Start in Bulgaria

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From Las Vegas to Sofia: The Sweet Success Story of Hristo Mirchev

17. July 2025 / / 0 Comments

Starting a Business in Bulgaria – A Journey of Taste

In the dynamic world of culinary arts, there are few stories as shaped by determination and passion as that of Hristo Mirchev, founder and CEO of HM Chocolates in Sofia. Born in Bulgaria and raised in the US, Hristo moved back and forth between both countries – ultimately finding the perfect stage for his dream back in his homeland: building his own chocolate business. This blog article tells the story of his entrepreneurial journey in Bulgaria.

Dennis Kwiatkowski and Hristo Mirchev in front of HM Chocolates in Sofia, discussing starting a business in Bulgaria
Dr. Dennis Kwiatkowski and Hristo Mirchev in front of HM Chocolates in Sofia

From Political Theory to Sweet Dreams

The Unusual Career of a Bulgarian Entrepreneur

Hristo’s path was anything but straightforward. After completing high school in the US, he started studying political science at the American University of Bulgaria (AUBG). But he soon realized that his true passion lay not in theory, but in the kitchen. Back in the US, he trained as a chef and gained valuable experience – including positions at the JW Marriott in Las Vegas and several Michelin-starred restaurants in Denmark.

From Hobby to Business: The Birth of HM Chocolates

How a Small Idea Became a Real Business in Bulgaria

Back in Bulgaria, Hristo worked in the kitchens of renowned celebrity chef Andre Tokev. But it was his passion for chocolate – and a shared hobby with his girlfriend – that laid the foundation for HM Chocolates. What started as home experiments quickly evolved into a business idea with real substance.

“It’s much harder than it seems […] everything related to the bureaucracy of the process […] it’s not that easy to build a company.”

Hristo Mirchev

The bureaucratic challenges were significant. Permits and municipal regulations required persistence – but Hristo didn’t let that discourage him.

Successful Business Formation in Bulgaria: What Hristo Learned

From Idea to Execution – Practical Tips from First-Hand Experience

Hristo’s story is a great example of successful business formation in Bulgaria. Here are some key takeaways:

  1. Patience with Bureaucracy

Building a company in Bulgaria is doable – but sometimes complex. Success requires patience with administrative processes.

  1. Quality as a Unique Selling Point

Hristo’s uncompromising approach to quality clearly sets his products apart – a factor that’s essential in any industry.

  1. Think Big from Small Beginnings

What started as a hobby turned into a solid business model through hard work, strategic choices, and teamwork – including a café in Sofia.

Advantages and Challenges of Starting a Business in Bulgaria

Why Starting a Business in Bulgaria Can Pay Off – and What to Watch Out For

Advantages

  • Low Cost of Living and Operating Costs

Affordable rent, wages, and living expenses give founders a real head start.

  • Attractive Tax Structure

With a 10% corporate tax and 5% dividend tax, Bulgaria enables highly tax-efficient strategies.

  • Creative Entrepreneurial Culture

According to Hristo, Bulgarians are naturally entrepreneurial. While not every idea is fully thought out, there’s an inspiring climate for founders.

Challenges

  • Bureaucratic Hurdles

From local regulations to municipal approvals – getting fully operational can take time.

  • Non-Transparent Market Practices

Practices like paying wages under the table make competition harder for honest entrepreneurs like Hristo.

  • Differences in Customer Preferences

While younger Bulgarians are willing to pay for quality, older generations often prefer cheaper alternatives – a challenge for premium products.

A Look Ahead: Expanding with Flavor

Bulgaria as a Launchpad for Entrepreneurial Success

Hristo is already planning his next moves: B2B partnerships, event catering, and expanding the product line. Entering other European markets is also on the radar. But no matter how big HM Chocolates becomes, the recipe for success remains a mix of passion, quality, and vision.

