Cooperatives and Cooperative Unions in Bulgaria

Last updated: 28 July 2026

A cooperative is an association of at least seven natural persons with legal capacity, with variable capital, which through mutual assistance carries on economic activity in the common interest of its members and comes into existence upon entry in the Commercial Register. A cooperative union is a voluntary association of at least seven cooperatives (territorial, sectoral or national), and the Central Cooperative Union, founded in 1947, is the national umbrella organisation of the cooperative unions in the country. Neither the cooperatives nor the Central Cooperative Union are state institutions. They are private-law, voluntary associations.

The first cooperative in Bulgaria was founded in 1890 in the village of Mirkovo, Sofia Province, as the Mirkovo Lending, Savings and Agricultural Society “Oralo”, and more than 3,000 cooperatives are currently registered and active in the Commercial Register. Yet after 134 years of the cooperative movement in Bulgaria, there is still a degree of misunderstanding among the public, which is by no means confined to any particular age group.

The Most Frequently Asked Questions

• What is a cooperative, a cooperative union and the Central Cooperative Union?
• Are they state-owned?
• Did the socialist regime in Bulgaria create the cooperatives?
• What is the difference between a consumer cooperative, a workers' cooperative, an agricultural cooperative, a forestry cooperative, a cooperative bank, a housing cooperative, an insurance cooperative and others?

What Is a Cooperative?

The Cooperatives Act answers the first question. A cooperative is an association of at least seven natural persons with legal capacity, with variable capital and a variable number of members, who through mutual assistance and cooperation carry on commercial activity to meet their economic, social and cultural interests.

Long before the first cooperative in the world was founded in England in 1844, people came together in various forms, driven by common goals, and met their needs and interests through joint work, mutual assistance and cooperation. In this way, they not only survived and improved life in their communities but also became able to compete with large capital.

Legal Status of a Cooperative

A cooperative is a legal entity. Like commercial companies and non-profit associations, it is a corporate legal entity, that is, one with a membership. Unlike them, however, only natural persons, not legal entities, may be members of a cooperative. A cooperative comes into existence on the day it is entered in the Commercial Register.

Membership of a Cooperative

Membership arises in two ways, when a person is a founder or joins after the cooperative has been registered. A cooperative is open to natural persons who have reached the age of 16 and are not under full guardianship. Minors and persons under limited guardianship may be members with the prior written consent of a parent or guardian. A person may be a member of more than one cooperative.

State Support

The state may support and encourage cooperatives in their activities under conditions and procedures laid down in the relevant special legislation. One example is the Corporate Income Tax Act, which sets out specific rules for determining the taxable financial result of cooperatives (Chapter XVII), and another is Art. 35 of the Cooperatives Act, under which cooperatives and cooperative unions are exempt from all fees relating to their incorporation, transformation, dissolution and liquidation, among others.

Cooperative Enterprises

Every cooperative may set up cooperative enterprises in the form of

• a single-member limited liability company;
• a single-member joint-stock company;

or form inter-cooperative enterprises with other cooperatives in the form of

• a limited liability company;
• a joint-stock company.

Cooperative Union

A cooperative union is an association of at least seven cooperatives. Cooperatives may join together in territorial, sectoral, national and other unions. Membership of a cooperative union is voluntary. A cooperative union is a legal entity with the status of a cooperative. In addition to inter-cooperative enterprises, cooperative unions may form their own unions and federations.

The Functions of a Cooperative Union Are

• to assist its members in achieving the aims and objectives of the union;
• to develop guidelines for the development of cooperative activities;
• to represent and defend the interests of its members before international, state, public and other bodies and organisations;
• to perform other functions provided for in its statutes.

Central Cooperative Union

The Central Cooperative Union is a national union of voluntarily associated cooperative unions and, through them, of consumer and other cooperatives, which, on the basis of cooperative principles and values, supports their organisational, financial and economic development and carries on commercial activity in their common interest and in the interest of their members.

• The Central Cooperative Union was founded in 1947.
• It currently brings together and defends the interests of 92,681 cooperative members in 563 cooperatives belonging to 28 cooperative unions (see the official website of the Central Cooperative Union).

Notable Facts and the History of Cooperative Legislation in Bulgaria

The first cooperative in Bulgaria was founded in 1890.

The First Cooperatives Act in Bulgaria (1907) Provided as Follows

Art. 1. A cooperative association is a society composed of an indeterminate number of members for the purpose of carrying out work jointly and developing the economic interests of its members.

Art. 2. Types of cooperative associations

• Credit associations
• Consumer associations
• Associations for the joint use of machinery
• Associations for joint sales and warehousing
• Producer associations
• Housing construction associations
• Insurance associations

Art. 3. Cooperative associations may be formed by

• public and private cooperatives;
• private individuals (at least seven, being Bulgarian subjects).

A new Cooperatives Act was promulgated on 1 December 1948.

If you are considering setting up a cooperative, our corporate law team can assist you throughout the procedure.