Most Bulgarian companies founded by foreigners are run by their owners. That raises a question every owner-manager meets in the first months: should the company pay you — and if it does, who insures you, Bulgaria or your home country? The answer depends on how you are paid and on where you live and work.
Your options
| How it works | Tax and contributions | |
|---|---|---|
| Paid management contract | The company and you sign a contract for managing it, with agreed pay | 10% income tax withheld; social and health contributions shared between the company and you, on pay up to the maximum insurable income |
| Self-insured owner | You work in your company without a paid contract | You pay social and health contributions yourself — about 28% — on an income you choose between the statutory minimum and maximum |
| Dividends only | You take the profit as dividends | 10% corporate tax and 5% on dividends; no contributions, but also no Bulgarian insurance from this |
The first two can apply at the same time. In the National Revenue Agency’s practice, a paid management contract and self-insurance are separate grounds, and both apply where you genuinely do both.
The management contract
A manager is not an employee: the relationship is a management contract, not an employment contract. In an EOOD, the owner approves the contract on the company’s side. Insurance under it starts only when pay is agreed in writing — a manager who works without agreed pay does not owe contributions on this basis. The company declares and pays the tax and contributions monthly, by the 25th of the following month, as it would for staff.
When you live in another EU country
EU rules insure you in one country only. As a rule, that is the country where you actually work: if you manage the company from your home in Germany or Spain, your home country’s social security usually applies, not Bulgaria’s — even though the company is Bulgarian. If you split your work between countries, the rules for people working in two or more states decide. Form A1, issued by the competent authority, confirms which system covers you. Settle this before the company starts paying you: getting it wrong can mean contributions in the wrong country and back payments in the right one.
When you live outside the EU
Bulgaria has social security agreements with some countries outside the EU that decide which system covers you. Without one, Bulgarian rules generally apply to pay under a management contract with a Bulgarian company, and your home country’s rules apply separately. Check both before agreeing pay.
Health cover
Bulgarian health insurance comes with Bulgarian contributions. If you are insured in another country, your cover comes from there. If you are insured nowhere, you need private insurance — which a residence permit usually requires anyway.
Salary, dividends or both?
Many owner-managers who live in Bulgaria combine a modest paid management contract — for health insurance and pension rights — with dividends for the rest. If you are insured in another country, dividends alone are often simpler. The tax comparison is in our guide to taking profits out of a Bulgarian company.
Questions clients ask
Can I have an employment contract with my own EOOD as its manager?
No. Management is done under a management contract, which, in an EOOD, the owner approves on the company’s side.
Is there a minimum amount on which contributions are due?
Yes. Contributions under a paid management contract are generally due on at least the minimum insurable income set each year for the company’s line of business, even if the agreed pay is lower. Your accountant applies the current figures.
Do I need a residence permit to be the manager?
No. A foreigner living abroad can be appointed manager. If you move to Bulgaria from outside the EU, being a manager does not in itself give you the right to live here — see our overview of residence options.
This guide is general information about Bulgarian law as it stood on the date of publication. It is not legal advice for your specific case. Unfamiliar terms are explained in our glossary.
