Some contruction companies are thinking of moving their companies to Bulgaria

Some contruction companies are thinking of moving their companies to Bulgaria
Some contruction companies are thinking of moving their companies to Bulgaria

Builders in the south of the country have begun considering registering their companies in Bulgaria. Market sources say that several builders are thinking of registering their companies in the neighboring country starting May 1. Bulgaria and Hungary are part of the European Union, so companies can continue to operate in the Romanian market, but the taxes would be lower, according to the cited source.

Romanian entrepreneurs are increasingly inquiring about the procedural aspects of company registration in Bulgaria, Denislav Ivanov Marinov, a lawyer from Ruse, told us.

Managers have questions and requests, but everything is still in the preliminary phase of researching and comparing the advantages and disadvantages of relocation.

Changes in the Romanian construction sector

In the construction sector in Romania, the first month of this year brought significant changes with the complete elimination of tax facilities for employees. The increase in labor taxation has led either to a decrease in employees' net salaries or to higher company expenses for increasing gross salaries to maintain net earnings.

In this context, entrepreneurs are looking for options to cope with the situation.

The main advantages for Romanian entrepreneurs registering a company in Bulgaria

Consultants from Zara Consult, one of the largest accounting firms in Bulgaria and a member of the Bulgarian-Romanian Chamber of Commerce, claim that Bulgaria offers several advantages to entrepreneurs who want to register their companies there, including:

Lower taxes

First of all, the corporate tax rate in Bulgaria is 10%, a flat rate. The tax on dividends is 5%. These taxes apply to all types of companies, whether small, medium, or large enterprises.

For comparison, in Romania, the corporate tax is 16%, and the dividend tax is 10%. Additionally, above a certain threshold, 10% of the net amount withdrawn as a dividend is paid for the health insurance contribution.

Meanwhile, micro-enterprises in Romania pay an income tax of 1% if their revenue does not exceed €60,000, or 3% if their revenue is between €60,000 and €250,000 (approximately the cost of building a house). From January 1, 2026, this threshold will be lowered to €100,000.

At a turnover exceeding €250,000 (or €100,000 next year), the company becomes subject to a 16% corporate tax.

Lower labor costs

The gross minimum wage in Bulgaria, as of January 1, 2025, is 1,077 BGN (€550 / 2,737 RON), from which the employee pays certain contributions to the state.

Employers also pay additional contributions, but the overall tax burden is lower than in Romania:

Employee deductions: 8.38% for the pension fund, 3.2% for health insurance, and 10% for income tax, totaling 241.87 BGN.
Employer contributions: 13.72% for social security, 0.5% for accident insurance, and 4.8% for health insurance, totaling 204.85 BGN.
Total contributions (employer + employee): 446.11 BGN (34.8%).
Net minimum wage: 835.74 BGN (€426 / 2,125 RON).
Total employer cost per employee: 1,282 BGN.
In contrast, in Romania in 2025, the gross minimum wage in construction is 4,582 RON per month, to which a 2.25% labor insurance contribution (103 RON) is added, bringing the total employer cost to 4,685 RON.

After paying 10% income tax, 25% social security, and 10% health insurance, the net minimum wage is 2,739 RON.

This means that in Romania, 42% of the employer's total costs go to the state, compared to 34.8% in Bulgaria.

Additionally, Zara Consult consultants highlight that in Bulgaria, social contributions are only applied up to a maximum salary cap of €1,900, meaning the maximum cost per employee does not exceed €630, regardless of salary. In Romania, social contributions apply to the entire income.

Other advantages of relocating to Bulgaria

Beyond lower labor costs, the Schengen accession of Bulgaria and Romania has further simplified business operations and reduced expenses by eliminating border controls.

Other key benefits include:

  • Fast company registration (3–4 working days).
  • No strict minimum capital requirements (1 euro).

Labor Inspectorate: Bulgarian companies operating in Romania must comply with local labor laws

Regardless of the law applicable to the employment relationship, employees posted to Romania benefit from the working conditions set by Romanian legislation, Mihai Nicolae Ucă, Deputy State Inspector General at the Labor Inspectorate, told us.

If a sector-wide collective labor agreement is in place, posted employees also benefit from its provisions.

Furthermore, employees posted in Romania must receive remuneration applicable in Romania, including:

  • Overtime pay.
  • Transport, accommodation, and meal allowances for job-related travel.
  • Obligations of Bulgarian construction companies posting employees to Romania

Bulgarian companies posting employees to Romania must:

Submit a declaration in Romanian to the territorial labor inspectorate before employees start work.
Keep and provide the following documents in Romania during the posting period: 
Employment contract or equivalent document.
Salary details and proof of payment.
Work schedule and attendance records.
Provide these documents to the Labor Inspectorate within 20 working days if requested.
Ensure Romanian translations of relevant documents.
Appoint a liaison person to communicate with Romanian authorities.
Additionally, foreign companies operating in Romania must comply with occupational health and safety regulations.

Industries where Romanian companies are registering in Bulgaria

According to Zara Consult, the most common sectors for Romanian entrepreneurs registering companies in Bulgaria include:

Construction and infrastructure – lower taxes and reduced labor costs.
Trade and distribution – Bulgaria serves as a strategic hub for imports/exports.
IT and outsourcing – attractive tax regime and a skilled workforce.
Renewable energy – Bulgaria offers incentives for wind and solar energy investments.

According to lawyer Denislav Ivanov Marinov, the most common reason for company registrations in Bulgaria is vehicle ownership transfers from Romania or other EU countries. Another major category is construction materials trading, which ranks third in popularity.

Autor: https://arenaconstruct.ro/unii-constructori-se-gandesc-sa-isi-mute-firmele-in-bulgaria/