This article provides a focused overview of the availability and conditions of the sole proprietorship business status in Bulgaria in 2025. Covered topics include registration, tax treatment, social security obligations, and specific eligibility criteria for individuals interested in the Едноличен търговец (ET) or Sole Trader status.
Availability of Sole Proprietorship Status in Bulgaria
Bulgaria offers an established legal structure for individual business operation known as Едноличен търговец (ET), directly translatable as Sole Trader or Sole Proprietor. This status is widely accessible to Bulgarian citizens and nationals of EU or EEA member countries.
The ET status is a practical option for those seeking to conduct business activities and invoice clients directly, without the need to establish a separate legal entity. The business and the owner are legally inseparable, meaning all obligations and liabilities remain with the individual.
Key Features of the ET (Sole Trader) Status
| Aspect | Details |
|---|---|
| Status Name (Bulgarian / English) | Едноличен търговец (ET) / Sole Trader |
| Who Can Register | Bulgarian citizens; EU/EEA nationals |
| Legal Separation | No separate legal entity; personal liability |
| Registration Authority | Bulgarian Commercial Register |
| Typical Use Cases | Freelancers, small traders, service providers |
Taxation & Social Security for Sole Proprietors in 2025
The tax framework for ETs in Bulgaria is straightforward. Income derived from business activities as a Sole Trader is taxed as personal income, subject to a flat tax rate. Social security contributions apply, calculated on declared income with minimum and maximum thresholds.
| Tax/Contribution | Rate / Requirement (BGN) | Rate / Requirement (USD) (1 BGN ≈ $0.56 as of January 2025) |
|---|---|---|
| Personal Income Tax | 15% | 15% |
| Social Security Contributions* | On declared income (minimum/maximum thresholds apply) | On declared income |
| Patent Tax (optional regime) | Annual turnover up to BGN 50,000 | Up to ~$28,000 |
*Full calculation rules and thresholds can be found only on official government portals; specific rates vary by income levels.
Brief Explanation of Tax Regimes
- Standard Regime: All net business profits as an ET are taxed at a flat rate of 15%.
- Patent Tax Regime: ETs whose turnover does not exceed BGN 50,000 (~$28,000) in a calendar year and who engage in specific business activities may opt for the simplified patent tax regime.
Mandatory social security contributions must also be paid, with the contribution base subject to statutory minimum and maximum thresholds depending on one’s declared income.
Registration Procedure and Responsibilities
Registration for ET status is completed through the Bulgarian Commercial Register, which is administered by the Registry Agency. The owner’s personal liability includes all debts and obligations of the ET, as there is no legal separation between the individual and the business.
Once registered, the ET must keep proper business records and comply with relevant tax and social contribution filings every year in accordance with Bulgarian law.
Frequently Used by Freelancers and Small Traders
ET status remains a preferred structure in Bulgaria for professionals seeking a cost-efficient, flexible way to conduct business. Its popularity stems from relatively simple setup procedures and compliance obligations compared to other business forms.
Official Sources
Pro Tips: Setting Up as a Sole Proprietor in Bulgaria
- Keep in mind that all business debts and liabilities will remain your personal responsibility as an ET.
- If your yearly turnover is expected to be under BGN 50,000 (~$28,000), check if your business activity qualifies for the simplified ‘patent tax’ regime to streamline tax filings.
- Register promptly at the Commercial Register and ensure that income and social security contributions are declared accurately based on official thresholds.
- Stay informed through the National Revenue Agency for updates on rates and compliance obligations each year.
In summary, Bulgaria’s sole proprietorship (ET) is widely available to citizens and EU/EEA nationals, offering a direct path to business activity without a complex corporate setup. The tax environment is straightforward, with a flat 15% personal tax rate and the option of a patent tax regime for eligible small businesses. However, personal liability remains unlimited, making careful compliance and understanding of obligations essential for all ETs in 2025.