Banking Oversight & Euro Readiness
As part of the euro area entry process, Bulgaria entered a close cooperation agreement with the European Central Bank (ECB) and the Българска народна банка (Bulgarian National Bank) in 2020. Since 1 October 2020, the ECB has directly supervised four significant Bulgarian banks and overseen 13 additional institutions, helping ensure the country's financial systems meet eurozone standards.
This deepened oversight has positioned Bulgaria to seamlessly align its banking operations and regulations with those of the euro area, supporting business continuity across borders.
Implications for Global Payroll & Mobility
Here are key points for HR, finance, and global mobility teams to consider:
- Payroll Adjustments: Contracts, salary structures, and payment systems denominated in BGN may need updates to reflect euro values starting in 2026.
- Compensation Planning: Companies should begin assessing how the switch to the euro will impact net compensation, benefits calculations, and compliance with statutory payroll requirements.
- Relocation Packages: Mobility professionals may need to revise cost-of-living allowances or relocation budgets, especially for assignees in Bulgaria or those transferring to the country.
- Accounting & Reporting: Financial systems and reporting tools must be reconfigured to handle the euro as the functional currency for Bulgarian operations.
Timeline
Although the official switch to the euro takes effect on 1 January 2026, employers with a Bulgarian workforce should start preparing now. HR and finance departments will need coordinated efforts to address technical, regulatory, and communication aspects of the transition.
The ECB and the Bulgarian National Bank will continue monitoring the lev’s performance against the euro on international markets until the transition date. This ongoing collaboration helps ensure exchange rate stability and predictability for business operations.
Bulgaria – Global Insights
For further detailed guidance on payroll, employment law, and compliance in Bulgaria, visit our Bulgaria Global Insight guide on the activpayroll website. You can also explore broader regional updates and expertise in the EMEA Global Expertise web section.
Next Steps
If you have any questions or need tailored advice, we encourage customers and potential clients to get in touch. Please complete our Contact Us form, and a member of our team will be happy to assist with your queries.