A box of pralines from HM Chocolates
A box of pralines from HM Chocolates

Starting a Business in Bulgaria – More Than Just Tax Benefits

Hristo Mirchev’s story shows that starting a business in Bulgaria is not only possible – it’s worth it. Those willing to navigate bureaucracy, offer high-quality products or services, and position themselves wisely in the local market can go far. Hristo’s journey is more than a one-off success – it’s an inspiration for anyone ready to take a bold step forward with creativity and courage.

Check out our latest blog post: Want to know how other founders experienced their business formation in Bulgaria? 🇧🇬 Here you’ll find real success stories straight from the source:
https://startinbg.com/blog/unternehmer-in-bulgarien-erfolgsgeschichten/

The Bulgarian Registry Agency: An Overview

6. July 2025 / / 0 Comments

If you want to start a business, register a property, or access public records in Bulgaria, there’s one central hub you can’t miss: the official online portal of the Registry Agency.

It is available at https://portal.registryagency.bg/en/

This website is the digital heart of many bureaucratic and legal processes in Bulgaria and offers a wide range of services to both citizens and entrepreneurs.

What is the purpose of the Registry Agency’s website in Bulgaria?

The portal serves as a central platform for the management and access of state registers, especially:

  • the Commercial Register
  • the Register of Non-Profit Legal Entities
  • the Property Register
  • the central Register of Pledges

It is aimed not only at domestic users but also at foreign founders, investors, and companies that are or plan to become active in Bulgaria – people like you.

What services does the Registry Agency in Bulgaria offer?

The portal combines a wide range of functions and enables both registration and research in various areas. These include, among others:

  • Company formation
  • Submission of annual financial statements
  • Registration or modification of association data
  • Property register entries
  • Pledge register entries for movable assets
  • Public search for companies, individuals, properties, or register entries
  • Ordering of documents and official certificates
  • Electronic authentication
  • Access to forms, templates, and fee calculators

In which languages is the portal available?

The online portal is currently available in two languages:

  • Bulgarian (administration’s standard language)
  • English (for international users)

Although some detailed pages and functions (e.g., specific forms or instructions) are only available in Bulgarian, the English version provides a solid foundation for orientation and access to many of the services.

In future blog posts, we’ll take a closer look at individual functions of this portal. If you have a question, feel free to send it to us via our contact form.

Developing business ideas: The first step toward successfully starting a company

28. June 2025 / / 0 Comments

You want to start your own business – maybe even in Bulgaria? Then the first thing you need is a solid business idea. But what actually makes a good idea? Does it have to be new, revolutionary, or scalable? In this article, we’ll show you how to systematically develop business ideas – based on proven theories, practical methods, and concrete examples.

This article is part of our series on the startup process. In the next posts, we’ll cover: naming, types of business entities, opening a bank account, and how to secure a company address.

Why the origin of your business idea matters

Many aspiring founders start with a sudden flash of inspiration or a personal everyday problem. That can work – but often the idea lacks the depth to be further developed or explained, why you are the right person to execute it.

It’s often better to proceed in a structured way: Where is there real customer need? What are you particularly good at? How can you test risks early on? There are several theories that we’ll introduce to you in this blog post.

Image shows a young founder at a fork in the road. The image symbolizes the different decisions a founder can make to develop the right business ideas.

Theoretical Overview: How to develop business ideas

There is a wide range of literature and theory around how business ideas are developed and where good ideas actually come from. Here is an overview of some of the most common models:

TheoryCore MessageUsefulness for Idea Development
Opportunity TheoryEntrepreneurs discover opportunities when they identify a market gap and their own capabilitiesSharpens awareness for under- or unmet demand
Effectuation vs. CausationStart with available resources & partnerships (Effectuation) instead of fixed goals (Causation)Encourages starting small and adapting ideas along the way
Jobs-to-be-DonePeople “hire” products to complete specific tasksFocuses on real user problems rather than features
Blue Ocean StrategyCreate new value spaces instead of fighting in the red ocean of competitionProvides tools for differentiation
Resource- and Competency-Based ViewCompetitive advantages arise from unique resources (e.g., networks, IP, data)Checks if your idea is based on something hard to copy

In the following sections, we’ll dive deeper into these theories.

