When do you graduate from an EOR to your own Bulgaria entity?

The table below uses EUR 545 as the illustrative EUR equivalent of the Teamed fee. This is illustrative only. The actual EUR amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.

All entity cost figures in this table are typical ranges. They cover outsourced payroll, bookkeeping, National Revenue Agency filings, and HR admin for a small Bulgarian OOD. They are illustrative, not law figures. Actual costs vary with your setup and benefits programme.

Employer social security in Bulgaria is not a single flat rate. It ranges from 18.92% to 19.62% (the 19.22% midpoint approximation) depending on the accident-at-work fund rate assigned to your economic sector. That rate applies on both sides of the comparison. At higher salary bands, the social security burden grows and the entity's fixed overhead amortises faster, shifting the crossover closer to 5 employees. At the minimum wage level, the crossover may push toward 7 or 8.

Pension contributions in Bulgaria are bundled within the social security total. There is no separate employer pension line outside that total rate. Run the Crossover Calculator with your own headcount and salary band.

1. Calculate the EOR cost

   Multiply the Teamed fee (from $599 USD) by your planned Bulgarian headcount. This is the fixed variable cost. It grows linearly as you hire.

2. Estimate the entity fixed overhead

   Typically EUR 2,000 to 3,200 per month for a small Bulgarian OOD. This covers payroll bureau, bookkeeping, NRA filings, NSSI declarations, and first-point HR. This cost does not grow significantly until headcount exceeds 15.

3. Find the crossover headcount

   The crossover is where EOR monthly cost equals entity monthly overhead. For most Bulgarian salary bands, this is around 5 to 7 employees. Use the Crossover Calculator for your own numbers.

4. Factor in non-financial triggers

   The maths gives you a headcount threshold. Tax-treaty substance, Bulgaria's flat 10% corporate tax rate, EU procurement requirements, and market-validation reversibility are separate questions that may override the cost crossover in either direction.

5. Plan the graduation date

   Allow 4 to 6 weeks for OOD formation before the first payroll on your own entity. Factor in 3 to 6 weeks extra for bank account opening with a Bulgarian commercial bank. Start the GEMO process while EOR continues running.

These are typical ranges. They are not law figures. There is no law that sets what a Bulgarian OOD costs to form. The range reflects real market rates for professional services and varies with how much corporate substance and legal detail your structure needs.

Bulgarian company law requires a minimum paid-in share capital of BGN 2 (approximately EUR 1) for an OOD. The nominal capital threshold is not the cost driver. Professional fees and bank account setup are.

The bank account bottleneck in Sofia

Bulgarian business bank accounts for foreign-owned entities have faced tighter due-diligence requirements since Bulgaria's EU anti-money-laundering alignment updates. Expect 3 to 6 weeks from application to an operational account at most Bulgarian commercial banks. If the parent company is not EU-incorporated, allow longer. This typically extends a 2 to 3-week OOD registration into a 6-week wait before the first payroll.

These figures are typical market ranges for a small Bulgarian OOD with 1 to 15 employees. They are illustrative. They are not law figures. Actual costs depend on whether you outsource or hire in-house, and how involved your payroll and benefits setup is.

Above 15 employees, dedicated Bulgarian HR capacity and an in-house finance function typically become worthwhile. The cost band widens at that point. Bulgaria's twice-monthly payroll obligation (the Labour Code requires salary payment at least twice a month) adds administrative frequency that raises the payroll service line for smaller setups.

Most cost comparisons skip the manager-liability dimension because it is hard to put a number on. It is worth naming before you decide.

Personal manager duties under Bulgarian law

Under the Bulgarian Commerce Act, the manager of an OOD must act in the company's best interests, maintain proper accounting records, file accurate annual financial statements with the Commercial Register, and ensure payroll and social security contributions are submitted on time to the National Revenue Agency (NRA).

