EOR vs EOOD in Bulgaria: choosing how to employ your first staff

The difference comes down to whose name is on the employment contract. With an employer of record, our name goes on the contract as legal employer: we sign the Bulgarian labour contract, enter it in the National Revenue Agency (NRA, НАП) employment register and run payroll in euro, and you stay in charge of the daily work. With your own EOOD, your Bulgarian company signs the contract and carries every employer duty itself.

EOOD is short for еднолично дружество с ограничена отговорност, a limited liability company with a single member. An OOD (ООД) is the same structure with two or more members. A foreign business that wants a Bulgarian company of its own will normally pick the EOOD, owned outright by the parent.

Neither route changes what the employee is entitled to. A developer in Sofia gets the same Labour Code contract, the same social security cover and the same flat 10% income tax whichever name sits at the top of the payslip. What does change is the workload on your side, the fixed costs, and how easily you can grow the team or step back. The sections below weigh those three things using 2026 figures.

Some companies look for a third path and sign a civil contract (граждански договор) with the person directly. That rarely survives scrutiny: Labour Code Art. 1(2) treats any relationship for the provision of labour as employment, with the start of that employment dated by inspectors where needed (Art. 405a). Our piece on civil contract vs employment in Bulgaria explains where that line falls.

Forming an EOOD means registering a new company in the Commercial Register (Търговски регистър), kept by the Registry Agency, and only then turning that company into an employer. Registration is the shorter half. The longer half is everything a trading company needs before it can pay anyone.

Expect to agree founding documents and appoint a manager, open a Bulgarian bank account and pay in the share capital, engage an accountant to keep the books, and arrange electronic access to NRA services so the company can file its monthly declarations. You will also want written internal pay rules that deal with the length-of-service bonus (клас прослужено време, “klas”), since that supplement is owed to every employee with recognised experience. Fees and filing options change, so check them with the Registry Agency before you budget.

Once the company exists, the employer work begins: a written contract for each hire containing what Labour Code Art. 66 requires, a register entry with the NRA for each contract within 3 days of signing, payroll and declarations every month, and records the General Labour Inspectorate can ask to inspect. Having a single employee does not shrink that list.

One cost rarely shows up in formation quotes. Someone at head office has to own the company: board resolutions, bank mandates, the accountant relationship and year-end sign-offs all land on a director who may sit several time zones away from Sofia.

If two founders or two group companies will own the Bulgarian business together, the OOD is the form to look at instead. The choice between EOOD and OOD affects ownership and decision-making; it makes no difference to the employment rules described next.

Bulgarian employment law attaches to the employee, not to the corporate structure, so the core package is identical. In 2026 the contract must be in writing, pay is stated in euro, and the hire may not start work until they have been handed the signed contract together with the NRA-certified register entry (Labour Code Art. 63). The other fixed points:

• employer social security contributions of 18.92% and employee contributions of 13.78%, levied on monthly pay capped at €2,300 from 1 August 2026 (€2,111.64 before that date)
• a flat 10% income tax, withheld from pay every month
• a floor of 20 working days’ paid leave in each calendar year
• €620.20 a month as the 2026 national minimum wage
• 30 days’ notice on an open-ended contract, or more by agreement, with 3 months as the upper limit
• dismissal only for one of the reasons Art. 328 lists, or for disciplinary reasons under Art. 330

This shapes the decision because an EOR is not a way around any of these rules. It changes who administers them. If what worries you is the cost or the rigidity of Bulgarian employment itself, forming an EOOD will not help, and nor will we. The tasks that move to us are set out in the EOR’s role in Bulgaria.

An EOR costs a fee per person on top of salary and statutory contributions; an EOOD costs a block of fixed overheads you pay whether you employ one person or twenty. With Employer of Record Bulgaria, €599 per employee per month is where that per-person fee starts.

