Expert Guide on Use of outsourced IT personnel in Bulgaria

Yes.

Tax and social security specifics should be considered in hiring relationships.

Yes.

However, the specific terms and conditions of the engagement should be carefully considered to avoid the risk of requalification of a service contract as employment contract.

No.

Nevertheless, registration as private entrepreneurs (or equivalent) could mitigate the risk of requalification of a service contract as an employment contract. It could also be more favourable for the assigning company from a tax and social security perspective.

Yes.

Proper drafting of the agreement is required to avoid the risk of breaching employment legislation (including on temporary staff leasing) and financial liability for the assigning company.

Possible, depending on the specific circumstances in the case. The specific terms and conditions of the engagement should be considered. The relationship should be properly structured and the agreement should be carefully drafted to mitigate the risk of requalification.

No. 

This might depend on the individual case and may have some practical issues.

N/A.

No. 

Yes.

This may in certain circumstances create an obligation to pay corporation tax due to a permanent establishment having been created.

Yes.

Depending on the case, a service contract or an employment contract with proper provisions on assignment or licensing of intellectual property rights.

A service contract with proper provisions on assignment or licensing of intellectual property rights. Where personal data is processed in the performance of the contract, a data processing agreement is also likely to be required.

Yes.

Depends on the specific contractual relations of the case. In the context of employment relations, the general setup is that the copyright over computer programmes and databases created under employment belongs to the employer. In the case of service contracts, it is possible to agree direct vesting of copyright and related rights to the assignor. Nevertheless, attribution rights are not transferrable, i.e. the right to claim authorship and the right to be recognised as the author.

Yes. 

The term “work for hire” is not used in Bulgarian law. The general notion of “work for hire” applies to the creation of computer programmes and databases under employment. In addition, under service contracts it is possible to agree on the direct vesting of copyright and related rights to the assignor. Nevertheless, attribution rights are not transferrable, i.e. the right to claim authorship and the right to be recognised as the author.

IP assignment agreement or employment agreement (in the case of employment).

Noncompete/non-solicitation arrangements are common but difficult to enforce and some of them might be considered void. For example, noncompete arrangements for a period after the expiration of an employment contract are generally considered void as restricting the constitutional right to work.

Yes. 

However, pursuant to Regulation (EC) No 593/2008 (Rome I), where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties will not prejudice the application of provisions of the law of that other country that cannot be derogated from in the agreement.

Yes. 

However, they depend on the specific contractual relations of the case. Warranties and indemnities are common provisions in service contracts. In the context of employment relations such provisions are rare due to the strict rules regarding the financial liability of employees under the applicable law.