Banks & Finances Bulgaria

In Bulgaria, most banks welcome foreign clients and offer a variety of services tailored to their needs. Among the most loyal banks to foreigners are:

 

UniCredit Bulbank: The largest bank in Bulgaria; provides a wide range of services for individuals and businesses, including current accounts, credit and debit cards, loans, and investment products.

 

DSK Bank: One of the leading banks; offers a variety of banking products and services, including current and savings accounts, loans, and cards.

 

United Bulgarian Bank: Provides a full range of banking services for individual and corporate clients.

 

Postbank: One of the leaders in credit and debit cards, mortgage and consumer loans, savings products, as well as corporate solutions for small businesses and large international companies.

 

First Investment Bank (Fibank): The largest bank with Bulgarian capital; offers a variety of products and services for individual and corporate clients.

 

Central Cooperative Bank (CCB): Offers a full range of financial intermediation services, with a focus on financing small and medium-sized businesses and retail banking services.

 

ProCredit Bank: Specializes in serving small and medium-sized businesses and also offers retail banking products for individuals.

 

Recommendations for foreign clients

Language: Although many banks have English-speaking staff, it is advisable to confirm the possibility of service in your preferred language.

Online banking: Check if the bank offers convenient online services, which is especially important for managing your account from abroad.

 

Before choosing a bank, it is advisable to visit several branches to assess the level of service and choose the most suitable option for your needs.

Steps to open a bank account

 

Choosing a bank: Both local and international banks operate in Bulgaria. It is recommended to study the offers of various banks, paying attention to fees, the availability of online services, and the presence of English-speaking staff.

 

The standard set of documents includes:

- A valid passport or national ID: To confirm your identity.

- Proof of address: A lease agreement, utility bill, or another official document with your name and address may be required.

- Residence permit or visa: Non-residents may need a valid residence permit or visa.

- Proof of financial means: Some banks may request proof of funds or source of income.

Note that requirements may vary depending on the bank. It is recommended to clarify the full list of required documents in the chosen bank in advance.

 

Visiting the bank branch: After gathering all the documents, visit the chosen bank branch. Some banks offer the possibility of opening an account online, but for non-residents, this may be limited.

 

Making an initial deposit: Some banks require a minimum initial deposit to activate the account. The amount may vary, so clarify this in advance.

 

Receiving a bank card and access to online banking: After opening the account, you will be issued a debit card and provided access to online banking. The card is usually ready within a few days and can be sent to your address or available for pickup at the branch.

Using ATMs

Availability: ATMs are widely available in cities and tourist areas of Bulgaria. Most of them support international payment systems such as Visa, MasterCard, and UnionPay.

 

Your bank's fee: Many banks charge a fee for international transactions. It is recommended to check the commission size before traveling.

Bulgarian bank fee: Some Bulgarian banks charge an additional fee for using their ATMs with foreign cards. This information is usually displayed on the ATM screen before confirming the transaction.

 

Limits: Many Bulgarian ATMs restrict the amount of a single withdrawal, often up to 400 lev. If a larger amount is needed, you may have to make multiple transactions, each potentially subject to a fee.

 

Choosing an ATM

Banks with low fees: Some banks offer more favorable conditions for foreign cards. For example, UniCredit Bank ATMs allow withdrawals of up to 400 lev at a time with a daily limit of up to 2000 lev. The fee is about 2% of the amount.

Avoid independent ATMs: ATMs not owned by major banks often charge higher fees.

 

Currency Conversion

Dynamic Currency Conversion (DCC): Some ATMs offer the choice of withdrawing in local currency (lev) or in your card's currency. It is recommended to choose the local currency, as DCC often comes with an unfavorable exchange rate.

 

Alternative Ways to Get Cash

Bank counters: Foreign cardholders can withdraw cash through the counter in bank branches. However, fees may be higher than using ATMs, and an ID will be required.