Developing business ideas with Opportunity Theory

Opportunity Theory in entrepreneurship research states:

Business ideas don’t emerge randomly – they come from recognizing and exploiting entrepreneurial opportunities.

Discovered vs. Created Opportunities

There are two schools of thought on how such opportunities arise:

  • Discovered Opportunities (Discovery Theory): e.g., new technologies, legal changes, supply shortages.

Examples: access to new technology like AI (think OpenAI) or supply chain shortages like the mask and toilet paper crisis during COVID. Those who are “alert” can spot these gaps before others.

  • Created Opportunities (Creation Theory): You actively develop something new – like a business model for an emerging trend.

An example would be Airbnb – “staying at someone’s home” created a whole new market beyond hotels, hostels, and classic vacation rentals.

In practice, many real-world business ideas are a blend of both. They often begin as a vague problem or weak signal and become clear opportunities through experimentation and development.

Opportunity Theory in Practice

In practice, the process often works like this:

  1. You recognize a market problem (e.g., outdated processes in an industry)
  2. You realize: You could solve it.
  3. You validate the idea – through testing, conversations, pilot clients

Example: A German expat in Bulgaria notices that there’s no proper tavern in Veliko Tarnovo (so far, I haven’t found one myself). He sees the opportunity, has the know-how and network, and makes it happen (if you’re reading this and feel inspired – we’re happy to support you). That’s a classic “discovered opportunity”.

Relevant academic literature includes:

Effectuation vs. Causation – Two Thinking Styles for Founders

Another helpful concept when developing business ideas comes from entrepreneurship researcher Saras Sarasvathy. She distinguishes between two ways of thinking:

Causation – Goal-Oriented Planning

You start with a clear goal (e.g., launching a catering business) and plan backwards: market analysis, business plan, funding, execution.

Typical of MBA programs and large corporations.

Effectuation – Resource-Based Action

You start with what you have: your skills, your network, your knowledge. From that, you gradually build your business model.

Typical of founders with little capital, lots of flexibility, and a willingness to experiment.

Our tip: Combine both! Start with Effectuation – iterative, lean, and low-risk. Once you gain traction, you can shift to Causation for further professionalization.

Relevant academic literature:

Sarasvathy, S.D., 2001. Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2), pp.243–263.

Developing Business Ideas with the Jobs-To-Be-Done Approach

One of the most customer-centric methods for developing business ideas is the Jobs-to-be-Done (JTBD) approach, made famous by Clayton Christensen.

“Competing Against Luck” – The Jobs-to-Be-Done Strategy by Clayton M. Christensen (Author) and Ebert Neumüller (Translator) on Amazon

The idea: People don’t buy products or services for their features – they buy them to make progress in their lives.

Example: No one wants “a drill.” What they really want is a hole in the wall. Or more accurately: they want to mount a shelf to create order or feel good at home.

Jobs-to-be-Done in Practice

Ask yourself:

  • What are people in my target group really trying to achieve?
  • Where are they currently struggling?
  • What are they dissatisfied with?

The better you identify these “invisible jobs,” the better you can create an offer that delivers real value.

Here’s a video of Clay Christensen on the HubSpot Marketing YouTube channel:

Blue Ocean Strategy – Developing Business Ideas Through New Markets

Another way to develop business ideas is the so-called Blue Ocean Strategy, developed by W. Chan Kim and Renée Mauborgne. Their central message is:

Instead of competing with others, create your own market.

“Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne, translated by Ingrid Proß-Gill – available on Amazon

In the “red ocean,” everyone fights for the same customers. In the “blue ocean,” you address a new target audience, combine services differently, or eliminate unnecessary industry standards.

Helpful questions (ERRC method):

  • Eliminate: What can you drop that everyone else does?
  • Reduce: What can you simplify or make cheaper?
  • Raise: Where can you raise the standard?
  • Create: What can you create that’s entirely new?

Again, take Airbnb. They didn’t copy the hotel market – they created a new niche between private apartments and short-term rentals, for travelers who wanted to stay differently.

