Self-employed in Bulgaria

Public body: BULSTAT Register


The two most popular types of self-employment in Bulgaria are Sole Trader and Freelancer. Below we review the advantages and disadvantages of both.

The basics

The sole trader is an individual, who is the exclusive owner of a business entitled to keep all profits after tax, but also liable for all losses. She/he is obliged to pay social security, health insurance, and a 15% income tax.

Alternatively, license tax applies to the income arising from certain business activities. For example restaurants, bars, coffee shops, gyms,  carpentry, knitting, shoemaking, hairdressers, typewriting, beauticians, watchmakers, upholstery, car repairs, and car washes. If an individual carries out an activity from the above list, she/he owes license tax when the next two conditions are also met: her/his turnover in the preceding year does not exceed 100,000 BGN and she/he is not registered for Value Added Tax.


It has a simple legal setup, and there is no capital requirement. The winding-up (dissolving) procedure is also relatively straightforward.


There is unlimited liability to creditors as there is no distinction between personal belongings and company assets. It is harder to raise additional capital from third parties.

Register as a Sole Trader

Any individual with permanent residence in the country may register as a sole proprietor. The main exception is if the individual has undergone bankruptcy proceedings or has been sentenced for bankruptcy, or if she/he was a manager of a company terminated due to bankruptcy. Such individuals cannot carry out activities as a sole proprietor.

  1. A person who would like to register as a sole proprietor shall declare the absence of the above circumstances by providing a statement that is attached to the registration application.
  2. Applies with the Registry Agency. In addition, the application may be filed on-site at the reception desk at the Registry Agency or online on the website of the Registry Agency. An electronic signature (QES) is required for online application.
  3. Pays a fee due to the Registry Agency upon the filing of the application. The amount is 30 BGN when filing the application on-site and 15 BGN when applying electronically.
  4. Chooses a name under which the sole proprietor will be entered in the Commercial Register. The name should contain the first and family or middle name of the natural person without abbreviation.

Freelancer in Bulgaria

Freelancers are self-employed individuals who are often hired to work for different companies on particular assignments. These include accountants, auditors, lawyers, notaries, architects, and others.

Registration process

There is a mandatory registration within 7 days of starting an assignment. Registration takes place in both the Registry Agency and National Revenue Agency. Individuals receive a unique unified identification code (UIC), also known as BULSTAT code. The registration fee is 10 BGN. Applicants declare their professional qualification by providing an original (and copy) of a diploma and/or certificate.

Taxes for freelancers

Freelancers in Bulgaria pay a flat 10% income tax. Furthermore, the effective rate is even lower. Bulgarian authorities have simplified the process. They have introduced a fixed 25% rate for eligible expenses, without the need for official documents to prove. The tax base is reduced even further with 27.8% of the social, pension, and medical insurance contributions. Therefore, if a freelancer earns 1000 EUR a month, the taxable income is 1000 minus 250 (25% for eligible expenses) minus 278 (social/medical/pension contributions), resulting in a 472 EUR tax base and 47 EUR tax (10%). The net result after tax is 425 EUR. In addition, the effective tax rate is 4.7%.

Tax residency

A resident of Bulgaria for tax purposes is someone who:

  1. Stays in the country for more than 183 days in a calendar year
  2. Have a permanent address in the country
  3. Have a center of vital interests in the country

Are you an EU citizen looking to apply for a residence permit in Bulgaria?

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