Exchange offices: Some currency exchange offices offer cash withdrawal services from cards, but terms and fees can vary significantly.

 

Recommendations

Check the fees: Carefully read the fee information on the ATM screen before confirming the transaction.

Use major bank ATMs: They generally offer better conditions for foreign cards.

Avoid DCC: Choose to withdraw in local currency to avoid extra conversion costs.

Verify limits: Before traveling, check with your bank about limits and fees for international transactions.

Bank Transfers (SWIFT)

Bank transfers via the SWIFT system allow sending funds almost anywhere in the world. You will need to provide recipient details, including name, account number (IBAN), and bank SWIFT code. Fees and transfer times depend on the sending and receiving banks. For instance, Central Cooperative Bank offers interbank transfers in 15 convertible currencies through its correspondent accounts in 22 banks in Europe, North America, and Asia.

 

Money Transfer Systems

Western Union: One of the largest money transfer systems, allowing you to send and receive money in more than 200 countries worldwide. In Bulgaria, Western Union services are available at Central Cooperative Bank branches.

MoneyGram: Another popular system providing money transfer services worldwide. In Bulgaria, MoneyGram services are available through the EasyPay network.

Ria Money Transfer: A system offering competitive rates and a wide network of service points. In Bulgaria, Ria services are available through Tokuda Bank.

 

Online Platforms

Paysera: An electronic payment system allowing international transfers at low rates in more than 20 currencies. You can open a Paysera account online, and it offers access to a multi-currency account with favorable exchange rates.

 

Postal Transfers

Bulgarian post offers international money transfer services, but delivery time and fees may be higher compared to other methods.

 

Recommendations for choosing a transfer method

Delivery times: If a transfer needs to be done urgently, money transfer systems like Western Union or MoneyGram may be preferable, as funds are usually available to the recipient within minutes.

Fees: Bank transfers via SWIFT may be more economical for large amounts, while online platforms or money transfer systems may offer better rates for smaller transfers.

Availability: Ensure the chosen transfer method is available in the recipient's country and that the recipient can receive the funds.

Safety: Choose proven and reliable services to ensure the safety of your funds.

Foreign citizens in Bulgaria can obtain a loan or mortgage, but the terms and requirements may differ from those for local residents.

 

Mortgage Lending for Foreigners: Bulgarian banks offer mortgages to foreign citizens, however, the terms may be less favorable compared to those offered to Bulgarian citizens. For example, the standard mortgage term for Bulgarians is 25 years, whereas for foreigners it may be limited to 15 years. Interest rates for foreigners may also be higher.

 

Borrower Requirements: Foreign citizens usually need to provide the following documents to obtain a loan or mortgage:

- A valid passport or national ID card.

- Proof of income: a statement from your employer, tax returns, or bank statements.

- Proof of address: a rental agreement, utility bill, or other official document with your name and address.

- Residence permit or visa: non-residents may need a valid residence permit or visa.

Some banks may request additional documents or guarantees, especially if the borrower does not have a permanent income in Bulgaria.

 

Interest Rates and Conditions: Interest rates for foreign borrowers may vary depending on the bank and the financial position of the borrower. Rates might be higher than for local residents, ranging from 7% to 9.5%, sometimes reaching as much as 14%. The loan period usually ranges from 5 to 20 years, and the maximum age of the borrower is up to 65 years.

 

Recommendations

Seek Consultation: If you are unsure about your options or lending conditions, it is recommended to consult with a financial advisor or bank representative.

Cash Payment Restrictions

According to Bulgarian legislation, the maximum cash payment between individuals or between an individual and a legal entity should not exceed 10,000 Bulgarian levs (about 5,000 euros). Payments exceeding this amount must be made non-cash through bank transfers.

 

Buying Real Estate

Non-cash Payment: When purchasing real estate, amounts usually exceed the established limit for cash transactions. Therefore, such deals are conducted exclusively through bank transfers. This ensures the transparency of the deal and compliance with legal requirements.