The Resource and Competence View – Use What Makes You Unique

Many founders make the mistake of focusing too much on their weaknesses: “I have no capital,” “I don’t have experience with XYZ.” But often it’s much more effective to build on your strengths – that’s exactly what the resource and competence view recommends.

Ask yourself:

  • What am I especially good at?
  • What experience do I have that others don’t?
  • What network can I access?
  • What problems can I solve without much money?

Goal: Build a business model that fits you – and is hard to copy.

Developing Business Ideas Is a Process – Not a Lightning Bolt

The best business ideas are rarely flashes of genius in the shower. They are the result of a structured process: You observe, combine, test, fail, improve – and in the end, you have an offering that works.

If you’re founding – especially abroad in a place like Bulgaria – it’s worth taking a realistic look: What do you really need to get started? Who are your first customers? What problem might only you be able to solve? And how can you start small without overwhelming yourself?

Bulgarian taxes: overview of the tax system, rates, and special features

27. June 2025 / / 0 Comments

Bulgaria is not only known for its low cost of living and beautiful nature – the tax system in Bulgaria is also considered one of the most attractive in the European Union. Whether you are a private individual or entrepreneur: if you generate income in Bulgaria, you should be familiar with the main types of taxes, their rates, and their specific rules. In this article, we provide a structured overview of Bulgarian taxes.

What Types of Taxes Exist in Bulgaria?

In general, the Bulgarian tax system distinguishes between direct and indirect taxes. The most important types of taxes include:

  • Value Added Tax (VAT)
  • Personal Income Tax (for individuals)
  • Corporate Income Tax (for legal entities)
  • Withholding Tax (on dividends)
  • Inheritance Tax

In addition, there are other levies such as municipal tax, vehicle tax, property tax, and customs duties, which we may cover in a separate article.

Entrepreneur on a mountain overlooking Sofia, the capital of Bulgaria. The scene evokes a sense of limitless possibilities – perhaps because he understands the topic of Bulgarian taxes.

Value Added Tax in Bulgaria (VAT)

Value Added Tax is comparable to the VAT systems of other EU countries. It applies to the sale of goods and services.

Rates and Thresholds

  • Standard VAT rate: 20%
  • Reduced VAT rate: 9% – applies to hotel stays, books, baby food, restaurant visits, and food delivery
  • Small Business Threshold: Companies with an annual turnover of more than 100,000 BGN (approx. 51,000 EUR) must register for VAT. In the past, this threshold was temporarily increased.

VAT Deduction and Refund

Companies entitled to deduct VAT can offset the VAT they paid with the VAT they collected. If there is an overpayment, a VAT refund can even be requested.

Personal Income Tax in Bulgaria

Personal income tax in Bulgaria applies to individuals – employees and freelancers. It is simple and highly attractive.

Flat Tax vs. Progressive Model

A flat tax rate of 10% applies in Bulgaria – regardless of income level. Whether someone earns 1,000 BGN or 1,000,000 BGN: the tax rate remains 10%. This stands in stark contrast to the progressive tax system in Germany.

Benefits for the Self-Employed

Some self-employed individuals benefit from even lower contribution rates – sometimes as low as 6% to 7.5%. However, special rules apply here, which we will explain in a separate blog post.

Corporate Tax in Bulgaria

Corporate income tax applies to legal entities such as limited liability companies (EOOD, OOD) and joint stock companies (AD) in Bulgaria.

Tax rate: 10% on profits

This makes Bulgaria one of the countries with the lowest corporate tax rates in the EU.

Example Calculation – Corporate Tax:

A company with:

  • 300,000 EUR in revenue
  • 200,000 EUR in expenses
  • = 100,000 EUR profit

would pay only 10,000 EUR in corporate tax and retain 90,000 EUR in the company.

Withholding Tax on Dividends

If a company distributes its profit to shareholders, a withholding tax on these dividends applies.

Tax rate: 5%

Example Calculation – Withholding Tax:

From the 90,000 EUR profit in the above example, 4,500 EUR would go to the tax office. Shareholders would receive a net amount of 85,500 EUR.

