Can You Work Under a Labour Contract and Own a Company in Bulgaria?
You can work under a labour contract and own a company in Bulgaria at the same time. For example, you may be the sole owner of an EOOD or hold shares in an OOD while another business employs you.
The important distinction is between company ownership and personal work. Holding shares does not normally create social security obligations by itself. Your position changes when you begin to manage the company, provide its services, negotiate with clients or perform tasks that support its commercial activity.
Your obligations therefore depend on what you actually do in the business, not only on the information recorded in the company documents.
When are you only a company owner?
A passive owner may contribute capital, vote on shareholder decisions and receive dividends without taking part in daily operations. This may be the case when the company has not started trading, another manager runs it, or employees and contractors perform all operational work.
Ownership alone does not normally require you to register as a self-insured person when you perform no personal work for the company.
This distinction may apply when:
- the company has not yet started its commercial activity;
- the business has temporarily stopped operating;
- another person manages the daily operations;
- employees or contractors provide the services;
- the owner does not communicate with customers or suppliers.
However, the authorities can consider the real facts, not only the wording of the documents. A business may appear inactive, while its owner still prepares offers, deals with customers, signs operational contracts or organises suppliers.
Such actions can indicate that the owner personally works in the company.
Which activities count as personal work?
You may actively work in the business even when you do not have a separate office or fixed working hours. Regular remote work can also form part of the company’s activity.
Examples of personal work include:
- providing consulting, digital, technical or creative services;
- selling products and managing customer orders;
- communicating with clients and preparing offers;
- organising employees, suppliers or subcontractors;
- managing projects and daily business operations;
- signing contracts and representing the company;
- making regular operational or financial decisions.
A labour contract with another employer does not automatically remove the obligations connected with this activity. You should identify the actual date on which your personal work begins and arrange the appropriate social security status.
How can you arrange your role in the company?
A working owner or shareholder may operate as a self-insured person. This option often applies when the owner personally performs the company’s main services or regularly participates in its business activity.
The company may also appoint a manager under a management and control agreement. The correct option depends on several practical factors:
- who actually manages and represents the company;
- what duties the owner performs;
- whether the company has agreed management remuneration;
- whether the owner also performs work outside the management role;
- whether the documents reflect the real arrangement.
You should not choose an arrangement only because it appears simpler. The contracts, accounting records and social security declarations should describe the same factual situation.
| Situation | Possible treatment | Main point to check |
|---|---|---|
| You own shares but perform no personal work | Ownership alone does not normally require self-insurance | Who manages and performs the company’s activity |
| You personally provide services | Registration as a self-insured person may be necessary | The actual start date and required declarations |
| You manage and represent the company | Management insurance rules may apply | Appointment, duties, agreement and remuneration |
| You also work for another employer | You may have more than one social security basis | Monthly coordination of the relevant income |
What happens when you have more than one social security basis?
Employment and personal work in your own company represent separate grounds for social security contributions. The law considers the relevant income up to the applicable maximum monthly insurable income.
When your employment income already reaches the applicable maximum, this may limit or remove additional contributions through the company for that month. Registration and reporting obligations may still remain.
When your employment income remains below the maximum, the company activity may create additional contribution obligations.
Give your accountant accurate information about:
- salary changes and additional employment payments;
- unpaid leave and sick leave;
- management or personal work remuneration;
- the date on which the company activity begins;
- any interruption or termination of your personal activity.
Even a temporary employment change can affect the calculation for a particular month.
Can dividends replace payment for your work?
Dividends distribute company profit to owners. They do not represent payment for management or personal work.
A company may distribute dividends when it has distributable profit and follows the required corporate procedure. However, an owner who serves clients, manages projects and performs regular work cannot resolve the social security question simply by receiving dividends.
The company’s contracts, accounting records and declarations should reflect the actual activity. Conflicting information may create unnecessary risks during an inspection. ⚠️
Should you review your employment contract?
Before starting a business, review your labour contract, internal policies and confidentiality duties. Pay particular attention to possible conflicts of interest, competition and the protection of trade secrets.
Do not use your employer’s working time, equipment, customer lists, contacts or confidential information for your own company. Special restrictions may also apply to regulated professions and certain public positions.
What should you check before starting? ✅
- Decide whether you will remain a passive owner or work actively.
- Identify who will manage and represent the company.
- Choose the correct social security basis before regular work begins.
- Record the actual start date of your personal activity.
- Keep company documents and accounting records consistent.
- Inform your accountant about changes in your employment.
If you need an individual review of your employment status, company role and reporting duties, T&G Consulting can help you organise the activity according to the facts of your case.
You can therefore work under a labour contract and own a company in Bulgaria. The decisive issue is not ownership alone, but whether you personally work in the business and how you document that role.
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This article provides general information only and does not constitute tax, accounting, or legal advice. Each company situation should be reviewed individually before decisions are made.