At the end of 1895 Schatz moved to Sofia, the capital of Bulgaria, where he lived until 1905. Bulgaria had once been a powerful independent kingdom, but in the fourteenth century it was conquered by the Turks. In 1878 Bulgaria was proclaimed an independent Christian principality, and in 1887 Prince Ferdinand of Saxe-Coburg-Gota-Kohary was appointed Prince of Bulgaria. In his efforts to remove all traces of Turkish rule and emphasize the ancient Slavic elements of Bulgarian culture, he urged artists to reveal the beauty and grace of folk life.
The elite corps of Bulgarian artists needed to realize Ferdinand's ambitious program would require training at a central art academy. Schatz was among the founders of the National School of Fine Arts in Sofia, and its first sculpting instructor, and he also received commissions for prestigious national projects. In 1896 he began work on a series of sculptures portraying Bulgarian folk types.