Updates Regarding AD, OOD, and EOOD Following Bulgaria’s Adoption of the Euro

With the euro officially becoming Bulgaria’s national currency, legislators have amended the Commercial Law to address the revaluation of company capital. These legal updates are crucial for all entities registered under Bulgarian law and require companies to update their foundational documents and capital structures to reflect the new currency.

The changes mandate that all companies with capital previously denominated in leva must convert it into euros at the official exchange rate set by the Bulgarian National Bank. This requirement covers joint-stock companies (AD), limited liability companies (OOD), limited partnerships, and general partnerships. The law allows for an automatic conversion of capital value, rounding to two decimal places, and provides mechanisms for any necessary adjustments.

Companies are also required to record the revised capital amount in the Commercial Register and prepare updated articles of association, memoranda, or contracts. There is a transition period until December 31, 2026, during which these amendments must be completed to ensure clarity and legal security for creditors, partners, and government agencies.

Limited liability companies must submit a certified copy of their updated articles of association reflecting the new capital and share distribution to the Commercial Register within 12 months of the euro’s introduction (by January 1, 2026). This step should coincide with the next application for register changes. The proportion of shares must remain consistent, and if up to 5% capital adjustment is needed, approval from the general meeting with a three-quarters majority and a new agreement will be required.

For example, if an LLC holds BGN 100 in capital (equivalent to EUR 51.13):

• One approach is to set each share at EUR 0.01, resulting in 5,113 shares.
• Alternatively, the company could opt for 10 shares valued at EUR 5.11 each, bringing the capital to EUR 51.10, a permitted reduction of under 5%.
• Another possibility is rounding capital up to EUR 52, adjusting share values as needed according to partners’ stakes.
• Lastly, capital might be reduced to EUR 50, also within the allowable 5%, distributed among shares and partners accordingly.

If you need assistance, our office can guide you through this conversion by preparing all required documentation and registering your company’s capital changes with the Registry Agency.

For inquiries, please contact us.

Digital Nomads Granted Residency in Bulgaria

Recent Amendments to the Foreigners in Bulgaria Act

Amendments to Trade Representative Office Residency Permits

The process for obtaining Bulgarian residency through the establishment of a Trade Representative Office (TRO) has been updated to ensure greater transparency and prevent abuse. These amendments place stricter requirements on applicants, focusing on legitimate commercial activities as the basis for residency.

Key Requirements for TRO Residency Permits

• Tax Compliance and Turnover: The foreign company must demonstrate tax compliance and show an annual turnover of at least BGN 100,000 (or its equivalent in foreign currency at the official Bulgarian National Bank exchange rate) for each of the two years prior to registering the trade representative office.
• Documentation: Applicants must provide a certificate of good standing for the foreign entity. This certificate must be issued no earlier than six months before application and be valid for six months, according to the relevant national legislation.
• Certification Process: The Bulgarian Chamber of Commerce and Industry certifies these requirements based on official documents submitted by the foreign company from its country of registration.
• Limitations: A maximum of two representatives per foreign company may obtain residence permits on this basis.
• Extension Requests: When extending a residence permit, the representative must declare the activities performed during the previous period and provide evidence of ongoing operations, such as office space, business actions, or relationships with Bulgarian partners.
• Notification Obligations: Any changes in the company’s registration circumstances must be declared in writing to the Bulgarian Chamber of Commerce and Industry within seven days. The Chamber will notify the Migration Directorate accordingly.
• Administrative Oversight: If a trade representation is found to be non-compliant, authorities will inform the Chamber for possible deletion from the registry. The appropriate state authorities will also be notified of such deletions.

Long-term residence permits in Bulgaria will also be issued to the so-called. Digital nomads who hold a long-stay visa with a validity of up to six months and a right of residence of up to 180 days. This is a result of recent changes to Bulgaria’s Law on Foreigners, approved by Parliament.

