Doing Business in Bulgaria

The first thing that draws a businessman’s attention to Bulgaria is the low tax rates – 10% for corporate tax and 5% for dividends.  In addition, you can set a LLC company with only 2 BGN (1€). These might be an ideal environment for someone to do business, but doing business in any foreign country means also to have considered the labour issues.

Social Security Contributions

The total national insurance contribution rate (social security and health insurance) is 32.7% to 33.4%, of which 18.92% to 19.62% is payable by the employer and 13.78% is payable by the employee. The range is due to the rate of contributions payable to the ‘Accident at Work and Occupational Illness Fund’, which is due only by the employer and can vary from 0.4% to 1.1% depending on one’s economic activity. For example, the rate for the administration and services sector is 0.5%.  The maximum monthly insurance base is limited to BGN 3,000. Some jobs categories (hazardous occupations) have higher contributions.

Salaries

The minimum monthly salary in Bulgaria is BGN 650 (2021/22) that is about 332.25€. The gross salary has a regulated annually raise of 0,6%.  After the deduction of social security contribution, the income is taxed with a personal taxation of 10%

One last thing to be considered is the qualifications of the employees. In Bulgaria, the percentage of English-speaking population is low, so in order to attract the English-speaking employees, a company has to give a salary over 800€. In that case, the payroll cost in Bulgaria could be higher than in a country that English language is spoken more widely.

Conclusion

The truth is that more and more foreign investors choose Bulgaria for doing business. The political and business stability, the strategic geographic location and the direct access to global markets (EU, EFTA, Russia, Middle East) have lead the country to a fast economic growth,