Running a Restaurant or Hotel in Bulgaria as a Foreign Owner: Accounting Essentials

Bulgaria attracts foreign investors in hospitality – from city restaurants in Sofia to hotels on the Black Sea coast and in the mountain resorts. The opportunity is real, but so is the administrative workload. Hospitality is a closely monitored sector, and several local rules may differ from what an international owner is used to.

This overview highlights the areas that deserve attention before and after opening.

1. Fiscal devices and cash control

Sales to customers must be documented in accordance with Bulgarian fiscal and invoicing rules. Cash, card and delivery-platform settlements should be reconciled with fiscal reports, POS statements and bank movements.

Typical control issues include unrecorded sales, differences between cash on hand and the daily fiscal report, and incomplete documentation for cash withdrawals or corrections.

For an owner managing the business from abroad, a reliable daily and monthly reconciliation process is essential.

2. VAT

Restaurant and catering services are currently subject to the standard 20% VAT rate, while accommodation services benefit from the reduced 9% rate. Because VAT rules have changed in recent years, the configuration of fiscal devices, invoicing software and accounting records should be reviewed whenever the law changes.

VAT registration may become mandatory when the statutory conditions are met. Voluntary registration can also be relevant, especially where significant initial investment creates input VAT, but the decision should be reviewed in the context of the business model.

3. Staff and payroll

Hospitality relies heavily on shift work, seasonal staff and variable working hours. Employment documentation, payroll and working-time records must therefore be organised carefully.

Key areas include registration of employment relationships before work begins where required, cumulative recording of working time where applicable, night and overtime work, work on public holidays, and correct documentation of seasonal employment.

4. Tourist tax and ESTI

Accommodation providers have local tourist-tax obligations, with rates determined by the relevant municipality.

Guest information must also be submitted through ESTI – the Unified Tourist Information System – in accordance with the tourism legislation. These obligations sit alongside the regular accounting and tax compliance of the business.

5. Knowing your numbers

Compliance is only half of the picture. A foreign owner also needs clear monthly management reporting, ideally in English.

Useful indicators include:

• food and beverage cost as a percentage of sales;
• staff cost as a percentage of sales;
• revenue and margin by activity – rooms, restaurant, events, delivery or other outlets;
• cash flow and upcoming tax and payroll liabilities.

These numbers allow decisions on menus, pricing, staffing and investment to be made before problems appear in the annual accounts.

Practical example: a foreign-owned guesthouse

Illustrative scenario. Not based on an actual client.

The situation. A foreign investor acquires a small guesthouse with a restaurant on Bulgaria’s Black Sea coast. Reservations, cash receipts, card settlements and booking-platform payouts are recorded in different systems. Platform commissions and refunds are not always reconciled, and the owner, who lives abroad, cannot easily assess performance or upcoming reporting obligations.

The approach. A monthly reporting process brings together accommodation records, cash-register data, card-terminal statements and booking-platform reports. Gross bookings, commissions, adjustments and net transfers are reconciled to the accounting records. Tourist tax, VAT-related obligations and seasonal payroll planning are followed through a clear compliance calendar.

Potential outcome. The owner receives a concise English-language overview of income by channel, key operating costs and pending obligations. Decisions about next season’s pricing and staffing can be based on comparable, documented figures rather than fragmented reports.

How we help

Nubes Soft is an accounting and business-services firm in Sofia with experience in restaurants, bars and hotels. We support bookkeeping, VAT, payroll, tourist-tax reporting and annual accounts, and we can provide management reporting and communication in English.

→ Accounting for foreign-owned companies in Bulgaria

Author: Nikolet Valcheva, Managing Director, Nubes Soft

This article is for information only and does not replace individual advice.