Bulgaria has no separate statutory Employer of Record licence. Depending on who directs and controls the worker, an EOR model may fall within the regulated temporary-work-agency regime.
Vassilev & Chisuse Law Firm · 2026-10-11 · Legal review: 12 October 2026
Bulgarian law does not create a separate statutory licence called an Employer of Record licence. A business model marketed internationally as Employer of Record must therefore be analysed according to the actual Bulgarian legal relationships it creates. The central question is who is the employer and who directs and controls the employee's day-to-day work.
If a Bulgarian company hires an employee specifically to send that person to perform temporary work for a user undertaking under the user's direction and control, the arrangement can fall within the regulated temporary-work-agency regime. In that case the supplying undertaking must be registered with the Bulgarian Employment Agency and comply with the Labour Code and the Employment Promotion Act.
No separate Bulgarian statutory category uses the international label Employer of Record. The legal analysis instead turns on the characteristics of the arrangement under the Labour Code, employment legislation, social-security rules, immigration law and other applicable regulation.
This means a contract cannot determine the legal treatment merely by calling the provider an Employer of Record, payroll provider, outsourcing company or service provider. Authorities and courts can look at how the relationship actually operates, including who recruits the employee, who assigns work, who exercises day-to-day direction and control and why the employment contract was concluded.
Bulgarian labour law defines an undertaking providing temporary work as a person carrying on business that enters into an employment contract with a worker in order to send that worker to perform temporary work in a user undertaking under the user's direction and control, after registration with the Employment Agency.
The Ministry of Labour and Social Policy has repeatedly emphasised that the purpose for which the employment contract is concluded and the user's direction and control are central to this classification. Where those elements are present, the arrangement cannot safely be treated as ordinary commercial outsourcing merely because the intercompany contract uses a services label.
Where the provider operates as an undertaking providing temporary work, registration with the Employment Agency is required. The Agency maintains a central electronic register of natural and legal persons carrying out employment-intermediation activities and/or providing temporary work.
Registration is therefore a structural regulatory issue, not a document to obtain only after employees have been placed with clients. A provider planning to supply workers under the direction and control of user undertakings should assess the registration requirement before entering into client and employment contracts.
The Bulgarian Labour Code specifically regulates employment contracts concluded by temporary-work undertakings for workers who will be sent to a user undertaking. The statutory framework limits the permitted temporary-work contracts to the cases provided by the Labour Code, including work until completion of specified work and replacement of an absent employee.
This is an important difference from commercial EOR models in some other jurisdictions, where the provider may employ a person indefinitely and make that person available to a client on a long-term basis. A Bulgarian arrangement must be tested against the specific Labour Code rules rather than imported from a foreign contractual template.
Direction and control are central to distinguishing temporary agency work from a genuine outsourced service. If the client determines the employee's daily tasks, working process and operational instructions, the arrangement is more likely to display the characteristics of work performed in a user undertaking.
By contrast, a genuine service provider ordinarily organises its own staff and assumes responsibility for delivering an agreed service or result. The distinction is factual. A contract describing an arrangement as outsourcing will not resolve the issue if the client in practice manages individual workers as part of its own team.
The legal employer remains responsible for the employment obligations allocated to it by Bulgarian law, including calculation and payment of remuneration and the employer's social-security and health-insurance obligations. In a regulated temporary-work arrangement, the Labour Code allocates additional duties between the temporary-work undertaking and the user undertaking.
The commercial agreement should reflect that legal allocation without attempting to transfer statutory employer obligations away from the party that bears them under mandatory law. Payroll administration should also match the employment documentation and actual work arrangement.
The Bulgarian Labour Code imposes duties on the user undertaking in the temporary-work context, including obligations connected with working conditions, health and safety, information and the treatment of workers assigned to it. The exact allocation of responsibilities must be checked against the statutory provisions applicable to the placement.
A client using a workforce supplied by another company should therefore not assume it has no employment-law responsibilities because it is not the formal employer. The greater the client's operational control, the more important it is to map its statutory and workplace duties accurately.
Long-term operational integration requires particular caution. If an employee works indefinitely as part of the client's organisation under the client's direction and control, a model presented commercially as Employer of Record may conflict with the restrictions of the Bulgarian temporary-work framework or raise questions about the real nature of the relationship.
Where the commercial objective is to build a permanent Bulgarian team, establishing a local employing entity may in some cases provide a clearer long-term structure. The appropriate model depends on headcount, duration, management structure, regulated activities, tax, immigration and the employer's intended presence in Bulgaria.
In genuine outsourcing, the supplier undertakes to deliver a service or result and normally retains organisation and control over its employees. In temporary work, employees are hired to be sent to a user undertaking where they perform work under that undertaking's direction and control.
The distinction should be reflected consistently in the statement of work, management processes, performance supervision, equipment, work schedules, workplace access and communications. A mismatch between the contract and the facts can create labour-law and regulatory risk.
A foreign business should consider not only the employment contract but also social security, payroll withholding, permanent-establishment and corporate-presence issues, immigration and work authorisation for third-country nationals, data protection and intellectual-property arrangements.
An employment solution should not be selected only because it avoids immediate company formation. The total legal structure should support the planned duration and substance of the Bulgarian operation.
Cross-border assignments can engage separate rules on posting workers and temporary agency workers in the framework of services. The Ministry of Labour and Social Policy's 2026 guidance confirms that foreign employers or temporary-work undertakings sending workers to Bulgaria may have notification and local compliance obligations, with additional work-authorisation rules potentially applying to third-country nationals.
A cross-border placement should therefore be analysed separately from a domestic Bulgarian employment arrangement. The home-country status of the provider does not by itself determine the Bulgarian requirements.
The agreement should be tested against the actual operating model. Key points include who is the legal employer, who directs and controls the work, who recruits and can dismiss the worker, who determines working time and leave, who provides equipment, how performance is managed, who bears health-and-safety responsibilities and whether the provider needs Employment Agency registration.
The employee-facing documentation, provider-client agreement and actual day-to-day management must be consistent. A well-drafted contract cannot cure a business model that in practice operates contrary to mandatory Bulgarian employment rules.
Vassilev & Chisuse Law Firm advises international and Bulgarian businesses on employment structures, temporary-work arrangements, local hiring, service and outsourcing models, employment documentation and regulatory classification.
For related matters, see our Employer of Record, Employment and Social Security Law and Company Incorporation and Corporate Structuring services.
This article reflects the Bulgarian employment framework reviewed as of 12 October 2026 and is provided for general information only. It does not constitute individual legal, tax or immigration advice. The legal classification depends on the contracts and on how the relationship operates in practice.