When expanding to Bulgaria, one of the first strategic decisions is how to employ people: through an Employer of Record (EOR) or by setting up your own local entity. Both work — but they suit very different situations.
What is an Employer of Record (EOR)?
An EOR is a third party that legally employs workers on your behalf. They handle contracts, payroll, taxes, and compliance, while the employee works for you day-to-day. You don't need a local company.
What does a local entity involve?
Setting up a Bulgarian limited liability company (OOD/EOOD) makes you the direct employer. You gain full control but take on registration, accounting, payroll, and compliance obligations.
Side-by-side comparison
| Factor | EOR | Local Entity |
|---|---|---|
| Setup speed | Days | 2–3 weeks |
| Upfront cost | Low | Higher (registration, capital, accounting) |
| Per-employee cost | Higher (EOR fee per head) | Lower at scale |
| Control | Limited | Full |
| Best for | 1–5 hires, testing the market | Long-term, larger teams |
The rule of thumb
Use an EOR when you want to hire 1–5 people quickly, test the market, or aren't ready to commit to a legal entity. Switch to a local entity once you're scaling beyond a handful of employees and want lower per-head costs and full control.
Many companies start with an EOR and transition to their own entity as the team grows — a hybrid path that balances speed and long-term economics.
💡 Not sure which fits your plans?
ARA.BG helps international companies evaluate the right approach and coordinates either path. See our Market Entry services.