Low Total Tax Burden

The combination of a 10% corporate tax and a 5% withholding tax results in a total tax burden of just 15% – a significant advantage compared to countries like Germany, where capital gains alone are taxed at 25%, and the total burden can approach 50%.

Inheritance Tax in Bulgaria

An especially interesting aspect is the inheritance tax – or rather, its near absence.

Who Pays Inheritance Tax and Who Doesn’t?

  • Spouses, parents, and children: pay no inheritance tax, even on multi-million estates
  • Siblings, nieces, and nephews: pay small rates between 0.4% and 0.8%, depending on the municipality – but only on inheritances above 250,000 BGN.
  • Distant relatives or third parties: pay between 3.3% and 6.6% – again, only on amounts exceeding 250,000 BGN.

The tax is levied by municipalities, which can lead to regional differences.

Bulgarian Taxes Are Simple and Attractive

The Bulgarian tax system is particularly attractive for entrepreneurs, digital nomads, and expats. The combination of low flat rates and a simple structure makes Bulgaria one of the most tax-friendly countries in the EU.

If you want to start a business or settle in Bulgaria as a private individual, you’ll benefit from:

  • Flat tax of 10% for personal income
  • 10% corporate tax for businesses
  • 5% withholding tax on dividends
  • No inheritance tax for immediate family

Next Steps

Want to learn more about starting a business, taxes, and life in Bulgaria? Then subscribe to our newsletter or get our e-book “Start in Bulgaria” to find out how to start your own business in Bulgaria.

Bulgarian company types at a glance: Which legal form is right for your project?

25. June 2025 / / 0 Comments

Why choosing the right legal form for your company in Bulgaria is so important

Anyone wishing to start a business in Bulgaria faces an important decision: which legal form is the right one? Bulgarian business forms offer a wide range of options, from simple freelance activities and traditional trading companies to more modern forms with variable capital. However, each Bulgarian business form has different legal, tax, and economic implications.

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Bulgarian company forms – what are they?

There are a wide variety of company forms in Bulgaria. As a German entrepreneur, the selection is quite familiar, as they are strongly based on the German system – some would even say that the Bulgarians simply copied and translated the German system. In the meantime, other forms have been added due to EU regulations. Below, we provide an overview of the various forms – it should be noted that most foreigners opt for the (E)ODD, but ultimately the decision is up to you and your situation.

Freelancer or tradesman (BULSAT): The easiest way to get started

Suitable for: Individuals who want to work independently without a large infrastructure – e.g. craftsmen or creative professionals

Bulgarian: БУЛСТАТ

Legal basis: BULSAT Act

Any natural person who carries out an economic activity in a non-commercial form must register with the BULSAT register. Whether you are a craftsman, yoga teacher, or graphic designer, as long as you want to work on your own account, you are required to register within one week of starting your activity.

Important: Proof of your qualifications (diploma, certificate) should be included with your registration.

Advantages:

  • Low start-up barriers
  • No capital contribution required/minimum capital
  • Tax-friendly

Civil law partnership (GbR): Start together without a corporation

Suitable for: Two or more persons with a common economic goal, e.g. for projects that do not require registration in the commercial register.

Bulgarian: Гражданско дружество

Legal basis: Art. 357 ff. Zakon za zadalzhenijata i dogovorite (Law on Contracts and Obligations)

The shareholders contribute money, assets, and expertise and share joint ownership and risk. Unless explicitly stated otherwise, all shares are distributed equally.

Advantages:

  • No entry in the commercial register required
  • Flexibly configurable partnership agreement
  • Uncomplicated taxation
  • No capital contribution requirement/minimum capital

Please note: The shareholders are personally liable – there is no protection through limitation of liability.

Sole trader (ET): Personally liable entrepreneur

Suitable for: Sole founders with permanent business operations that require a commercial structure.

