In recent months, there has been a growing interest among Romanian construction entrepreneurs in the possibility of registering companies in Bulgaria. According to information published by the Bulgarian-Romanian Chamber of Commerce (BRCC) and Arena Construct, several companies from the southern part of Romania are planning, after May 1, 2025, to move their legal registration to Bulgaria while continuing to operate on the Romanian market.
The reasons behind this decision are primarily economic—lower tax rates and more favorable labor costs compared to the recently introduced less advantageous fiscal conditions in the Romanian construction sector.
What the Bulgarian legal and tax environment offers
Bulgaria offers several key advantages for foreign entrepreneurs:
- A fixed corporate tax of 10% and a 5% dividend tax, applicable to all types of commercial companies—regardless of size.
- Lower labor costs, including a lower minimum wage and capped social security contributions.
- Favorable minimum capital requirement —1 euro is sufficient.
- Fast registration process—within 3–4 business days.
- Facilitated movement of goods and services following the removal of border controls between Bulgaria and Romania within the Schengen Area.
- Opportunity to create Variable Capital Companies (VCCs)—a legal form recently introduced in Bulgaria that provides exceptional flexibility for business structuring, capital raising, investor entry and exit, and internal rules adaptation based on the company’s needs. This form is particularly suitable for fast-growing sectors and cross-border structures.
Learn more about the benefits of VCCs in G&P Law’s analyses: “Variable Capital Companies (VCCs): Global Practices”; “7 Good Reasons to Choose a VCC”
Obligations when operating on Romanian territory
It is important to note that employees posted to Romania by Bulgarian companies are subject to Romanian labor law, including:
- Minimum labor conditions, working hours, and overtime regulations;
- Provision of transport, food, and accommodation where necessary;
- Submission of notifications and maintenance of relevant documentation in Romanian;
- Compliance with Romanian labor inspections and occupational health requirements.
How we can help
G&P Law supports foreign companies in registering entities in Bulgaria, selecting the appropriate legal form based on business activities and investment goals, drafting incorporation documents and internal rules, consulting on labor and tax law, preparing the necessary documentation for posting employees to Romania, and ensuring compliance with both Bulgarian and Romanian regulatory authorities.
Our law firm has extensive experience in corporate law and can also assist with the establishment and restructuring of Variable Capital Companies (VCCs). This legal form offers greater operational efficiency, flexible governance, and easier adaptation to dynamic markets.
For more information and personalized consultation, feel free to contact us.
Sources:
G&P Law: Variable Capital Companies – Analysis and Legal Framework
Arena Construct, March 11, 2025, link to publication
Zara Consult – Member of the Bulgarian-Romanian Chamber of Commerce
Images: Canva