Bank Guarantee: In some cases, the seller may require a bank guarantee or letter of credit to ensure the security of the payment.

 

Buying a Car

Cash Payments: If the cost of the car does not exceed 10,000 levs, payment can be made in cash. However, it is recommended to keep all documents confirming the transaction for potential inspections.

Non-cash Payment: For cars costing over 10,000 levs, payment must be made through a bank transfer. This also provides additional security and confirmation of the transaction.

 

Recommendations

Consultation with a Lawyer: Before making major purchases, it is recommended to consult with a local lawyer or financial consultant to ensure compliance with all legal norms.

Documentary Confirmation: Regardless of the payment method, always retain all documents confirming the transaction and payment for possible future checks or disputes.

In Bulgaria, various tools are available for saving, savings and investing, allowing for effective personal finance management. Let's consider the main ones:

 

Bank Deposits: Bank deposits remain a popular way of saving funds due to their reliability. However, interest rates on deposits in Bulgaria are traditionally low.

 

Investments in Stocks: The Bulgarian Stock Exchange provides opportunities for investing in local company stocks. The main index is SOFIX, reflecting the dynamics of the most liquid stocks. Investing in stocks may provide a higher return compared to deposits, but it comes with higher risks.

 

Investment Funds: In Bulgaria, mutual funds offering diversified asset portfolios are available. Investing through funds allows for risk reduction and professional fund management. However, it is important to consider the fees and terms of the specific fund.

 

Real Estate: Investing in real estate remains a popular way to preserve and grow capital. Real estate prices in Bulgaria vary depending on the region, and the market shows steady growth. However, one should consider maintenance costs and potential price fluctuations.

 

Bonds: Government and corporate bonds offer a fixed income and are considered less risky compared to stocks. Bond yield depends on the issuer and the maturity period.

 

Alternative Investments: Alternative investments include precious metals, works of art, and other assets. Such investments can diversify a portfolio but require a deep understanding of the market and are associated with certain risks.

 

Recommendations

Consultation with Professionals: Before making investment decisions, it is recommended to consult financial advisors to assess risks and determine the optimal strategy.

In Bulgaria, the tax obligations of foreign citizens depend on their tax status: resident or non-resident. The determination of this status affects the types of income subject to taxation and the applicable tax rates.

 

Determination of Tax Residency

According to Bulgarian law, an individual is considered a tax resident if one of the following conditions is met:

Permanent address in Bulgaria: The person has a registered permanent address in the country.

Presence of more than 183 days in a year: The person resides in Bulgaria for more than 183 days within any 12-month period.

Center of vital interests: The personal and economic interests of the individual are concentrated in Bulgaria.

 

If none of these conditions is met, the person is considered a tax non-resident.

 

Taxation of Residents: Bulgarian tax residents are taxed on their total global income, regardless of its source. Main types of income and corresponding tax rates are:

Income from employment: Taxed at a rate of 10%.

Income from entrepreneurial activity: Tax rate is 15%.

Dividends: Taxed at a rate of 5%.

Interest income: Tax rate is 8%.

Income from rent and capital gains: Taxed at a rate of 10%.

 

Residents are required to file an annual tax return and pay taxes within the deadlines.

 

Taxation of Non-residents: Tax non-residents are taxed only on income derived from sources in Bulgaria. Such income includes:

Income from employment in Bulgaria.

Income from the rental of real estate located in Bulgaria.

Dividends and interest income from Bulgarian sources.

 

The tax rates for non-residents are similar to those for residents. However, in some cases, the tax is withheld at the source of payment, and the non-resident is exempt from filing a tax return.

 

Double Taxation Avoidance Agreements:

Bulgaria has signed agreements to avoid double taxation with a number of countries. These agreements allow avoiding double taxation of the same income in Bulgaria and the taxpayer's country of residence. It is recommended to familiarize yourself with the provisions of the relevant agreement between Bulgaria and your country to determine tax obligations.

