Freelance in Bulgaria: Essential Legal Aspects for Digital Nomads

Digital nomadism is revolutionizing the way we work and live, offering unprecedented freedom and flexibility. Bulgaria is becoming an increasingly popular destination due to its affordability, spectacular landscapes, and rich, diverse culture. However, it’s essential to understand the legal aspects before starting to freelance in Bulgaria or start a company in Bulgaria. 

This article explores the main legal considerations for digital nomads who wish to settle in this fascinating country.

Why Is Bulgaria Attractive for Freelancers and Digital Nomads?

Bulgaria offers a relatively low cost of living, a fascinating culture, and a well-developed digital infrastructure. Cities like Sofia, Plovdiv, and Varna boast reliable internet connections and a growing network of co-working spaces, making them particularly appealing to remote workers. The temperate climate and variety of natural landscapes, from majestic mountains to the stunning Black Sea beaches, make Bulgaria an ideal place for both work and leisure.

One of the most attractive aspects of Bulgaria for freelancers is its flat 10% income tax rate, one of the lowest in Europe. This makes Bulgaria a very competitive option for digital nomads looking to optimize their tax situation. However, there are several key considerations to keep in mind:

• If your earnings exceed 50,000 BGN (approximately 25,000 EUR), you need to register for VAT. Even below this threshold, you can register voluntarily.
• You will need to file an annual tax return. It is crucial to maintain accurate accounting to avoid penalties, preferably with the help of an experienced accountant in Bulgaria like Accountancy Bulgaria, who can also suggest the best type of company for your needs, to maximize earnings and keep your business fiscally secure.
• Freelancers must pay social security contributions to access public healthcare and other social benefits.

Additionally, once settled in Bulgaria, you will need to open a local bank account to manage your income and expenses. Many Bulgarian banks offer accounts specifically tailored to freelancers and small businesses.

Read also: Bulgarian Accounting Act: New Rules and Obligations

Freelance in Bulgaria: Visa and Residence Permit

One of the most important aspects for digital nomads wanting to move to Bulgaria is understanding the visa and residence permit requirements.

• EU/EEA Citizens: EU or EEA citizens can enter Bulgaria without a visa and stay for up to 90 days within a 180-day period. For longer stays, you must apply for a Temporary Residence Permit (TRP), which requires proof of your work activity or financial self-sufficiency.
• Third-Country Nationals: Non-EU citizens can apply for a Type D visa to perform freelance work in Bulgaria. This requires documents proving your business activity, income, and residence.
• Local Registration: If staying longer than 90 days, you must register with local authorities within 30 days of your arrival. This process includes providing a valid address and obtaining a Foreigner Registration Certificate.

Freelance in Bulgaria: Mistakes to Avoid

When freelancing in Bulgaria, it’s easy to make mistakes, especially if you are new to the country’s legal and tax systems. Here are some tips to avoid issues:

• Don’t Ignore Registration: It is crucial to register with local authorities within the stipulated timeframe. Failing to do so can result in fines and legal complications.
• Keep Accurate Records: Maintain all documents related to your income and expenses. This is especially important for tax filings and to avoid issues during tax audits.
• Understand the Social Security System: Not paying social security contributions can jeopardize your access to healthcare and other benefits. Make sure you know the amount and deadlines for payments.
• Be Mindful of Tax Deadlines: Deadlines for tax returns and payments are strict. Missing them can lead to hefty penalties.
• Consider Private Health Insurance: While the public system provides a basic level of care, private health insurance can ensure quicker and higher-quality access to medical services.

Read also: How to Set Up and How a Joint Stock Company Works in Bulgaria

Conclusions

Bulgaria is an excellent choice for digital nomads seeking an affordable environment, good quality of life, and a favorable tax system. However, it’s essential to understand and comply with local regulations to avoid legal issues and ensure a smooth stay.

From visas to taxes, social security contributions, and banking considerations, each aspect should be approached carefully and with preparation, preferably with the help and support of industry experts like Accountancy Bulgaria.