Workforce Payments Guide Bulgaria

Last updated: Dec 26, 2023

Currency
Bulgarian Lev (BGN)
Payroll Frequency
Monthly
Capital
Sofia
Fiscal Year
1 January - 31 December
Employer Taxes
18.92% - 19.62%
Employee Costs
13.78%
Central Bank
Bulgarian National Bank (BNB)
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3rd Party Payments

Authority  Payment Frequency  Due Date  Payment Method 
Social Security  Monthly  25th day of the following month  Bank Transfer 
Income Tax  Annually  30th April of the following year  Bank Transfer 

Payments Coverage

Papaya Global Fully supports workforce payments in Bulgaria.

Contractor Payments

Papaya Global supports payments to contractors in Bulgaria. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. It is advised for contractors to reach out to their bank to confirm how foreign currencies are handled

Payroll Frequency

Monthly

IBAN

IBAN Example Bulgaria

BG96BNPA94404933382714

IBAN in print

BG96 BNPA 9440 4933 3827 14

Country Code BG
Digit Code 96
Bank Code BNPA
Branch code 9440
Account type 49
Bank account number 33382714

KYC

In Bulgaria, the Know Your Customer (KYC) process is essential for financial institutions to comply with Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT) regulations.

Customers typically undergo KYC verification using official identity documents or bank statements during account creation on a financial platform. This verification, initiated by the provider, is part of the registration process before any transactions can occur. The State Agency for National Security (DANS) oversees these anti-money laundering and terrorist financing measures.

The KYC process in Bulgaria includes several components:

  • Swift Identity Verification: Utilizes scanning and authentication of ID cards, Bulgarian passports, driving licenses, and credit/debit cards.
  • Facial Recognition and Document Authentication: Employs advanced facial recognition and document verification across 34 provinces.
  • Address Verification: Ensures business protection against false deliveries and invalid customer locations.
  • Customer Onboarding: Involves 2-factor authentication for accurate verification of end-users via mobile phones and real-time biometric consent.

The KYC is part of the broader Customer Due Diligence (CDD) process under the Prevention of Money Laundering Act (PMLA), requiring institutions to conduct standard CDD before starting any business relationship or conducting transactions. Depending on risk assessments, CDD measures may be simplified for low-risk customers or enhanced (ECDD) for high-risk customers, including identifying ultimate beneficial owners.

Any suspicious activity, as defined under PMLA, prompts institutions to act, especially if there’s a discrepancy in information obtained during CDD and KYC. Institutions are required to store all information from customer due diligence for five years after the end of the business relationship or transaction. This comprehensive approach ensures robust protection against financial crimes.

Banking Regulations

Banking Regulations

Cross-border workforce payments and international payroll in Bulgaria are subject to several regulations:

The European Banking Federation (EBF) guides the implementation of Regulation 518/20191, which amends Regulation 924/2009 concerning charges on cross-border payments in the Union and currency conversion charges.

Regulation (EU) 2021/1230 of the European Parliament and of the Council of 14 July 2021 on cross-border payments in the Union applies to payments initiated or terminated on paper or in cash, which are processed electronically during the payment execution chain.

The Bulgarian National Bank has an ordinance that revises the information and documents to be submitted to banks when executing cross-border transfers and payments to third parties whose equivalent is equal to or exceeds 30,000 BGN.

Bank Account Opening

The requirements to open a company bank account in Bulgaria include the following:

  • Identification documents of the persons opening the account.
  • The Certificate of Incorporation of the company.
  • The Articles of Association.
  • Specimen signatures and specific bank forms.
  • A minimum deposit of BGN 10.
  • A correspondence address and a certificate of good standing.
  • In the case of foreigners, a residence permit.
  • If the company is still in the process of registration, the shareholders or the sole owner must open a deposit account at a Bulgarian commercial bank to deposit their respective share of the initial capital.
  • A bank account can also be opened by a third party with a notarized power of attorney.
  • Non-resident companies must provide an apostilled certificate of good standing and a memorandum of association.

If a local notary is not an option, one could use the services of a Bulgarian embassy or consulate office abroad. A foreign notary is also an option, but in that case, the notarized document must also bear an apostille and be translated and legalized in Bulgaria.

The process requires the person’s presence for specific formalities and signatures in some banks, while others may allow the opening of a bank account online. The processing time for opening a bank account in Bulgaria usually takes a minimum of 3-5 working days for consideration, but it can take longer, depending on the bank’s regulations.

International Banks

The major foreign banks operating in Bulgaria are:

  • DSK Bank AD, which is a member of OTP Group (Hungary) and is owned by OTP Bank.
  • UniCredit Bulbank AD, which is a member of UniCredit Group (Italy).
  • United Bulgarian Bank AD, which was acquired from the National Bank of Greece by KBC, a Belgian banking and insurance group.
  • KBC Bank Bulgaria EAD, which was a fully consolidated subsidiary of Raiffeisen Bank International AG (Austria) until 2022, when it was acquired by KBC Bank Group (Belgium).
  • Raiffeisen Bank International (Austria).

Major Local Banks

The major local banks operating in Bulgaria are:

  • Allianz Bank Bulgaria AD
  • Bulgarian Development Bank
  • Bulgarian National Bank
  • Bulgarian-American Credit Bank AD
  • Central Cooperative Bank AD
  • D Commerce Bank AD
  • DSK Bank AD
  • Eurobank Bulgaria AD
  • First Investment Bank AD
  • International Asset Bank AD
  • Investbank AD
  • Municipal Bank AD
  • ProCredit Bank (Bulgaria) EAD
  • TBI Bank EAD
  • Texim Bank AD
  • Tokuda Bank AD
  • UniCredit Bulbank AD
  • United Bulgarian Bank AD

Payment Tools

The B2C payment tools available in Bulgaria include:

  • Credit and debit cards
  • e-wallets
  • Vouchers
  • Instant bank transfer
  • Mobile solutions

Specific tools include: Yettel Bulgaria, Pay by Vivacom, DSK Smart, Settle, PayPal, ecoPayz, Wise, Skrill, Paysafecard, and Neteller.

Additionally, the BLINK project for instant payments, SEPA Instant Credit Transfer (SCT Inst), card payments, and the lev payments system, BISERA6, are also available.

Cryptocurrency

In Bulgaria, it is not possible to pay employees under an employment contract with cryptocurrencies, as wages must be paid in fiat money. However, cryptocurrency transactions are permitted and are taxable, with income from these transactions treated as income from the sale of financial assets. This income must be declared in the annual tax return, with the appropriate tax paid.

The standard tax rate for personal income is 10%, but a higher rate of 15% is applied if the cryptocurrency transactions qualify as commercial activity. Those providing services for Bitcoin exchange or other virtual cryptocurrencies, as well as providers of digital wallets, are required to register with the National Revenue Agency and declare their activities.

Cryptocurrencies are not regulated by any financial supervisory body in Bulgaria and are not considered electronic money or financial instruments. Hence, cryptocurrency transactions do not need to be licensed or authorized by the Bulgarian supervisory authorities. Companies dealing with cryptocurrency must comply with the “Anti-Money Laundering (AML) Act”.

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