A “digital nomad” is a foreigner employed under an employment contract by an employer registered, residing or established outside an European Member State and who provides remote services using information technology.

If you want information how to apply for a digital nomad visa in Bulgaria contact us.

Other amendments concern one of the most popular ways of obtaining Bulgarian residency permit – TRO – establishing trade representative office. The new requirements are aiming at reducing the possibility of fraud.

Amendments to Trade Representative Office Residency Permits

Recent changes also address the process for obtaining Bulgarian residency through the establishment of a trade representative office (TRO). These amendments introduce stricter requirements, designed to minimize potential abuse and enhance transparency. The new regulations focus on improving compliance and ensuring that only legitimate commercial activities qualify for residency status under this popular route.

Requirements for Trade Representative Office Residency Permits

To apply for a long-stay visa as a representative of a foreign commercial company in Bulgaria, applicants need to provide specific documents and fulfill designated compliance requirements.

• Tax Compliance and Turnover: The foreign company must provide documentation demonstrating tax compliance and an annual turnover of at least BGN 100,000 (or equivalent in foreign currency, calculated at the official exchange rate of the Bulgarian National Bank valid on the date of the registration documents’ acceptance). This is required for both of the two years immediately before the registration of the trade representative office.
• Certificate of Good Standing: The company must present a certificate of good standing, issued no earlier than six months prior and valid for six months from its date of issuance by the competent registration authority in accordance with national legislation.
• Certification by the Bulgarian Chamber of Commerce and Industry:
• Limit on Representatives: Up to two representatives of the foreign company may obtain a residence permit on this basis.
• Extension of Residency: When applying to extend the residence period, the BCCI will issue a new certificate after the commercial representative declares the activities performed during the previous residency period and outlines the program of activities for the representative office.
• Evidence of Commercial Activities: Applicants must provide proof of office presence, representative actions, and/or relationships with Bulgarian partners. A valid certificate of good standing (within six months) is required.
• If a company’s circumstances change, the foreign entity must submit a new certificate of good standing—issued within the past six months—within 30 days.  All modifications are required to be submitted in writing to the BCCI within seven days, after which the BCCI will promptly notify the Migration Directorate.
• Legal Compliance and Oversight: If there is evidence that the trade representation does not meet legal requirements, the competent authorities will inform the BCCI, which will initiate the process for deletion of the trade representation.

Procedures for Obtaining Long-Term Residence Permits

• Submission of Documentation: Within seven days of entering Bulgaria with a long-term residence visa (valid for up to six months and permitting residence up to 180 days), the employer, or an authorized representative, must accompany the foreigner to the Migration Directorate or to the relevant Migration Department, Sector, or Group at the Regional Directorate of the Ministry of Interior.
• Required Documents: The application must include a copy of the foreigner’s passport (specifically the page with the visa) and valid medical insurance covering at least three months within Bulgaria, effective until the long-term residence permit for seasonal work is issued.
• Refusal of Permit: The issuance or extension of a residence period is denied if it is determined that the employer’s business has been established, or conducts activities, primarily to facilitate the entry and residence of foreigners. In such cases, the Migration Directorate refers the matter to the State Agency for National Security and the prosecutorial authorities.

Child Removal Ban Procedures

The District Court located at the child’s current address initiates proceedings based on a request from a parent, guardian, or trustee. This request seeks the imposition of a ban on the removal of a child from Bulgaria who is at risk and whose habitual residence is within the Republic of Bulgaria. The parliament has voted on these provisions to safeguard the interests and welfare of children in such circumstances.

Procedures and Requirements for Foreigners’ Residence in Bulgaria. Initial Declaration and Address Registration

Upon entry into Bulgaria, foreigners must declare the purpose of their stay and, within three days, must provide written notice of their residential address. This is done by completing an official address card as approved by the Minister of Interior, except for those entering as part of organized tourism. These requirements are based on recent legislative amendments.

