A Bulgarian Employer of Record (EoR) is a service model that allows businesses to hire employees in Bulgaria without establishing a legal entity in the country. These organizations, also known as Professional Employer Organizations (PEOs), function as the legal employer on behalf of the client company, handling all administrative tasks such as employment contracts, payroll, taxes, benefits, and compliance with local employment laws.
The EoR model is increasingly popular among international businesses seeking to expand into Bulgaria but are deterred by the intricacies and overhead costs of establishing a local presence.
The EoR model operates on a co-employment basis. The client company retains all managerial control over the employee, responsible for their daily tasks, work deliverables, and strategic roles. Meanwhile, the Bulgarian EoR assumes all legal and administrative responsibilities related to employment.
The EoR establishes an employment contract with the employee under Bulgarian labor laws, ensuring compliance with local regulations. They then handle payroll, benefits administration, tax withholding, and social security contributions. The EoR also manages any risks related to employment, including terminations and legal disputes, thus mitigating potential liabilities for the client company.
In conclusion, a Bulgarian Employer of Record provides a viable option for businesses seeking to expand into the Bulgarian market. While there are drawbacks such as dependency and potential cultural disconnect, the benefits of rapid market entry, regulatory compliance, reduced overhead costs, scalability, and access to local expertise can significantly outweigh these. Companies must carefully evaluate their business needs before choosing to partner with an EoR and select a provider that aligns with their strategic objectives.
Yes, Bulgarian Employers of Record are well-equipped to manage the hiring, onboarding, and management of remote employees in compliance with Bulgarian labor laws.
Absolutely. An EoR can serve as a stepping stone for companies testing the Bulgarian market. Once the business is stable, companies may choose to transition from an EoR model to establish their own legal entity in Bulgaria.