Financial results of 2019 in Bulgaria and forecasts for 2020

According to data from the National Statistical Institute, the business climate in Bulgaria in 2019 was unstable. At the end of spring the indicators rose, but in October they fell to the level of early 2018. Nevertheless, Bulgaria remains an attractive country for living and doing business.

In the global ranking of countries with a favourable business climate, Bulgaria occupies a low position. However, in the opinion of immigrant businesspeople, doing business here is fairly untroubled, and the corporate profit tax rate remains the lowest in Europe – 10%. What can let business owners down is, above all, late filing of reports or accountant’s errors in recording transactions, especially within the European Union; in that case audits and fines cannot be avoided.

Taxes in Bulgaria are still low; the only important thing is to pay them on time. It is not the practice here to “torment” new businesspeople with constant inspections. Favourable conditions open up wide opportunities for developing your own business and making a profit.

Practice also shows that a company can be set up in Bulgaria within a matter of days, and not only by Bulgarian citizens but by foreigners as well. As of this year, there are more opportunities for seasonal work for third-country nationals.

In 2019 real estate became more affordable, and the number of offers on the market grew. Although obtaining construction permit documentation takes several months, no particular problems arise if the design has been properly prepared and approved. The main thing is to observe the rule — first the design and the building permit, then the construction, and not the other way round. In practice, to live and do business in Bulgaria you need correctness and the right sequence of actions, filing reports and making the required payments on time; then life flows along at a measured and calm pace. As for banks, loans are not handed out freely here; every client is studied carefully. If you decide to close your business, the procedure may seem too lengthy and complicated, but that is the case if you handle it yourself. Specialists (an accountant or a lawyer), if they hold a power of attorney, deal with this matter quite easily.

The requirements for online shops have changed slightly. Now, before starting operations, you must without fail notify the tax office, providing detailed information concerning the software, the payment platforms used and so on.

In 2019 many immigrants in Bulgaria had to face the consequences of the adoption of the anti-money laundering act. Banks became extremely reluctant to open accounts for foreigners who do not yet hold any residence status in Bulgaria, because of the need to carry out preliminary checks on such persons. This also applies to accounts for legal entities with the participation of foreign nationals. For unhindered dealings with banks it is best to arrange for a residence permit in Bulgaria, which is quite easy for EU citizens and harder for third-country nationals.

We draw your attention to the amendment of the Bulgarian Foreigners Act. In 2019 citizenship by investment was abolished. It is no longer possible to obtain a passport by investing funds in the Bulgarian economy; other grounds are needed to become a citizen of the country.

Bulgarian Expert is ready to assist you in preparing the necessary documentation, obtaining the permit and legalising your stay in Bulgaria, as well as to help you at every stage of starting and running a business in Bulgaria.

What awaits us in 2020?

Yavor Kuyumdzhiev, former Deputy Minister of Economy and Energy, forecasts a new financial crisis before the end of 2020. In his view, Bulgaria, being the only Eastern European country that has not attracted a single major manufacturer in 30 years, is in a vulnerable position and must defend its national interests, especially in the energy sector.

Despite expectations of a global economic crisis, Bulgarian managers and experts look to the future with optimism and hope that in 2020 the country’s business climate will improve.

From the new year the minimum wage in Bulgaria will rise by 50 leva and become 610 leva. This means that to obtain a type D visa, as well as to obtain or extend a residence permit for 6 months, a larger sum than before will have to be placed in a bank account – 3660 leva. To extend a long-term residence permit for a year, accordingly, 7320 leva will be needed in the account. Those who have already received a permanent residence permit or EU long-term resident status will have to pay larger social security contributions.

From 1 July the minimum pension will also increase and will amount to 250 leva. Accordingly, to obtain a long-term residence permit for a year, pensioners will have to present a certificate confirming 3000 leva in their account.

In 2020 changes to Bulgarian legislation are expected which will affect foreign nationals and those doing business in Bulgaria.

Amendments are being made to the Foreigners Act regulating family reunification. A procedure is being introduced for granting residence permits to foreigners who have been granted stateless person status and cannot obtain a permanent residence permit or EU long-term resident status. In connection with the amendments to the Child Protection Act, it has become possible to grant residence permits to foreign children who are in Bulgaria without parents or guardians, until they come of age. It will be easier for foreigners of Bulgarian origin to obtain a permit to stay in the country, and this applies in particular to researchers and students. In addition, it has become possible not to submit to the migration service the document confirming payment of the state fee for the residence permit, if information about the payment can be obtained electronically.

From January, changes concerning the payment of taxes will come into force. In particular, they will affect the VAT act. At present many companies avoid VAT registration by setting up new legal entities. This practice will be brought to an end and new restrictions will appear. In order to combat tax evasion, the corporate taxation act will be amended. You can obtain detailed consultations regarding taxation in Bulgaria in 2020 from Bulgarian Expert.

Read also:

Company registration in Bulgaria

Accounting services for a company in Bulgaria

Obtaining a residence permit in Bulgaria

Freelance profession in Bulgaria