Visa Policies and Notifications

A visa with limited territorial validity may be issued in accordance with Regulation (EC) No 810/2009. When these visas are issued at external borders, the State Agency for National Security is immediately notified as required by parliament.

Educational Documentation for Long-Term Visas

After entering Bulgaria with a long-term residence visa, applicants must submit a certificate from the National Center for Information and Documentation, verifying the recognition of any higher education obtained abroad. If the certificate is in the Register of Academic Recognition, just provide its number and issue date—no attachment is needed.  The same procedure applies when applying for a long-stay visa.

Long-Term Residence Permits

Foreigners who hold a long-term residence visa and are accepted as postgraduate students in Bulgaria may obtain a long-term residence permit valid for up to one year. Additionally, a long-term residence permit may be issued if the applicant demonstrates an average annual income of at least 50 times the minimum monthly wage, as defined by Bulgarian law for the previous calendar year. The calculation is based on the gross income.

Schengen Area Equivalency

It is stipulated that the stay of third-country nationals in Bulgaria counts as stay within the Schengen area. A standard rule regarding duration of stay is implemented as specified by the Schengen Borders Code.

Family Reunification for EU Blue Card Holders

If a holder of an EU Blue Card issued by another Member State relocates to Bulgaria and their family has already reunited in that other Member State, family members are permitted to accompany or join them in Bulgaria. If an individual’s residence permit expires prior to a decision on their application, a 90-day long-term residence permit will be issued.

Identity Card Validity Periods

Identity cards for Bulgarian citizens aged 14 to 18 are valid for four years. Validity is ten years for individuals 18 and older.  Citizens aged 70 and above are eligible for identity cards valid for thirty years, as established by the National Assembly.

Self employment

 Stefanova law offices can advice you about the possibilities of self-employment and perform the registration procedure.

In order to register in Bulgaria as self-employed you are required to comply with the requirements laid down in the Commercial Act or BULSTAT register Act. Registrations are currently handled by the Registration Agency.

Who can register as self-employed?

Craftsmen. Practicing a craft is the manufacturing of items or the provision of services by a natural person entered into the Register of Craftsmen where the respective person is not registered as a sole trader. The register is kept by 25 regional craft chambers.

Freelance professionals – accountants; consultants; auditors; lawyers/advocates/; notaries; private enforcement agents; jurors; experts court witnesses registered with the courts and the prosecution service; licensed valuators; industrial property representatives; medical practitioners; translators; architects; engineers; technical supervisors; professionals in the field of culture, education, science and the arts; insurance agents and other natural persons

As self-employed can register natural persons who simultaneously meet the following requirements:

1.  carry out professional work at their own account;
2. are not registered as sole traders;
3. are covered by the definition of self-employed professionals laid down in the Social Insurance Code.

Self-employed professionals must register with the National Revenue Agency (NRA)

Some freelance professionals (inter alia, architects, engineers carrying out investment design work and lawyers) are also required to register with the respective chamber/bar association in order to obtain a full license to practice their profession.

Farmers and tobacco growers are a particular category. They must register with the corresponding Municipal Agricultural and Forestry Service (within the Provincial Agricultural Directorate) responsible for the area.

Taxation of personal income

 The requirements for the payment of income tax in Bulgaria by natural persons are stipulated in the Act on the Income Taxation of Natural Persons. The rules apply to all local natural persons, persons who reside permanently in Bulgaria or reside in the territory of the country for more than 183 days within any 12 month period and whose center of life interest is in Bulgaria, and foreign nationals.

Local natural persons are liable for the payment of tax on income received from sources within Bulgaria and in other countries whereby foreign nationals are liable for the payment of tax on income received from sources in the Republic of Bulgaria. Any income received for work carried out in the territory of Bulgaria or for services provided in this country are subject to taxation as income received from a source in Bulgaria.

The tax rate of 10 percent was levied on the income of natural persons since 2008. There is a  possibility for tax benefits for example, the income of persons whose capacity for work is reduced by more than 50 percent, donations to healthcare organisations, as the Bulgarian Red Cross, childcare facilities, cultural institutions, young families, etc. The entitlement to a tax benefit arises at the time of filing an annual tax return.

