After years of preparation, Bulgaria is now set to join the eurozone on January 1, 2026. For businesses across the country, this isn’t just a monetary change—it’s a strategic shift that impacts contracts, accounting systems, pricing, employee payroll, and customer expectations.

Currency transitions can either streamline business operations or create serious disruptions, depending on how well-prepared an organization is. In this article, we’ll cover everything you need to know—from the macroeconomic backdrop to the technical changes your business will need to make and when to seek expert help.

Why the Euro, and Why Now?

Bulgaria has maintained a fixed exchange rate with the euro for over two decades, pegged at 1 EUR = 1.95583 BGN. Since joining the European Union in 2007, euro adoption has been the logical next step—but one that required compliance with the Maastricht convergence criteria:

• Inflation no more than 1.5 percentage points above the EU average
• Public deficit below 3% of GDP
• Debt-to-GDP ratio below 60%
• Long-term interest rates within 2% of the EU average
• At least two years in ERM II without severe tension

By mid-2025, all indicators aligned. The European Commission and European Central Bank confirmed that Bulgaria fulfilled the conditions in their latest Convergence Report (ECB, 2025). On July 8, 2025, the EU officially approved Bulgaria’s entry into the eurozone.

This marks the final stretch of a long journey—and a crucial moment for businesses to act.

Compliance Timeline: What to Do and When

Economic and Strategic Benefits for Businesses

1. Elimination of Exchange Rate Risk

Over 60% of Bulgaria’s exports are destined for EU countries, making the euro a natural fit for trade (Eurostat, 2024). Businesses will no longer need to hedge against currency volatility or incur foreign exchange costs, improving pricing transparency and simplifying contracts—much like Slovakia’s experience after its 2009 euro adoption (European Central Bank, 2010).

2. Reduced Transaction Costs

Euro adoption eliminates conversion fees and enables businesses to access euro-denominated loans and financial services under better conditions. This promotes lower-cost borrowing and smoother cross-border operations.

3. Greater Investor Confidence

In July 2025, Fitch Ratings upgraded Bulgaria’s credit rating to BBB+ with a positive outlook, citing institutional progress and euro readiness (Fitch Ratings, 2025). A similar effect occurred in Estonia, where euro adoption in 2011 preceded an increase in FDI and a subsequent rating upgrade (European Commission, 2012).

4. Participation in the Euro Area Infrastructure

With euro adoption, Bulgaria will integrate into the key financial and monetary infrastructure of the Eurozone, including:

• SEPA (Single Euro Payments Area): Enables fast, secure, and standardized euro-denominated transactions across EU member states.
• TARGET2: Provides real-time gross settlement for large-value payments between banks within the eurozone, enhancing financial stability and integration.
• ECB Monetary Tools: Grants access to the European Central Bank’s refinancing operations and liquidity support mechanisms, strengthening monetary policy transmission.
• Pan-European Financial Initiatives: Allows participation in projects like the digital euro and promotes harmonized innovation in banking, payments, and fintech across the EU.

Highlighting Transition Costs

While the benefits are clear, businesses must not underestimate the costs of transition—especially smaller enterprises.

According to the European Commission’s 2023 report on Croatia’s euro adoption, SMEs faced average one-time expenses between €3,000–€10,000, depending on system complexity. These included:

• ERP and POS software upgrades
• Legal consultations for contracts and bylaws
• Employee training programs
• Dual pricing implementation

Bulgaria’s businesses should budget for similar costs and explore potential state or EU grants aimed at easing the transition for SMEs.

Business Risks and How to Mitigate Them

Case Study: Lessons from Croatia’s 2023 Euro Transition

When Croatia adopted the euro on 1 January 2023, over 80% of SMEs reported operational difficulties, primarily due to:

• Outdated financial and retail software that could not accommodate dual pricing or euro accounting;
• Insufficient staff training in handling customer queries or legal adjustments;
• Lack of clarity in contracts and invoices during the switchover period.

The European Commission’s Post-Adoption Assessment Report (2023) concluded that early action on IT upgrades and staff preparedness were the strongest predictors of a smooth transition.

Key takeaway for Bulgarian businesses: Avoid assuming the fixed conversion rate will make the transition seamless—practical readiness in systems, people, and procedures is critical for compliance and customer confidence.

Preparing Your Business: Checklist

Finance & Accounting
• Switch ledgers to EUR
• Prepare EUR-based opening balances
• Update VAT systems and filings

Legal
• Review fixed-value contracts
• Add conversion clauses
• Update bylaws and corporate capital (by Jan 2027)

Systems & IT
• Replace or upgrade incompatible software
• Test POS and ERP systems for EUR compliance
• Adjust dashboards and reporting formats

HR & Payroll
• Convert salaries and benefits to EUR
• Train HR and payroll staff
• Communicate changes to all employees

Client & Vendor Relations
• Inform partners of pricing and billing changes
• Update websites, contracts, brochures

Final Thoughts

The transition to the euro is not just regulatory—it is strategic. Well-prepared businesses will not only ensure compliance but unlock new efficiencies, markets, and financial tools. Those who act early will avoid disruptions and seize competitive advantages in a modernized European marketplace.

TGS Bulgaria stands ready to support your journey with:

• Financial compliance reviews
• ERP and system transition audits
• Strategic consulting for cross-border growth

Sources

1. 1. European Central Bank (2025). Convergence Report, June 2025. Retrieved from https://www.ecb.europa.eu/pub/convergence/html/index.en.html

   2. European Commission (2023). Post-Adoption Assessment Report: Croatia’s Euro Transition. Directorate-General for Economic and Financial Affairs. Retrieved from https://economy-finance.ec.europa.eu

   3. Fitch Ratings (2025, July). Bulgaria – Rating Action Commentary: BBB+ Outlook Positive. Retrieved from https://www.fitchratings.com

   4. Eurostat (2024). Bulgaria – Intra-EU Trade Statistics. Retrieved from https://ec.europa.eu/eurostat

   5. European Central Bank (2010). The Euro in Slovakia: Five Years Later. Retrieved from https://www.ecb.europa.eu

   6. Bulgarian National Bank (2024). Euro Adoption in Bulgaria – Key Information. Retrieved from https://www.bnb.bg