How to Pay a US Company from Bulgaria: A Guide for Non-Resident Entrepreneurs
Introduction
Navigating international payments as a non-resident entrepreneur can be complex, especially when dealing with different regulatory frameworks and tax obligations. This guide provides a practical overview for Bulgarian entrepreneurs looking to pay US companies, covering key aspects such as Bulgarian National Bank (BNB) regulations, the US-Bulgaria tax treaty, SWIFT/SEPA mechanics, and currency conversion considerations.
Bulgarian National Bank (BNB) Regulations and Foreign Exchange
The Bulgarian National Bank (BNB) is the central bank of Bulgaria and an integral part of the European System of Central Banks (ESCB). Its primary objective is to maintain price stability and support EU economic policies. The BNB regulates currency circulation and supervises credit institutions, payment system operators, and payment service providers [1].
Foreign Exchange Controls
Bulgaria generally maintains a liberal regime regarding foreign exchange controls, with no restrictions on payments or currency exchanges for international financial remittances [2]. This allows Bulgarian entrepreneurs to freely transfer funds to US companies. However, all international transfers, including those for goods and services, must be supported by appropriate documentation (e.g., invoices, contracts) provided to the transferring bank. This is a standard anti-money laundering (AML) and know-your-customer (KYC) requirement, aligning with EU directives [4].
BGN/EUR Peg and USD Conversion
The Bulgarian Lev (BGN) has a fixed exchange rate to the Euro (EUR) at 1 EUR = 1.95583 BGN [2]. This currency board arrangement ensures stability. While Bulgaria is expected to join the Eurozone on January 1, 2026, payments to the US currently involve a two-step conversion: BGN to EUR (at the fixed rate) and then EUR to USD (at the market rate). This process can introduce additional costs and exchange rate fluctuations. Banks typically handle the BGN to EUR conversion at the fixed rate, and then the EUR to USD conversion at the prevailing market rate, plus any applicable fees.
US-Bulgaria Tax Treaty: Withholding Tax (WHT) on Payments
The Convention between the Government of the United States of America and the Government of the Republic of Bulgaria for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed on February 23, 2007, and effective since December 15, 2008, aims to prevent double taxation and reduce withholding tax rates on cross-border payments [3].
Withholding Tax Rates
For payments from a Bulgarian entity to a US company, the treaty provides reduced withholding tax rates on certain types of income [3]:
- Dividends:
- 5% of the gross amount if the beneficial owner is a company directly owning at least 10% of the voting stock of the paying company.
- 10% of the gross amount in all other cases (portfolio dividends).
- Interest: Generally, the withholding tax rate is 5% of the gross amount. Exemptions may apply for interest beneficially owned by governments, pension funds, or financial institutions, provided it's not part of a back-to-back loan arrangement.
- Royalties: The withholding tax rate is generally 5% of the gross amount.
To benefit from these reduced treaty rates, the US company receiving the payment typically needs to provide a valid Form W-8BEN-E (Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)) to the Bulgarian payer, certifying its eligibility [4].
SWIFT/SEPA Mechanics for International Payments
When paying a US company from Bulgaria, the primary method for international transfers is the SWIFT network. SEPA (Single Euro Payments Area) is generally not applicable for direct transfers to the US.
SWIFT Transfers
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the global network for secure, standardized financial transactions. Payments from Bulgaria to the US are almost always routed via SWIFT.
- Process: You will need the US company's bank name, SWIFT/BIC code, account number, and full address. Your Bulgarian bank will process the transfer, converting BGN to EUR (fixed rate) and then EUR to USD (market rate). Funds are then sent through SWIFT to the US recipient's bank.
- Fees: SWIFT transfers typically involve fees from sending, receiving, and potentially intermediary banks. Bulgarian banks may charge €15 to €50 or more for outgoing international transfers [5]. The US receiving bank may also levy a fee for incoming international wires. Exchange rate markups are a common additional cost.
- Processing Times: SWIFT transfers usually take 1-5 business days to reach the recipient's account.
SEPA Transfers (Limited Relevance for US Payments)
SEPA simplifies euro-denominated bank transfers within Europe. While Bulgaria is part of the SEPA area, SEPA transfers are generally not used for direct payments to the US as the US is not a SEPA member. A SEPA transfer might be possible if a US company has a euro-denominated bank account within the SEPA zone, but this is less common for direct payments to US-domiciled accounts.
Practical Steps for Paying a US Company from Bulgaria
Here’s a step-by-step guide for making payments:
- Gather Recipient Information: Obtain full bank details from the US company: Beneficiary Name and Address, Bank Name and Address, SWIFT/BIC Code, US Bank Account Number, and Routing Number.
- Confirm Payment Amount and Currency: Agree on the exact amount in USD. Be aware of the BGN/EUR fixed peg and the fluctuating EUR/USD exchange rate.
- Choose Your Bulgarian Bank: Major Bulgarian banks like UniCredit Bulbank, DSK Bank, First Investment Bank (Fibank), and Raiffeisenbank Bulgaria offer international SWIFT transfer services. Compare their fees, exchange rates, and processing times.
- Initiate the Transfer: Use online banking or visit a branch. Provide invoices, contracts, or other documents justifying the payment for AML/KYC compliance.
- Monitor the Transfer: Track the transaction using the SWIFT reference number. Inform the US recipient of payment details.
- Consider Alternative Payment Providers: Services like Wise (formerly TransferWise) or Revolut can offer lower fees and better exchange rates, especially for smaller to medium-sized amounts.
Keystone Bridge Global's Role
Keystone Bridge Global assists non-resident entrepreneurs in establishing and managing their US business presence. We provide comprehensive guidance on regulatory compliance, tax implications, and practical steps for international transactions. Our expertise helps you navigate cross-border operations, ensuring efficient and compliant payments to US companies.
Conclusion
Paying a US company from Bulgaria involves understanding BNB regulations, using the US-Bulgaria tax treaty for WHT reductions, and utilizing the SWIFT network. By preparing documentation, choosing the right banking partner or payment provider, and being aware of currency conversion dynamics, Bulgarian entrepreneurs can ensure smooth and compliant transactions with their US counterparts.
This guide is not legal, tax, or financial advice. Regulations change — verify current requirements with a licensed professional before acting.
References
[1] Law on the Bulgarian National Bank. (2024). Bulgarian National Bank. Retrieved from https://www.bnb.bg/bnbweb/groups/public/documents/bnb_law/laws_bnb_en.pdf [2] Bulgaria - Trade Financing. (2026). U.S. Department of Commerce. Retrieved from https://www.trade.gov/country-commercial-guides/bulgaria-trade-financing [3] Convention Between the Government of the United States of America and the Government of the Republic of Bulgaria for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. (2007). U.S. Department of the Treasury. Retrieved from https://home.treasury.gov/system/files/131/Treaty-Bulgaria-2-23-2007.pdf [4] Why Bulgarian Banks Reject Foreigners — KYC Explained (2026). (2026). Innovires. Retrieved from https://innovires.com/tax-residency/blog/why-bulgarian-banks-reject-foreigners.html [5] Send Money from Bulgaria to the USA | 11 Cheap Ways to Transfer 2026. (n.d.). Monito. Retrieved from https://www.monito.com/send-money/bulgaria/united-states/bgn/usd
For the broader picture on this topic, see our guide on how to pay a US company from your country.