The general income tax rate in Bulgaria, tax on the income received from employment, is deductible from the monthly remuneration and paid by the employer, workers are not required to file any documents with the National Revenue Agency. Where they have received income from other sources, they must file an annual tax return with the Agency. There is no non-taxable subsistence minimum but a statutory threshold of recognized expenses applies which is 25% of the income, which is deducted for the purposes of calculating the annual taxable base.

An annual corporate tax rate of 15 percent is levied on the income of sole traders and the taxable base is calculated by taking into account any tax deducted or paid during the tax year under the applicable tax headings.

In accordance with the Bulgaria Corporate Income Tax Act, tax is levied on the income of local legal persons, local legal persons who are not registered as traders, including the organizations of religious denominations, income from the rental of real and movable property, and the income of legal persons registered outside the territory of Bulgaria which has been generated in Bulgaria. Persons who conduct business as traders within the meaning of the definition laid down in the Company Act, including sole traders, declare any tax due or paid on expenditure pursuant to the Corporate Income Tax Act in the annual tax return. The tax return is accompanied by a financial report certified by an auditor.
The rate of corporate tax shall be 10 per cent.

The standard value-added tax rate in Bulgaria is 20 percent. A reduced tax rate of 9 percent is levied on hotel accommodation when it is part of organised travel and a zero tax rate is levied only on deliveries expressly stipulated by law.

Tax return deadlines in Bulgaria

• The deadline for submitting the annual tax return as per Art. 50 of the PITA is April 30^th of the following year.
• the deadline for paying the tax for additional payment, which is declared in the annual tax return, is also April 30^th of the following year.

The persons, who submit their annual tax return electronically by April 30^th, are entitled to a 5% discount on the paid within the same deadline portion of the tax for additional payment under the annual tax return, provided that they don’t use the 5% discount stipulated for the February 10^th deadline. The discounts can be used if the individuals, who must pay tax in advance, did pay the full amount of the tax due within the statutory deadlines.

The annual tax return must submitted by resident and non-resident persons who have received income during the fiscal year which is:

• subject to taxation on the common annual tax base including income from employment contract;
• subject to taxation with tax on the annual tax base for the income from economic activity as sole proprietor and from other economic activity as per Art. 29a of the PITA;
• subject to taxation with patent tax under the Local Taxes and Fees Act.

 The resident individuals are obliged to declare:

The foreign types of income received during the year and having a foreign source:

• income from dividends, liquidation quotas and interest from deposits in commercial banks;
• taxable income from supplementary voluntary social security, voluntary health insurance, and life insurance;
• taxable income received from exchange of shares and equity with regard to the conversion of commercial companies abroad.

Shares owned and shareholdings in companies, place of business and real estate properties located abroad.

Loans/borrowings provided, as follows:

– the outstanding balance of the loans provided during the year, if their total amount exceeds 10 000 leva;

– the outstanding balances  of loans provided during the same year as well as within the previous 5 fiscal years, if the total amount of these balances exceeds 40 000 leva;

-the outstanding balance of loans received if their total amount exceeds 10 000 leva, excluding bank loans received from credit institutions;

-the outstanding balances of loans received during the same year as well as within the previous 5 fiscal years, excluding bank loans received from credit institutions as per the Credit Institutions Act, if the total amount of these balances exceeds 40 000 leva.

Non-resident individuals, who for taxation purposes are considered residents of EU member-states or a country, which is a to the Agreement on the European Economic Area, are entitled to choose to recalculate the final income tax pursuant to Art. 37 of the PITA. The choice can be exercised by submitting an annual tax return pursuant to Art. 50 of the PITA, whereas the tax return includes all other income that are subject to declaring by a non-resident person.

Don’t hesitate to contacts us for detailed information or personalized advice using the contact form below.