social security
• Consider VAT registration (mandatory above 166,000 BGN turnover)

Step 5: Open a Business Bank Account

EU citizens generally find it easier to open Bulgarian bank accounts than non-EU citizens. Bring your:

• EU passport or national ID
• Company Trade Register certificate
• Articles of association
• Proof of address in Bulgaria

Tax Benefits

Bulgaria offers some of the lowest tax rates in the EU:

Tax Type	Rate
Corporate income tax	10%
Personal income tax	10%
Dividend tax	5%
Standard VAT	20%
Reduced VAT (tourism)	9%

Tax Residency Considerations

If you spend more than 183 days per year in Bulgaria or establish your center of vital interests here, you become a Bulgarian tax resident. This means:

• Your worldwide income is taxable in Bulgaria at 10%
• You can benefit from double taxation treaties
• You may need to formally exit tax residency in your home country

Important: Always consult a tax advisor in both countries to avoid unintended double taxation.

Social Security for EU Citizens

EU social security coordination rules (Regulation EC 883/2004) determine which country you pay social security in. The general rules are:

• Working in one country: Pay social security there
• Working in multiple countries: Complex rules apply, usually the country of residence
• Self-employed in Bulgaria only: Pay Bulgarian social security
• Posted workers: May continue paying in the sending country for up to 24 months

Obtain an A1 certificate if you need to prove which country’s social security system applies to you.

Property Ownership

EU citizens can freely purchase:

• Apartments and houses
• Commercial property
• Building plots

Restriction: EU citizens cannot directly purchase agricultural land or forest land unless they have been resident in Bulgaria for more than 5 years. This restriction is scheduled to be reviewed periodically.

Healthcare Access

With the European Health Insurance Card (EHIC), you have access to emergency healthcare in Bulgaria. For long-term residence, you should either:

• Register in the Bulgarian health insurance system (NHIF)
• Maintain private health insurance

Bulgarian health insurance contributions are affordable at 8% of your insurable income.

Practical Tips for EU Entrepreneurs

• Language: While English is increasingly common in cities, official documents and procedures are in Bulgarian. A local attorney or translator is valuable
• Banking: Bulgarian banks may require documents in Bulgarian. Bring translated copies
• Accounting: Hire a Bulgarian accountant from the start
• Networking: Join expat business communities online and locally
• Location: The Lovech region offers lower costs than Sofia while maintaining good infrastructure

Start Your Bulgarian Business

Our law office in Troyan specializes in helping EU citizens establish their businesses in Bulgaria. We handle everything from initial registration to ongoing legal compliance.

Contact Attorney Biser Dimov to begin your business journey in Bulgaria.