Doing Business in Bulgaria
Bulgaria’s ascension to the EU in 2007, gradual post-recession growth and flourishing IT sector have increased the potential for foreign investment.
Having ranked 61st out of 190 economies in the World Bank’s Ease of Doing Business Survey for 2020, foreigners find it to be comparably easy to invest in Bulgaria. Bulgaria scored well in the areas of trading across borders (21), protecting minority investors (25) and enforcing contracts (42). However, it achieved an unsatisfactory score for ease of starting a business (113) and getting electricity (151).
The country's low corporate income taxes, low costs of doing business and fast internet make it attractive for expats to start a business in Bulgaria.
Business culture in Bulgaria
Business culture in Bulgaria is informed both by the societal importance placed on relationships and by the historical collectivism of Bulgarian society, which has traditionally prioritised the group over the individual. Relationships built on trust are central to succeeding in local business, but these can take time to develop. Networking is, therefore, an important part of doing business in the country.
In line with the importance of forming relationships, face-to-face meetings are highly valued in Bulgarian working culture and meetings are often prolonged affairs. Bulgarians often make their points directly, or they rely on body language to convey their meaning. Many new arrivals are initially confused, as head shaking and nodding have opposite meanings – in Bulgaria, head shaking indicates a positive, ‘yes’, while head nodding indicates a negative, ‘no’.
Business hours are Monday to Friday 8am or 9am to 5pm or 6pm.
Bulgarian is the official language. English is increasingly used in business circles, especially within multinational companies.
Business attire is generally formal and conservative. Business casual and other less formal attire may be accepted in some industries.
A firm handshake, direct eye contact and addressing people by their titles is appropriate.
Gifts are only given on special occasions. Due to a history of corruption, gift-giving can be a sensitive affair. Therefore, it’s best to present a thoughtful gift as opposed to an expensive one. When invited to a colleague’s home, it’s customary to bring a gift for the host. Chocolates, wine or flowers are acceptable.
While the gender pay gap in Bulgaria is lower than the EU average, the majority of senior business positions are held by men. Despite this, women and men are considered equal in the workplace.
Businesses follow a hierarchical structure whereby seniors make decisions, but the consensus of everyone involved is sought beforehand. Business hierarchy is also impacted by Bulgarian society, in which older people are given more respect.
Communication is formal and importance is given to using correct titles. First names are reserved for family and close friends. Face-to-face meetings are preferred and communication is direct. Despite this directness, many meanings are communicated through gestures and facial expressions.
Bulgaria struggles with a legacy of corruption. Although visible progress has been made in battling corruption, nepotism and bribery are still perceived as being prevalent in Bulgaria’s public sector. The country is adopting EU recommended legislature to help curb corruption.
Dos and don'ts of business in Bulgaria
Do be punctual
Do organise meetings in advance and confirm the meeting the day before.
Do address business colleagues by their titles, as first names are reserved for close friends and families.
Don't try to rush things. Business decisions can take time as associates get to know a person to determine whether they are trustworthy
Do remember that head shaking means yes, while head nodding means no.
Do make personal, face-to-face meetings instead of meeting online.