Bulgaria has emerged as an increasingly attractive jurisdiction for cryptocurrency entrepreneurs seeking flexibility, low barriers to entry, and alignment with European Union standards. With a business-friendly regulatory environment and integration into the EU legal framework, Bulgaria offers a strategic gateway for launching and scaling crypto ventures. As the EU prepares to fully implement comprehensive crypto regulations by 2025, Bulgaria remains well-positioned to adapt swiftly while maintaining its reputation as a cost-effective and compliant hub.
This guide explores the current state of cryptocurrency regulation in Bulgaria, including licensing requirements, anti-money laundering (AML) compliance, tax obligations, consumer protection laws, and key advantages for blockchain-based businesses.
Why Choose Bulgaria for Your Crypto Business?
Bulgaria’s regulatory authorities — including the Bulgarian National Bank (BNB) and the Financial Supervision Commission (FSC) — have adopted a liberal approach toward crypto businesses. While there is no dedicated crypto-specific law yet, existing general regulations provide sufficient legal clarity, especially under EU-mandated frameworks like AML directives.
The upcoming Markets in Crypto-Assets (MiCA) regulation, expected to take full effect across the EU by 2025, will bring uniformity and stronger oversight to digital asset markets. MiCA aims to prevent market abuse, enforce environmental responsibility, regulate stablecoins more strictly, and impose higher standards on Crypto-Asset Service Providers (CASPs). Until MiCA is fully operational, Bulgaria allows crypto entrepreneurs to operate under flexible conditions while preparing their operations to meet future EU-wide compliance.
Additionally, the Pilot Regime for Market Infrastructures based on Distributed Ledger Technology (DLT Pilot), effective since March 2023, enables testing of blockchain-based trading and settlement systems for financial instruments classified under MiFID II. This serves as a de facto regulatory sandbox for innovative firms exploring DLT applications.
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Key Benefits of Establishing a Crypto Business in Bulgaria
Despite the absence of a formal regulatory sandbox or national crypto incentive program, Bulgaria offers numerous structural advantages:
- Fast company registration and licensing – Completed remotely without physical presence
- Low minimum capital requirement – Starting from just €1
- No mandatory local office or employees – Fully remote operation allowed
- No high application or recurring regulatory fees
- Access to the EU single market – Through Bulgaria’s EU membership
- Reputable financial standing – Recognized for fiscal discipline within the EU
- Openness to innovation – Supportive attitude toward technological experimentation
These factors make Bulgaria an ideal launchpad for startups aiming to scale across Europe while maintaining lean operational costs.
Anti-Money Laundering Measures Act (MAMLA)
The primary legislation governing crypto businesses in Bulgaria is the Anti-Money Laundering Measures Act (MAMLA), which implements the EU’s Fifth Anti-Money Laundering Directive (5AMLD). MAMLA formally defines virtual currency as a digital representation of value that is not issued or guaranteed by a central bank, does not have legal tender status, but is accepted by individuals or legal entities as a means of exchange and can be transferred, stored, or traded electronically.
Under MAMLA, the following activities require registration with the National Revenue Agency (NRA):
- Exchanging crypto assets for other crypto assets
- Converting crypto to fiat currency (and vice versa)
- Safeguarding private cryptographic keys on behalf of clients
- Holding, storing, and transferring crypto assets
All registered entities must comply with strict Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures. Enhanced due diligence is mandatory for transactions exceeding 30,000 BGN (~€15,000), whether conducted in a single transaction or multiple linked operations.
Businesses must also identify and verify ultimate beneficial owners (UBOs), maintain detailed records, monitor transactions for suspicious activity, and report any red flags to the Financial Intelligence Unit at the National Security Agency.
