KYC in Bulgaria: what businesses need to know

In the context of company formation in Bulgaria, alongside tax and administrative aspects, compliance with anti-money laundering regulations plays a central role. Among these, KYC (Know Your Customer) procedures represent one of the main tools to ensure transparency and traceability in business relationships.

KYC is not a one-off requirement, but a structured and ongoing process involving banks, professionals and corporate service providers. Understanding how it works allows businesses to manage onboarding more efficiently and avoid operational delays.

The operational meaning of KYC in Bulgaria

KYC represents the practical application of EU anti-money laundering regulations, implemented in Bulgaria through the Measures Against Money Laundering Act (MAMLA). It is a standardised system across the EU, based on a risk-based approach.

Every time a company interacts with a regulated entity—such as a bank, accountant, notary or lawyer—a verification process must be completed. This means that the same entity may undergo similar checks multiple times, as each institution is required to perform independent verification.

For foreign investors and cross-border businesses, this repetition may seem redundant, but it is a mandatory regulatory requirement.

Read also: EU Pay Transparency Directive in Bulgaria: what will change by 2026

KYC in Bulgaria: obliged entities and scope of application

Bulgarian legislation defines several professional categories as “obliged entities”, responsible for conducting KYC checks both before and during a business relationship.

These include:

• banks and payment institutions
  
• accounting and auditing firms
  
• law firms and notaries
  
• corporate service providers
  

A key aspect is the lack of automatic data sharing between these entities. Even if a bank has already performed KYC checks, an accountant will still be required to repeat the process.

What is verified during the KYC process 

KYC procedures focus on four key elements: identity verification, ownership structure, nature of the business relationship and ongoing monitoring.

For individuals connected to the company—such as shareholders, directors and beneficial owners—valid identification documents and proof of address are typically required. In higher-risk cases, additional information on the source of funds may also be requested.

From a corporate perspective, standard documentation includes an updated extract from the Bulgarian Commercial Register, articles of association, shareholder register and relevant corporate resolutions. For foreign entities, equivalent documentation with certified translations is required.

Read also: Accounting for e-commerce businesses in Bulgaria: tax obligations and compliance requirements

The central role of the Ultimate Beneficial Owner (UBO)

Identifying the ultimate beneficial owner is one of the most critical aspects of the KYC process. Obliged entities require a full mapping of the ownership structure, identifying individuals who directly or indirectly hold more than 25% of shares or voting rights.

Beyond formal data, the entire control chain is analysed, including indirect holdings and multi-layer structures. Even if UBO data is registered in official registers, this does not eliminate the need for additional checks.

Maintaining a clear and updated ownership structure is therefore essential.

Enhanced due diligence: when controls increase

KYC in Bulgaria follows a risk-based approach. In certain situations, enhanced due diligence (EDD) applies, requiring additional documentation.

This may occur in cases involving complex corporate structures, high-risk jurisdictions, politically exposed persons or businesses with high cash flows.

EDD does not necessarily indicate a problem, but it may extend verification timelines, especially in cross-border scenarios.

KYC in Bulgaria: An ongoing process, not a one-time check

KYC is continuous. Verification does not end after onboarding but continues throughout the business relationship.

Entities must periodically update information, monitor structural changes and reassess risk profiles. This is why additional documentation may be requested even years later.

For businesses, this means maintaining updated records and responding promptly to requests to avoid delays or compliance issues.

Properly managing KYC procedures in Bulgaria requires organisation, attention and knowledge of local regulations.

Accountancy Bulgaria, company advisor in Bulgaria, supports companies in handling compliance requirements, reducing risks and ensuring efficient onboarding and ongoing regulatory compliance.