Picture a Sofia developer hired at €40,000 gross for 2026. Salary plus employer contributions comes to approximately €44,972.46 for the year, because contributions stop at the monthly ceiling and the employer share ends up at about 12.4% of gross. Add twelve months of the fee and the total is about €52,160. The fee adds roughly 16% to the employment cost, a larger share than where salaries are higher, simply because Bulgarian pay and on-costs are modest. Our breakdown of employer cost in Bulgaria shows every line.

Split by month, the employer pays €3,732.86 for each of the first seven months of 2026 and €3,768.49 for each of the last five, the step up coming from the higher contribution ceiling that took effect on 1 August 2026. The fee sits on top of those figures under an EOR, and the accounting bill sits on top of them under an EOOD.

Those statutory amounts do not disappear with an EOOD. What you trade the fee for is formation, bookkeeping, payroll processing, banking and the time of whoever manages the company. Ask a Bulgarian accountant to quote a year’s work for a company with your planned headcount, then set that against the fee multiplied by the same number of people. With one or two hires the overheads are spread thin; as the team grows, more salaries share them.

Price in the cost of changing your mind as well. If the hire does not work out, or the market test ends, an EOR arrangement ends with the employment, under the Labour Code’s notice and compensation rules. A company you no longer need still has to be wound up. Our fee page explains what the monthly charge includes.

With an EOR, the earliest start date is set by the employment rules rather than by company formation. The contract is signed, the NRA entry follows within 3 days, always ahead of day one, and the employee is handed the certified copy. Our walkthrough of the EOR timeline in Bulgaria follows that sequence up to the first payslip.

With an EOOD, the same employment steps can only begin once the company is registered, its bank account is open and its NRA access works. If a candidate has already accepted, that gap is what you need to plan around.

The candidate’s own notice can matter more than either. Someone leaving another Bulgarian employer on an open-ended contract owes at least 30 days, so the date they can actually join may be fixed by their current contract under both routes. Hiring from outside the EU adds a permit application, such as an EU Blue Card (Синя карта на ЕС) decided by the Ministry of Interior’s migration authorities, and that runs to its own timetable whichever structure employs the person.

Neither route offers a shortcut past the register entry. Letting someone work before they have the certified copy is a breach the Labour Code fines per occurrence under Art. 414, and the fine applies to a brand-new EOOD exactly as it does to an established employer.

Plenty of employers begin on our payroll and incorporate when headcount grows. Legally, though, a switch means one employment ending and another starting: the contract with us ends, and your company signs a fresh one with its own NRA register entry.

Tell the employee early. A change of employer is a new contract they have to sign, and they will want to read it first. Keeping pay, job title, place of work and working time unchanged makes that conversation short.

Agree the dates so there is no gap in insurance and no double payroll. Unused annual leave is paid out when an employment ends (Art. 224), so either time the move after people have taken their holiday or budget for the payout.

Klas does not reset. The supplement follows recognised work experience, which includes previous work for other employers in the same or a similar job, so the years an employee spent on our payroll still count when your EOOD calculates it.

Think about probation before the switch. A new contract may include probation, which the Labour Code caps at 6 months, yet putting a proven employee back on trial sends the wrong signal, and leaving the clause out is usually the better call.

Pick the route that matches how settled your Bulgarian plans are. These signals usually point one way or the other:

• Lean towards an EOR if you are hiring one to five people and want them working before you commit to a company.
• Lean towards an EOR if nobody at head office has time to manage a foreign company, its bank and its accountant.
• Lean towards an EOOD if you will invoice Bulgarian customers, sign Bulgarian commercial contracts or hold equipment or premises there.
• Lean towards an EOOD once your headcount is large enough that the fixed company costs fall below the combined monthly fees.
• Lean towards an EOOD if you want your own company’s name on every employment contract.

Whichever way you lean, ask any provider how it handles a transfer when you outgrow it; it belongs on the shortlist of checks for picking an EOR in Bulgaria. If you would like to run your own numbers with us, send us the role and salary.