Top 5 Mistakes to Avoid When Starting a Business in Bulgaria

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Top 5 Mistakes to Avoid When Starting a Business in Bulgaria (with Practical Checklists)

Welcome to ASB Accounting Services Bulgaria — your trusted partner for accounting, tax, and business services. If you plan to start a business in Bulgaria, avoid the traps that cost time, money, and nerves. Below are the five most common mistakes I see as an accountant, plus clear checklists you can follow today.

Picking the Wrong Legal Structure (EOOD vs OOD and Others)

Many founders choose a form before they understand ownership, liability, and tax effects. In Bulgaria, small businesses often choose EOOD (single-owner Ltd) or OOD (multi-owner Ltd). The choice affects governance, partner exits, dividends, and investors later.

What to consider:

• Owners & control: Single founder now, partners later? Plan for share transfers, drag/tag rights, and voting rules in the Articles.
• Capital & future funding: Keep cap table clean. Record all founder contributions properly from day one.
• Management & liability: Clearly appoint and document the manager’s powers to reduce operational risk.

Quick checklist:

• Choose EOOD (solo) or OOD (with partners) based on ownership and growth plan.
• Draft Articles that cover profit distribution, decision thresholds, exits, and dispute resolution.
• Reserve a clean company name and confirm activity codes (NACE/КИД).

Mixing Personal and Business Money

Using a personal account for company payments creates compliance risk and messy books. It also complicates audits and tax claims.

Set it up right:

• Open a dedicated business bank account. Complete KYC fully (ID, Articles, manager appointment, UBO declaration).
• Adopt a simple expense policy: what can be paid by the company, documentation required, and approval flow.
• Use one corporate card for recurring costs; keep receipts and e-invoices organized monthly.

Document checklist for bank account (example):

Mismanaging VAT and Taxes

Missing VAT registration triggers or filing deadlines leads to penalties. Many startups also leave money on the table by not planning VAT and corporate tax from day one.

How to stay compliant and efficient:

• VAT strategy: Decide early if you need mandatory or voluntary VAT registration based on turnover, clients (B2B vs B2C), and input VAT on purchases.
• Monthly discipline: Track invoices, reconcile bank statements, and prepare VAT returns on time.
• Payroll & social security: If you hire, register employment contracts, calculate contributions correctly, and file monthly.
• Year-end close: Plan inventory counts, accruals, and annual financial statements well before deadlines.

Practical tip: Build a simple monthly calendar with VAT, payroll, and supplier payments. Automate reminders. Consistency saves money.

Using an Unreliable Registered Address (Virtual Office)

Every Bulgarian company needs a valid registered address. If mail handling fails, you can miss tax letters or court notices.

What “good” looks like:

• Professional virtual office with documented mail reception and forwarding.
• Clear internal rule: who opens official mail, how it’s logged, and when it reaches your accountant.
• Keep address data consistent across bank, NRA, NSSI, and invoicing tools.

Red flags: Friends’ apartments, ad-hoc mail pickup, and no logs. These cause missed deadlines and fines.

Doing Everything Yourself

Bureaucracy, tax, payroll, and cross-border rules take time to learn. Founders who “DIY” lose months and still risk errors.

Smart approach:

• Delegate bookkeeping, VAT, and payroll to a professional accountant.
• Use cloud invoicing and document management. Give your accountant access.
• Agree on KPIs: monthly close date, dashboard of costs, cash runway, taxes due.

Action Plan: Your First 30 Days

• Decide: EOOD or OOD. Draft robust Articles.
• Register the company and appoint a manager.
• Open a business bank account; keep personal and business separate.
• Choose accounting software and e-invoicing flow.
• Assess VAT registration and set a monthly compliance calendar.
• Secure a reliable registered address with mail forwarding.
• Sign an accounting engagement with scope, deadlines, and response times.

Starter Templates You Can Reuse

• Expense policy (1 page): allowed expenses, approval limit, receipt rules, monthly deadline for handing documents.
• Document naming standard: YYYY-MM-DD_supplier_invoice-number_amount.pdf — makes monthly close fast.
• Monthly checklist: bank reconciliation, invoices issued/received, VAT draft, payroll draft, management summary.

How We Help (ASB Accounting Services Bulgaria)

• Company setup with the right structure for your ownership and plans.
• Bank account support and clean bookkeeping from day one.
• VAT, payroll, and tax compliance with clear monthly reporting.
• Virtual office solutions with reliable mail handling.

Avoid these five mistakes and you’ll start stronger, stay compliant, and make better decisions with real numbers every month.

Need a tailored setup? , Don’t hesitate to reach out to our team at ASB Accounting Services Bulgaria and we’ll map the exact steps, documents, and timelines for you.