 

Recommendations

Consult with Tax Specialists: Tax legislation can be complex, and professional consultation can help avoid mistakes.

In Bulgaria, the obligation to file a tax return depends on the tax status of an individual (resident or non-resident), as well as the type and source of income received.

 

Who is required to file a return

Tax residents are required to file a tax return on all their income (both in Bulgaria and abroad).

Tax non-residents are required to file a return only on income derived from sources in Bulgaria.

 

Individuals receiving taxable income: income from entrepreneurial activities; capital gains (e.g., from the sale of real estate or shares); income from leasing or subleasing property.

 

Individuals engaged in self-employed professional activities (lawyers, consultants, and others) are required to declare their income.

 

If you wish to take advantage of tax deductions (for example, for children or medical expenses), a declaration must be filed, even if your income is exempt from taxation.

 

Individuals whose income is subject to withholding tax: for example, foreigners working under contract in Bulgaria, may be required to file a declaration to clarify the taxable base or to obtain a refund of overpaid taxes.

 

Individuals whose income is fully taxed at source (e.g., salaries from which the employer withholds taxes) and who have no additional sources of income are not required to file a declaration.

 

 

Deadlines for submitting the tax declaration: Annual tax declaration: The declaration is submitted for the previous calendar year from January 10 to April 30 of the current year.

 

Ways to submit the tax declaration

Online through the Electronic Services Portal of the National Revenue Agency (portal.nra.bg):

Using a qualified electronic signature or personal identification code.

Advantage: the possibility of submitting the declaration without visiting an office, access to a pre-filled declaration from March 1.

 

In person at a territorial office of the National Revenue Agency:

At the place of permanent address registration.

 

 

By mail:

Send the completed declaration by registered mail with an inventory of the contents to the address of the relevant territorial office of the National Revenue Agency.

 

Recommendations

Consult with tax specialists: In case of questions or difficulties, it is recommended to seek professional assistance.

In Bulgaria, self-employed individuals and freelancers have a special tax and legal status. This status is regulated by the Personal Income Tax Act and other regulations.

 

Registration and requirements

 

To start activity as a self-employed person, it is necessary to:

Register with the Registration Agency:

- Submit an application for registration with the BULSTAT register within 7 days of starting activity.

- Provide an ID card, application, declaration of data accuracy, pay a state fee, and a document confirming the right to engage in the chosen profession (e.g., diploma or license).

 

Register with the National Revenue Agency:

- After registration with BULSTAT, register with the National Revenue Agency at the place of registration in Bulgaria.

 

Taxation

 

Self-employed individuals can choose one of the following taxation regimes:

General regime:

- Income tax is paid at a rate of 10% of the taxable base.

- The taxable base is determined as the difference between income and recognized expenses.

- Recognized expenses can be actual or normative (e.g., 25% of income for certain professions).

 

Patent regime:

- Applies to certain types of activities specified by law.

- The patent tax amount depends on the type of activity and location.

- An application must be submitted to the municipality and the tax paid quarterly.

 

Self-employed individuals are required to pay their social and health insurance contributions:

Social insurance: Includes pension and other insurances; the minimum base for calculating contributions is set annually; the contribution rate is about 19.8% of the chosen base.

Health insurance: The rate is 8% of the same base.

Contributions are paid monthly by the 25th of the following month.

 

Benefits and features

Normatively recognized expenses: For some professions, normative expenses are provided, reducing the taxable base (e.g., 25% for consultants).

VAT exemption: If the annual turnover does not exceed 50,000 BGN, VAT registration is not mandatory.

Option to choose the base for social contributions: Self-employed individuals can choose the base for contributions calculation within established minimum and maximum limits.

 

Recommendations

Consultation with an Accountant: It is recommended to consult a professional accountant for the correct choice of tax regime and calculation of contributions.