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Guide

Starting a startup in Bulgaria: a step-by-step legal guide

The legal decisions every startup makes, in the order you make them: from the idea and co-founders through incorporation, tax, hiring and contracts to investors.

Vladimir Toshev(Co-founder · Legal research)8 min read

Startup law is not a separate statute. It is how ordinary rules - company, tax, employment and contract law, plus EU regulation - apply to a business that grows fast, looks for investors and works with code and data. This guide puts them in the order every startup meets them, and for each stage points to our detailed article.

If you are looking for an act-by-act overview instead, see Bulgarian laws every startup should know.

1. Before you register: the idea, co-founders and code

The most expensive legal mistakes are made before the company exists. Two or three people decide to work together, split the shares equally or "by feel" and write nothing down. Bulgarian law has an answer to what happens if one of them stops working or leaves - and it is rarely the one founders expect.

2. Incorporation: legal form and structure

Choosing between an OOD, EOOD, AD and a variable capital company (DPK) looks technical, but it decides how easily an investor can come in and how you can give your team options. An OOD is cheap and quick, but every share transfer goes through a notary.

3. First revenue: tax

The 10% corporate rate is the first thing anyone hears about Bulgaria and the last thing that matters when the bill arrives. The real problems come from VAT registration under Art. 97a when you pay foreign suppliers, from how founders take money out (salary or dividend), and from team options.

4. First hires: employment law

Your first employee or freelancer brings your first inspection risk. The notice of the employment contract has to reach the revenue agency before the person starts work; a non-compete in an employment contract is void; and a civil contract that looks like employment can be reclassified.

5. First customers and suppliers: contracts

With businesses, the law treats you as an equal professional - every clause you sign holds. With consumers it is the opposite: the law protects them and checks your terms, the withdrawal right and the warranty.

6. Launching in the EU: the rules that apply

EU regulations bind you directly, with no Bulgarian act in between. Which ones hit you depends on the product: the AI Act for artificial intelligence, the DSA for user content or marketplaces, the EU Data Act for connected products, DORA for financial-sector customers and MiCA for crypto-assets.

7. Investors: from term sheet to crowdfunding

Most founders read their first term sheet only when it is already in their hands. By then they have often done something that costs equity: registered a company with no founders' agreement, paid a developer with no IP assignment, or promised shares in a single email.

8. Checklist by stage

Before you register

  • Write down the share split, vesting and what happens if someone leaves (co-founders).
  • Check the name is free as a trademark and file early (IP).
  • Assign the rights to code written before the company (IP).

At incorporation

  • Pick a legal form with future investors in mind (structure).

The first months

  • Check whether you must register under Art. 97a of the VAT Act before your first payment to a foreign supplier (tax).
  • Decide how founders take money out - salary, dividend or both (tax).

First hires

  • The employment contract notice - with the revenue agency before day one (employment).
  • A written IP assignment from every employee and freelancer (employment).

First sales

  • Terms, withdrawal right and cookies if you sell to consumers (B2C).
  • A DPA with every supplier that processes personal data (contracts).
  • Leave a written trail for every verbal deal, for example a confirming email (verbal agreements).
  • A contract with every business customer that covers scope, acceptance, payment and liability (customer contracts).

Before a round

  • Clean up the cap table and the documents an investor will check (raising capital).

9. Mistakes, and when you need a lawyer

Almost every startup legal mistake is a reasonable decision on the day it's made and an expensive one on the day it comes back. We've collected 18 legal mistakes startups make and what each one costs, plus when you need a lawyer and when a template, accountant or notary will do.

This guide is general information as of October 2026, not individual legal advice.