Do I Need a Local Entity to Hire in Bulgaria?

In Bulgaria, a "local entity" refers to a recognized presence that can act as an employer—typically a subsidiary or branch office. This setup allows you (or a provider acting on your behalf) to be recognized locally and fulfill payroll and employment obligations.

Without a local entity, you can't effectively register as an employer, manage mandatory social security processes, run compliant payroll, or issue employment terms that meet local regulations. Bulgaria's National Revenue Agency outlines the responsibilities for employers regarding social security contributions, which are essential for compliance.

What is Required to Employ Someone in Bulgaria?

• Local employing entity required to directly employ? Yes (unless using an EOR)
• Payroll registration required? Yes (employer registration with the National Revenue Agency)
• Withholding/tax remittance required? Yes (mandatory payroll withholding applies)
• Social contributions required? Yes (employer must pay social security contributions)
• Local employment agreement required? Yes (written contracts are mandatory in Bulgaria)
• Mandatory benefits to budget? Yes (statutory leave, social security coverage, and other entitlements)
• Works council/collective agreements considerations? Often (many sectors are influenced by collective agreements)

Best Options If You're Hiring in Bulgaria

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should proceed with caution. Hiring contractors in Bulgaria can be a viable option, but it comes with risks if the relationship resembles employment.

While contractors don’t require a local entity, Bulgaria has strong protections for workers, and misclassification can lead to legal issues. Authorities typically assess the nature of the relationship, focusing on whether the contractor operates independently or is integrated into your business.

• The work is exclusive or closely aligned with your business
• You control the contractor's hours, location, or methods
• The contractor's role is central to your operations

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Bulgaria, depending on required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 500–1,200 BGN per month ($275–$660)
• Payroll provider: Estimated 200–500 BGN per employee per month ($110–$275)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated 1,000–3,000 BGN per year ($550–$1,650)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Bulgaria

Hiring in Bulgaria can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Bulgaria quickly without establishing a local entity, eliminating incorporation costs and ongoing administration.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.