Hiring EU citizens to work for a Bulgarian company: procedure, migration rules, taxation, business trips and remote work

Compared with hiring third-country nationals (from outside the EU), this procedure is considerably simpler, since EU citizens do not need to obtain a work permit (разрешение за работа).

Below is a detailed guide covering the legal, administrative and tax aspects, as well as the rules for arranging business trips and the procedure for regulating permanent work from abroad.

1. Basic principles

No work permits required

Citizens of EU/EEA countries and Switzerland are entitled to work in Bulgaria on the same terms as Bulgarian citizens. The employer does not need to obtain a permit from the Employment Agency (Агенция по заетостта).

2. Migration rules and residence registration

Although EU citizens do not need a visa or a work permit, they are required to complete administrative registration at their place of residence in Bulgaria in the case of a long stay.

Registration deadlines and procedure:

• Up to 3 months: An EU citizen is entitled to stay in Bulgaria on the basis of a valid passport or identity card without any special registration.
• Over 3 months: An EU citizen must apply to the Migration Directorate of the MVR (Ministry of the Interior) at their place of residence in Bulgaria in order to obtain a Certificate of long-term residence (Удостоверение за продължително пребиваване).

Following the review, the EU citizen is issued a registration certificate and is also assigned an LNCh (Личен номер на чужденец) or an official number for tax and social security purposes.

3. Taxes and social security when working in Bulgaria (Osigurovki)

An EU citizen working under an employment contract directly on Bulgarian territory falls under Bulgarian tax, pension and social security legislation.

1. Social and health insurance (Osiguritelni vnoski)

• Insurance contributions are calculated on the gross salary, but not below the minimum insurance threshold for the position concerned and not above the maximum insurable income (максимален осигурителен доход).
• The total insurance contribution rate is approximately 32.7%–33.4%, of which:
  • Employer’s share: around 18.9%–19.6%.
  • Employee’s share: 13.78% (withheld from the salary).

2. Income tax (DDFL)

• Bulgaria has a flat personal income tax rate — 10%.
• The tax is calculated on the taxable base (gross salary minus the employee’s withheld personal insurance contributions).

4. Permanent remote work by employees from abroad

Where an employee works permanently on a remote basis while located in their country of residence (in EU member states), special rules apply to social insurance, tax payment and administrative reporting.

1. Social insurance (Осигуровки)

In EU countries, the basic principle for coordinating social security systems is the lex loci laboris rule (the law of the country where the work is actually performed), set out in Regulation (EC) No 883/2004. If an employee works permanently on a remote basis from their country of residence, they are subject to social and health insurance exclusively in that country, and not in Bulgaria.

Reporting and contribution payment procedure for a Bulgarian employer:

• Registration in the foreign country: The Bulgarian company must register as an employer with the social insurance fund of the employee’s country of residence (without having to open a representative office or branch).
• Calculation and payment of contributions: Insurance contributions are calculated at the rates and under the rules of the employee’s country and are transferred by the employer directly to the relevant foreign budget.
• Alternative agreement (Art. 21 of Regulation 987/2009): The employer and the employee may sign an agreement under which the employee files the reports and pays the contributions on the employer’s behalf, receiving compensation for the insurance portion as part of their salary.
• Short-term posting option (up to 1 month): If the employee is initially engaged with their main place of work in Bulgaria and is sent on a business trip abroad for up to 30 days, social contributions are paid in full in Bulgaria. An A1 certificate for such short trips is not required — a standard business trip order (Заповед за командировка) is sufficient. An A1 certificate becomes mandatory only for long-term postings (up to 24 months), in order to obtain official exemption from paying contributions in the country of destination.

2. Income tax (ДДФЛ / personal income tax)

The taxation of income is governed by domestic legislation (Закон за данъците върху доходите на физическите лица — ЗДДФЛ) and by double taxation avoidance treaties (СИДДО):

• No tax is withheld in Bulgaria (the basic rule for remote work abroad): If the employee permanently resides abroad (and is a tax resident there) and actually performs their work duties from their remote workplace outside Bulgaria for more than 183 days a year, then under the rules of the double taxation treaties and Art. 8 of the ЗДДФЛ the income is deemed to come from a source outside Bulgaria. In this case the Bulgarian company does not withhold the 10% Bulgarian ДДФЛ, and the tax is paid in the employee’s country of residence.
• Cases where the tax is paid and withheld IN BULGARIA (10%):
  1. Short business trips / postings to Bulgaria: If a remote employee based abroad comes to Bulgaria to perform work duties (for meetings, training, work at the head office), the income for the days actually worked on Bulgarian territory is deemed to come from a source in Bulgaria (Art. 8, para. 2 of the ЗДДФЛ) and is subject to 10% ДДФЛ.
  2. Retention of Bulgarian tax residency: If the employee works remotely from abroad but retains the status of a Bulgarian tax resident (for example, spends fewer than 183 days a year abroad, or their centre of vital interests remains in Bulgaria). In this case they are subject to taxation in Bulgaria on their worldwide income.
  3. Short business trip abroad from Bulgaria (up to 30 days): Where an employee is initially engaged with their main place of work in Bulgaria and is only temporarily sent on a business trip abroad, the employer continues to withhold the full 10% ДДФЛ in Bulgaria under the standard employment contract.
  4. Special conditions of the double taxation treaties (the 183-day rule and employer costs): If, under the specific DTT between Bulgaria and the country of residence, the conditions for full exemption from withholding tax are not met (for example, if the payroll costs are borne by the company’s permanent establishment in Bulgaria), the right to tax the salary may remain with Bulgaria.

3. Summary table of payroll payments for remote work abroad

4. Administrative reporting with the NAP (Bulgaria)

• Notification under Art. 62 of the Labour Code: Filed within 3 days from the date the contract is concluded.
• Entry on the place of work: The performance of work outside Bulgaria is recorded in the NAP system.
• No monthly declarations: The employee is not included in the monthly Declaration Form 1 and Form 6 in Bulgaria.

5. Practical arrangements for the company

To avoid direct registration with foreign tax authorities, companies use the following methods:

1. Agreement with the employee (under Art. 21 of Regulation 987/2009).
2. EOR (Employer of Record) — hiring through international HR platforms (Deel, Remote).
3. Services agreement (B2B) — the work is performed by a freelancer, a self-employed person or a local sole trader/EOOD (single-member LLC).

5. Business trips of EU citizens (Командироване)

A Bulgarian company has the right to send its employees who are EU citizens on business trips both within Bulgaria and to other countries (including EU member states).

1. Business trips within Bulgaria and abroad

• A business trip order (Заповед за командировка) is issued in accordance with Наредба за командировките в страната or Наредба за служебните командировки и специализации в чужбина.
• The employee is paid a daily allowance (дневни пари), and travel and accommodation expenses are reimbursed.

2. Posting within the provision of services in another EU country (Directive 96/71/EC and Directive 2018/957)

If a Bulgarian company sends an employee to another EU country to provide services or perform a contract:

• Minimum standards of the country of destination: The employee must be provided with the working conditions and the minimum rate of pay in force in the country to which they are posted (if these are more favourable than the Bulgarian ones).
• A1 certificate: For long postings, the employer files an application with the National Revenue Agency (NAP) to obtain form A1, confirming that Bulgarian insurance is retained. For short trips (up to 30 days), an A1 certificate is not required.