Requirements for Provision of Services under Secondment Agreements
9 July 2025Corporate Clients Insights, Private companies
The growing demand for skilled workforce compels businesses to adopt more flexible and efficient recruitment strategies. In many cases, large organisations with substantial human resources find it advantageous to establish partnerships with specialised service providers. These partnerships often involve professional support in the process of onboarding new personnel. One such solution is the use of secondment agreements, which enable businesses to temporarily access qualified staff through structured arrangements, providing an effective means to address immediate staffing needs.
A secondment agreement is a legal contract under which an employee (secondee) is temporarily assigned by their original employer (the translation in Bulgarian is rather long: временно предприятие, осигуряващо работа) (seconder) to work for another organisation or a different part of the same organisation (in Bulgarian: предприятие ползвател) (host), while remaining employed by the original employer.
The core regulation of secondment activities is stipulated from section 107r to 107ch of the Labour Code 1987.
A secondment agreement involves three main parties: the original employer (seconder), the employee (secondee), and the receiving organisation (host). The seconder is the employer who temporarily transfers their employee to another organisation. The secondee is the employee who is being seconded. The host is the organisation that receives the secondee for a specified period.
We set out below the requirements under Bulgarian law for seconders to provide services under secondment agreements where they have to meet not only the general requirements for employers, but are also subject to additional provisions.
Who can be a Seconder?
A seconder can be:
- domestic natural person, or
- domestic legal person, or
- foreign legal person.
In practice, the above-mentioned requirement means that a foreign national intending to conduct business in Bulgaria as a seconder must either establish a Bulgarian company or operate through a foreign company that conducts business activities within Bulgaria. For existing foreign companies seeking to expand their operations into the Bulgarian market, this rule allows them to provide secondment services either directly or through a locally registered subsidiary.
Registration requirements for Seconders
Entities or individuals intending to act as seconders are required to register with the Bulgarian Employment Agency (EA). To initiate the registration process, the prospective seconder must submit an electronic application, accompanied by a prescribed set of supporting documents. These documents include:
- Group insurance or an unconditional and irrevocable bank guarantee at the amount of BGN 200,000 for covering potential employees’ claims.
- Development and adoption of internal regulations for carrying out of secondment activities (including draft of agreements with potential hosts and secondees)
- Evidence that the seconder is:
- without outstanding debts to the state and/or the municipalities;
- not insolvent or is not in insolvency proceedings;
- not in liquidation proceedings;
- with an active registration for provision of secondment services which has not been terminated;
- not been imposed with administrative sanctions for the provision of secondment services without registration;
- represented by an individual who has not been convicted of a deliberate offence of a general nature.
The set of documents required to accompany the application varies depending on whether the prospective seconder is a domestic or foreign entity. In the case of domestic entities, the EA conducts certain verifications ex officio, and therefore does not require submission of the full documentation. Domestic applicants are generally required to provide only a group insurance policy or bank guarantee, along with their internal regulations. In contrast, foreign entities must submit the complete set of required documents in support of their application.
An additional distinction arises based on the nationality of the seconder’s director. If the director is a Bulgarian citizen, the EA conducts an ex officio check to verify whether the individual has been convicted of a deliberate criminal offence of a general nature. However, where the director is a foreign national, they are required to submit a Criminal Record Certificate or an equivalent official document to demonstrate a clean criminal background.
Once the EA receives the application along with the required supporting documentation, it proceeds to review the submission. If the application is complete and accurate, the EA will issue a decision within 14 days of receipt. In cases where the application is found to be incomplete or contains inaccuracies, the EA will issue instructions and set an additional deadline for the applicant to make the necessary corrections.
Upon approval, the seconder is required to pay a registration fee, which, as of November 2024, amounts to BGN 1,021 (approximately €522). This fee remains unchanged for the time being. Following payment, the EA issues an electronic certificate of registration, which is valid for five years and may be renewed upon expiration.
Compliance requirements for Seconders
The crucial compliance requirements can be divided into the following two groups:
- Registration maintenance – connected to the proper administration of the registration and notifying/provision of required information to the respective authorities.
- Labour law compliance – connected to proper organisation of the relationships between the seconder, its secondees and hosts.
It is important to highlight that the seconder is the original employer of the secondees who are assigned to hosts. The seconder charges and pays the secondees’ wages, provides them with insurance and with documents relating to their employment relationship.
The seconder must comply not only with the general labour law requirements applicable to all employers, but also with a set of specific obligations tailored to the nature of secondment arrangements. These specific requirements are primarily aimed at safeguarding the rights and welfare of the secondees. For example, the seconder is prohibited from assigning personnel to work in environments classified by law as hazardous or harmful to health, as well as to host entities involved in activities related to national security or undergoing strike action. Additionally, there are several provisions designed to prevent the seconder from obstructing or delaying the commencement of work by the secondees at the host entity.
In addition, there are also restrictions related to the employment agreement itself as it can be entered with an employee only until the completion of certain work or for replacement of an employee of the host. It should be further noted that the secondees assigned with hosts shall not exceed 30% of the total number of the hosts’ employees. These rules come to preserve the labour market and to not distort staff structure.
Throughout the period of registration the seconder must meet the respective registration requirements and the requirements under the applicable labour law. Otherwise, the seconders’ activities may be regarded as non-compliant to the applicable legislation and may lead to fines and termination of their registration within the EA.
Assistance for Seconders and Host Organisations
The provision of secondment services is related to multiple requirements which shall be considered not only when starting a secondment’s business, but throughout the whole registration period. Thus, it is important to have a reliable and experienced advisor when a decision to provide secondment services is made.
NBLO’s lawyers and advisers are happy to assist through the whole process. Our team has a deep understanding of the registration and compliance requirements and handles the necessary work, both for the initial process of registration or assistance and advice on an ongoing basis.