Country Desks — Southeastern Europe
Bulgaria
Legal System
Civil law — codification based on the continental system. Bulgaria is a member of the EU, following EU directives and regulations. The legal framework is centered on the Constitution and the Commercial Act.
Principal Arbitration Centre
BCCI — Arbitration Court at the Bulgarian Chamber of Commerce and Industry. Rules of the Arbitration Court. Sofia is a strategic location for Balkan-region cross-border disputes and commercial arbitration.
Corporate Tax
Flat corporate income tax rate of 10%, one of the lowest in the EU. Standard VAT rate is 20%. Beneficial tax treaties and incentives for investment in high-unemployment regions are available.
Partner Office
Served in coordination with our Sofia partner office across Balkan regional M&A, energy projects, manufacturing investment, and BCCI arbitration proceedings.
Country Desk Brief
Legal System, Investment, Trade & Regulation
Bulgaria operates under a civil law system deeply influenced by the Germanic and French traditions, with the Commercial Act (Търговски закон) providing the foundation for corporate activities. As an EU member state, Bulgaria is fully integrated into the EU legal and economic order, ensuring predictability in trade, competition, and regulatory enforcement. Mermeroglu Legal provides strategic advice on market entry, investment structuring, and compliance for international operations, maintaining close collaboration with our partner office in Sofia. The firm’s expertise covers the full spectrum of Bulgarian corporate law, including the formation of limited and joint-stock companies, cross-border M&A, and dispute resolution.
The standard vehicle for most foreign investors is the OOD (Дружество с ограничена отговорност) — a private limited liability company — which requires a nominal minimum capital of BGN 2 (approx. €1). For larger ventures or firms planning a public offering, the AD (Акционерно дружество) — a joint-stock company — is required, necessitating a minimum capital of BGN 50,000 for non-public entities. The Bulgarian corporate environment is designed for ease of entry and tax efficiency, particularly for regional distribution or manufacturing hubs serving the wider EU and Balkan markets.
Bulgaria places few restrictions on foreign capital, with the Investment Promotion Act offering structured incentives for large-scale investments. Sofia is a key hub for regional operations, attracting FDI in BPO (business process outsourcing), manufacturing, and ICT. The stability offered by the currency board (pegging the Lev to the Euro) and the low tax regime make Bulgaria a primary choice for multinational companies seeking a competitive, cost-effective base for their EU operations.
At a Glance — 2025 / 2026
Investment & Trade Indicators
Establishment
How to Form a Company
The OOD is the most common form for international investors due to its structural simplicity. Incorporation is managed via the Commercial Register at the Registry Agency (Търговски регистър). The process involves drafting statutes, depositing minimum capital in a special "escrow" bank account, and submitting formal filings electronically using a qualified e-signature. No physical presence of shareholders is required for initial registration. The AD (joint-stock company) requires more rigorous documentation, including a set of bylaws, a formal appointment of a board of directors, and registration of shares.
Foreign Participation: Bulgaria imposes no general nationality restrictions on foreign ownership. FDI is further encouraged by incentives provided for projects that create employment or utilize high technology in economically underdeveloped regions. The process is fully transparent, with most corporate activities and company statuses being viewable via the public online Commercial Register.
Corporate Benefits: Beyond the 10% tax rate, Bulgaria offers tax-free status on certain capital gains, an extensive network of double-taxation agreements, and minimal administrative burdens for small-to-medium enterprises, making it highly attractive for regional holding and service entity headquarters.
Typical steps — OOD incorporation
Investment Climate
Investment Models & Where Capital is Flowing
Bulgaria offers a highly stable environment for international companies, featuring a currency peg, EU membership, and a pro-business tax structure. The Bulgarian Investment Agency actively assists investors in identifying regional benefits and state aid opportunities. Key advantages include a talented, multilingual labor pool, reliable digital infrastructure, and proximity to major manufacturing hubs across Central and Eastern Europe. Recent market data shows capital flowing heavily into several key sectors:
- BPO and IT services — Sofia continues to be one of the primary European hubs for business process outsourcing, software development, and specialized tech consulting, drawing large-scale regional HQ investment.
- Manufacturing — Automotive parts, medical device components, and electronics manufacturing remain major focus areas, driven by competitive logistics costs and skilled engineering talent.
- Energy — Large investments are flowing into renewable energy projects, particularly in solar and wind, supported by EU-wide green transformation funds.
- Logistics and Warehousing — Strategic expansion of industrial and distribution centers near major corridors and ports, serving regional supply chain needs for Western European retail brands.
- Agriculture and Processing — High-quality food processing facilities and organic agricultural land investments are attracting interest from various European food conglomerates.
- Mining — Mineral exploration and high-value metal processing are long-standing pillars of the industrial economy, with significant technological modernizations currently underway.
Foreign Trade — 2024
Recent Trade & Principal Partners
Bulgaria's trade strategy is deeply tied to the EU single market. Exporting sectors are dominated by machinery, electrical equipment, base metals (specifically copper), and fuel products. The EU is the destination for a majority of Bulgarian exports, with Germany, Romania, and Italy serving as top export partners. Bulgaria's geographic position makes it a transit point for goods movement in the Black Sea and the Balkans, ensuring a steady stream of trade activities with non-EU neighbors and the wider Middle Eastern region for agricultural and consumer goods.
Top Export Partners (2024)
- Germany
- Romania
- Italy
- Greece
- Türkiye
Top Import Partners (2024)
- Germany
- Russia (Energy supplies)
- Italy
- Romania
- Türkiye
Principal Export Sectors
- Electrical machinery & equipment
- Copper & metal products
- Mineral fuels & oils
- Textiles & garments
- Agricultural products & processed foods
Regulatory Developments
Notable Legislative Changes
Ongoing — EU-driven reform
Investment Control & Screenings
Bulgaria has been strengthening its screening mechanisms for foreign investments in strategic sectors to align with EU requirements, focusing on national security, defense, and essential infrastructure assets.
Effective 2024/2025
Digitalization — E-Government & E-Invoicing
Progressive implementation of the Peppol standard for B2G and B2B electronic invoicing to enhance tax transparency and simplify administrative procedures for registered business entities.
In force
Energy Sector Transition — Renewable Energy Act Updates
Regulatory adjustments to simplify the licensing and integration of renewable energy sources (wind and solar) into the national grid, supporting Bulgaria's decarbonization targets.
Active
Cybersecurity — Transposition of NIS2
Harmonization with the EU’s NIS2 Directive, introducing more stringent cybersecurity risk management and reporting obligations for critical sectors such as transport, energy, and digital services.
Note: Regulated sectors, energy pricing, and financial services are managed through sector-specific authorities (Energy and Water Regulatory Commission, Bulgarian National Bank). Project-specific analysis is highly recommended.
Resources
Useful Official Links
Our Approach
How Mermeroglu Legal Engages in Bulgaria
Bulgarian mandates integrate company formation (OOD/AD), meticulous tax compliance management, and strategic market entry strategies tailored to regional Balkan business ecosystems. Our practice is structured to provide a single point of accountability for international investors, ensuring seamless coordination with our local partners in Sofia to navigate the specificities of the Bulgarian legal, tax, and regulatory landscape.
Each mandate is personally directed by a matter principal, supported by our internal team and expert local counsel — covering incorporation, fiscal reporting, foreign trade compliance, M&A, and dispute resolution before national courts and BCCI tribunals.
INITIAL ENQUIRIES
Market entry, cross-border investment, and legal support for regional business interests in Bulgaria are managed through our coordinated internal and alliance team.
Contact Us