It is important to understand that is not easy to have a successful business in any country, and Bulgaria is not an exception.
Even Bulgarian law, rules, and regulations regarding foreigners doing business are welcoming to foreign investors, probably you as a small business owner will face many practical challenges, and it’s important that you analyze all info, and take it into consideration before starting your Business in Bulgaria.
First is the acclimatization to Bulgaria, normally it will take some time for you to get familiar with Bulgarian culture, the people and the business environment in Bulgaria, one of the biggest challenges is the language barrier and the Cyrillic alphabet can be an extra test to your adaptability skills.
It’s crucial you do your initial research, and you definitely should do your homework before making decisions to move, we recommend you to buy a ticket and do a short trip to Bulgaria, try to get in contact with people that you can trust, and ask them their opinion about your business plans.
Normally the expats that want to do business in Bulgaria are small business owners, freelancers, and retired people.
Doing Business in Bulgaria1- Be aware of the Cultural differences
It will depend greatly on where you come from, it will be different if you come from Asia, the Americas or other countries in Europe, but normally foreigners doing business in Bulgaria will face similar problems if you expect things to work as they work back home, take your time, be patient and get to know the Bulgarian mentality and their way of doing business.
Bulgarian workers don’t have the initiative that you can see in other countries if you want them to do something you have to say it clearly. your communication with workers and suppliers will be key in the success of your business, tell them clearly what do you expect from them, and in that way, you will avoid many frustrations, delays and extra cost for your business.
Tip: make a clear job description of the different positions in your company, to make it easy for everybody to define duties and responsibilities, in order to avoid later disputes.
2- Bulgarians need Motivation
Foreigners find strange that Bulgarian people don’t smile as much as in other countries, this doesn’t mean that they are angry, or upset, they are just concentrated on their own business, if you want to see more smiles, create that culture in your company, motivate them and generate a working atmosphere that supports been in a good mood and get the best results for your company.
On the other hand, Bulgarians are always ready to complete their important task before leaving, they are normally not clock-watchers.
Tip: get to know your employees, respect them and create systems to keep people motivated, offer them training opportunities, team building activities are also greatly appreciated by Bulgarian employees.
3- Bulgarians are intrinsically skeptical
Bulgarians are very skeptical about everything new and big changes, normally for them, the boss is always the in charge and they would rarely argue with him/her, and unfortunately, they would not tell their boss openly if they don´t like his/her ideas, even if they have a better one.
Bulgarians are suitable organization people, and they are good at finding solutions for problems, just be clear when you communicate with them, be smart and guide them, give them opportunities to use their intelligence to support the business.
Tip: Make an internal program that rewards initiative and problem-solving skills of your employees.
4- Dealing with Bulgarian institutions
It doesn’t really matters in which line of business you are at some point you will need to deal with Bulgarian institutions, and they can be intimidating at the beginning, be prepared with your stamp, your office documentation in order and a competent accountant and you will be able to handle the Bulgarian bureaucracy.
Rarely at the government, administrative offices will talk to you in English when dealing with you, and this is because we are in Bulgaria.
Its better you need to go there with somebody who speaks your language and Bulgarian to help you. Furthermore, it´s difficult to find any official government documents in English.
Tip: get a reliable accountant that you can trust, it will be a key part of your business organization
5- The Bulgarian banking sector
During the last years have been advances in this area, interest rates are getting closer to the other European countries, and some special credit lines have been created for Small and medium businesses in Bulgaria, mostly backed up by the European Union founds.
But anyway banking in Bulgaria continues to be a challenge for entrepreneurs in Bulgaria, lack of information in foreign languages, lack of competition between banks and high fees are some of the biggest problems when you need to do deal with banks in Bulgaria.
Tip: Be careful when you chose your bank, nowadays there are some more up to date alternatives to traditional banking that you may want to check, like e-wallets and virtual bank accounts and so on.
6- Corruption in Bulgaria
Even if corruption has decreased during the last years, there are still signs of it at all levels, for example suggesting you that if you give a present to the official, your document could be approved faster than normal, or directly asking you money to close their eyes during an inspection that found some anomalies in your company.
Tip: get informed and try to stay away from sectors where corruption is an issue, and keep a low profile if your business is doing extremely good.
7- COVID 19 uncertainty
During 2020 we have witnessed the extra challenge that the emergence of COVID 19 has created for new and existing business, many have been forced to stay close or reduce their working hours (hotels, restaurant, etc), on the other side the government help, has been focus more in small and medium enterprises, and not in micro business and startups which are the most common form of entrepreneurship for foreigners and expats in Bulgaria.
Tip: if you are thinking to start your business in Bulgaria, check a sector that could allow you easily to work in a home office, for example; copywriting, and e-commerce can be good options.
On the other side
Taxation In Bulgaria
Taxes in Bulgaria are the same for locals and foreigners, the Personal Income Tax Rate in Bulgaria stands at 10 percent, dividends are subject to a withholding tax of 5 percent rate when distributed and the corporate income tax is fixed at 10 percent.
Bulgaria has signed double taxation treaties with more than 60 countries in order to avoid double taxation for foreigners.
The cost of labor in Bulgaria is significantly lower than in the rest of Europe. Insurance and the cost of real state are also at least a third lower than in many European countries.
The Conclusion
It’s possible to do successful business in Bulgaria, there are problems and challenges like in any other country, but if you do your research, and find a niche that you can develop in Bulgaria, you can give a try and become (or continue your career as) an entrepreneur in Bulgaria.