A manager who signs accounts they have not reviewed is personally liable for any resulting misstatement. That liability is not transferable to an outsourced accountant. It stays with the named manager on the Commercial Register.

The compliance treadmill

• Annual financial statements: must be published in the Commercial Register by 30 June each year. Late publication carries fines up to BGN 3,000 for the company and personal liability for the manager.
• Corporate income tax return: due by 30 June following the tax year. Late filings attract penalties under the Tax and Social Insurance Procedure Code.
• NRA Declaration Form 1: due by the 25th of each month for payroll withholding. Each month is a separate filing.
• NSSI social security declarations: monthly, timed to payroll cycles. Bulgaria requires salary payment at least twice a month (Labour Code Art. 270), which compounds the declaration frequency for smaller setups.
• VAT returns: monthly for VAT-registered entities.

Each filing is individually manageable. Stacked across a year, they consume real management attention. An EOR carries all of these on its own entity. You carry none of them.

• Under 5 Bulgarian employees at average salaries: EOR is cheaper every month. The entity overhead of EUR 2,000 to 3,200 has nothing to amortise against at this headcount.
• Market validation phase: you are hiring 1 or 2 people to test commercial fit. Entity setup commits capital and management attention before you know whether Bulgaria will deliver revenue.
• Project-based hires: 6 to 18-month engagements where formation cost will not amortise before the project ends.
• Uncertain sector classification: Bulgaria's accident-at-work social security band varies by sector (0.4% to 1.1%). Until your sector is confirmed with the NSSI, the exact entity-side cost is a range. EOR removes that uncertainty entirely.
• Post-acquisition holding patterns: acquired teams you may restructure, where adding a Bulgarian entity creates wind-up overhead later.

• Sustained headcount above 7 Bulgarian employees at average salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
• Bulgaria as a service-delivery or technology hub: if Bulgaria is becoming a structural delivery centre for your business, not just a market-entry test, owning the entity gives you IP ownership, contracting flexibility, and direct NSSI contribution history for your team.
• Tax-treaty substance needs: some cross-border structures need actual Bulgarian substance in your own entity. EOR employment does not count as your substance for treaty purposes.
• EU entity requirements: certain EU procurement and regulatory frameworks require a locally incorporated entity. EOR employment via a third party does not satisfy those requirements.
• Senior leadership and long-term retention: Bulgarian employees on long-term indefinite contracts who will build teams, hold NSSI contribution histories with you, and expect continuity of employer will benefit from the stability of a directly owned entity.

The technical mechanic is contract novation: the employment contract transfers from Teamed's partner entity to your new Bulgarian OOD on a specified date. All terms carry across. Salary, leave entitlement, and continuous service date remain unchanged. The employee sees a different employer name on their payslip. Nothing else changes.

What we do operationally:

• Stand up your Bulgarian OOD through GEMO, around 4 to 6 weeks, while EOR continues running in parallel.
• Register the new entity with the NRA for payroll withholding and with the NSSI for social security contributions.
• Novate every active employment contract on a single effective date.
• Migrate ongoing NSSI contribution histories without any lapse.
• File final EOR-period declarations and open new NRA and NSSI accounts on the entity from the novation date.
• Provide the same People Ops specialist as the post-graduation primary contact.

The Graduation Model exists because the alternative is a hard stop, a gap in cover, and employees who feel unsettled by the change. We plan for the transition from the day you hire the first person through us.

Real HR and legal experts handle your Bulgarian hires from the first offer letter through every NRA declaration and NSSI submission. An actual person, not a pooled queue or a chatbot. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the social security line at 19.22% (midpoint of the 18.92% to 19.62% sector range), the leave accrual for 20 days, and a clear breakdown of sick pay obligations. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on one platform. When you are ready to graduate, we move you across without re-onboarding your team. Run the Crossover Calculator to see the month the model flips. Start from the Bulgaria hiring overview. Key sources: PwC Bulgaria Tax Summaries and Bulgarian Ministry of Economy remuneration guide.