Bulgarian: Едноличен търговец (ET)

Legal basis: Commercial Code

In contrast to the BULSAT trade, this is a genuine commercial status. Registration in the commercial register is mandatory, and as a sole trader, you are liable with your entire assets, both business and private.

Advantages:

  • No capital contribution requirement/minimum capital
  • Quick start

Please note: Full liability with private assets

General partnership (OHG): Cooperation with full responsibility

Suitable for: Founding teams with equal responsibility who want to run a commercial business together.

Bulgarian: Събирателно дружество (с-ие)

Legal basis: Commercial Code

The OHG is founded by at least two persons who are personally and jointly and severally liable. Registration in the commercial register is mandatory.

Advantages:

  • No capital contribution requirement/minimum capital
  • Simple structure
  • Strong entrepreneurial commitment

Please note: Full liability of each partner

Limited partnership (KG): Involve investors with limited liability

Suitable for: Combination of active founders (general partners) and passive investors (limited partners).

Bulgarian: Командитно дружество (КД)

Rechtsgrundlage: Commercial Code

The KG allows investors with limited risk to be involved without granting them a say in the company as in a GmbH. The general partners bear full liability, while limited partners are only liable up to the amount of their contribution.

Advantages:

  • Flexible participation models
  • Attractive for friends and family investors

Please note: Often not suitable for institutional investors

OOD & EOOD: The most popular Bulgarian company form

Suitable for: Anyone who wants to work with limited liability, whether alone or in a team.

Bulgarian:

  • Limited liability company: Дружество с ограничена отговорност (ООД)
  • Single-member company: Еднолично дружество с ограничена отговорност (ЕООД)

Legal basis: Commercial Code

Minimum capital: BGN 2 (approx. EUR 1)

The (E)OOD is by far the most popular legal form in Bulgaria, especially for small and medium-sized enterprises. Shareholders of an (E)OOD are only liable for their capital contribution. The company is established by entry in the commercial register.

Advantages:

  • Limited liability
  • Easy to get started
  • Only $2 minimum capital required

Disadvantages:

  • Accounting requirements
  • Corporate income tax liability

Variable capital company (DPK): Flexible for start-ups

Suitable for: Start-ups with investors who want to allocate shares flexibly

Bulgarian: Дружество с променлив капитал (ДПК)

Legal basis: Commercial Code

The DPK is a new hybrid form of partnership and corporation. What makes it particularly interesting is that the capital does not have to be entered in the commercial register, which makes it easier to implement employee participation schemes, for example.

Conditions:

  • Max. 50 employees
  • Max. BGN 4 million in turnover or assets

Advantages:

  • Innovative participation models possible
  • Quickly scalable
  • Ideal for venture capital

Please note: If the limits are exceeded, the DPK must be converted into an OOD.

Stock corporation (AD): For large projects with capital requirements

Suitable for: Companies with high capital requirements and many shareholders

Bulgarian: Акционерно дружество (АД)

Minimum capital: 50,000 BGn (approx. 25,000 EUR)

Legal basis: Commercial Code

The AG in Bulgaria is highly formalized. It is suitable for IPOs, large capital investments, or holding structures. Shareholders are not personally liable; the risk is limited to the company’s assets.

Advantages:

  • Clearly defined structures
  • High reputation
  • Suitable for expansion

Disadvantages:

  • Complex establishment
  • High capital requirements

Which Bulgarian company form is right for you?

Choosing the right company form in Bulgaria depends largely on your individual situation. Here is some help to get you started:

Your situationSuitable company form
You are a creative freelancerBULSAT
There are two or more of you and you are starting without a commercial structureGbR
You are alone, want your own simple business and are willing to take risksSole trader
There are two or more of you and you want to act together but also be jointly liableOHG
You are looking for an investor model with limited liabilityKG
You want to start with limited liabilityEOOD/OOD
Your goal is a scalable start-upDPK
You need a lot of capitalAG

Bonus: Further information and support

If you want to delve deeper or need support with the start-up process, we recommend our book “Start in Bulgaria”. It contains step-by-step instructions, drafts, and practical tips for getting started.

Get your copy at Amazon!

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