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Consumer Protection Laws
While Bulgarian consumer protection laws apply broadly, they are particularly relevant when crypto services are offered to individuals for non-investment purposes. Key principles include:
- Providing clear, accurate, and comprehensive pre-contractual information online or in writing
- Prohibiting unfair contract terms (e.g., unilateral termination rights)
- Ensuring all promotional content is identifiable and truthful
- Granting consumers a 14-day right to withdraw from contracts without penalty
- Notifying users at least seven days before any changes to terms and conditions
- Informing customers of their right to file complaints with the Bulgarian Commission for Protection of Consumers’ Rights
Transparency and fairness are essential — misleading claims about licensing status or service capabilities can result in penalties.
Taxation for Crypto Companies in Bulgaria
Bulgaria offers one of the most favorable corporate tax regimes in Europe:
- Corporate income tax: Flat rate of 10% on profits from crypto trading, exchanges, or mining
- Withholding tax on dividends: Only 5%
- Social security contributions: Total 24.3% (employer: 13.72%, employee: 10.58%)
- Health insurance: Total 8% (employer: 4.8%, employee: 3.2%)
VAT registration is required once annual turnover exceeds 50,000 BGN (~€25,600) over 12 consecutive months. Notably, crypto-to-crypto transactions are VAT-exempt across the EU, as they are treated as equivalent to financial services.
Moreover, Bulgaria has signed approximately 70 double taxation treaties, enabling international businesses to optimize their tax structure and avoid duplicate taxation.
Licensing Process for Crypto Businesses
Although Bulgaria doesn’t issue a specific “crypto license,” all relevant service providers must register with the National Revenue Agency (NRA) under MAMLA. The process includes:
- Registering a Bulgarian company (e.g., Ltd or JSC)
- Preparing detailed descriptions of planned services and software platforms
- Developing internal AML/CFT policies compliant with EU directives
- Launching a compliant website and mobile app (if applicable)
- Paying a 50 BGN (~€25) registration fee
- Submitting an electronic application signed with a qualified digital signature
Upon approval, the business is added to the NRA’s public registry and receives an electronic certificate within one month — one of the fastest turnaround times in Europe.
Any changes — such as company name, address, or service scope — must be reported promptly to maintain compliance.
Company Formation in Bulgaria
Most crypto startups opt for a Limited Liability Company (EOOD) due to its simplicity and low entry barriers:
- Minimum share capital: 2 BGN (~€1)
- No residency requirements for directors or shareholders
- Virtual office solutions accepted for registered address
- Processing time: Up to two months
Required documents include:
- Certificate of company name availability
- Copy of ID/passport for owners and director(s)
- Articles of Association
- Bank statement confirming capital deposit
Total state fees amount to around 55 BGN (~€28) — significantly lower than in other EU countries.
Reporting and Compliance Requirements
Crypto companies must adhere to the Accounting Act (2015) and submit annual financial statements. While crypto holdings aren’t taxed directly, they must be reported in financial records.
Audit exemption applies if two of the following thresholds are not exceeded:
- Total assets: €1 million
- Annual revenue: €2 million
- Average number of employees: 50
This makes compliance manageable for small and medium-sized enterprises.
Frequently Asked Questions
Q: Does Bulgaria require a special crypto license?
A: No specific "crypto license" exists, but businesses offering exchange or custody services must register with the National Revenue Agency under MAMLA.
Q: Can I run a crypto business remotely from Bulgaria?
A: Yes — there's no requirement for local staff or physical office space. Registration and operations can be managed entirely online.
Q: Are crypto-to-crypto trades subject to VAT in Bulgaria?
A: No — such transactions are VAT-exempt under EU law as they fall under financial services.
Q: How long does it take to get approved?
A: Typically within one month after submitting a complete application to the NRA.
Q: Is Bulgaria preparing for MiCA implementation?
A: As an EU member state, Bulgaria will fully adopt MiCA by 2025, aligning its national regulations with the new framework.
Q: What are the main compliance obligations?
A: Ongoing AML/KYC procedures, UBO reporting, transaction monitoring, suspicious activity reporting, and adherence to consumer protection rules.
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