For international IT companies entering Bulgaria, the primary structuring decision is the choice of legal entity. The most commonly used form is the Limited Liability Company (OOD / EOOD).

An OOD (or single-member EOOD) provides:

  • 100% foreign ownership permitted
  • Symbolic minimum share capital requirement (EUR 1)
  • Flexible corporate governance structure (manager / general meeting model)
  • Ability to appoint foreign directors and signatory rights holders
  • No general licensing requirements for IT/software activities
  • Full participation in EU cross-border operations

From a practical perspective, the OOD/EOOD is the default vehicle for:

  • Software development companies
  • Outsourcing and nearshoring providers
  • EU-based group subsidiaries / captive R&D centres

Corporate structuring is typically enhanced through:

  • Shareholders’ agreements
  • Intercompany service agreements (for cross-border groups)
  • Bonus schemes for key IT personnel, incl. including performance-based and equity-linked incentives

A relatively new corporate alternative is the Company with Variable Capital.

It is available to companies with fewer than 50 employees, provided that their annual turnover and/or total assets do not exceed BGN 4 million (approximately EUR 2 million).

Its key features include:

  • no fixed registered share capital requirement; the amount of capital is determined annually by a resolution of the General Meeting following the end of each financial year
  • possibility to issue different classes of shares, including preferred shares with special rights
  • possibility to restrict or prohibit share transfers for a specified period
  • share transfers become effective upon entry in the company’s Register of Shareholders rather than through registration with the Bulgarian Commercial Register

Overall, the Company with Variable Capital allows for:

  • Facilitated investor entry and exit without standard capital increase formalities
  • Flexibility to design share classes and share transfer limitations
  • Reduced administrative burden for share transfers compared to traditional OOD/EOOD

In practice, it is most suitable for:

  • Early-stage startups seeking frequent investment rounds
  • Venture-backed IT companies
  • Flexible ownership models requiring fast capital adjustments

Alongside the standard OOD/EOOD, this structure expands the toolkit available for IT businesses, particularly in high-growth or investment-heavy scenarios.

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