Setting up a company in Bulgaria can be a good move for digital nomads who want to have a foot on the ground in Europe.
In this article, we’ll have a look at all the benefits but also discuss the attention points, as well as the actual process.
Benefits of Setting Up a Company in Bulgaria
Opening a company in Bulgaria comes with plenty of benefits:
- Limited liability: by opening a company you can limit your personal liability. Your customers can only come after your company.
- Favorable corporate tax rate: the corporate tax rate in Bulgaria is set at a fixed rate of 10%, payable on your profit after expenses.
- Low dividend tax: Bulgaria has a dividend tax of just 5% which is the lowest in Europe.
- EU-access: Bulgaria is part of the European Union and gives you access to it. By opening a company you can trade as a reputable European company.
- No minimum capital: if you open a OOD or EOOD the minimum capital you need to deposit is just €1.
- Full ownership: in Bulgaria any individual can open and fully own a company.
- Cost-efficient: opening and running a company in Bulgaria is relatively cost-efficient compared to some other jurisdictions.
Disadvantages of Setting Up a Company in Bulgaria
Yet, we shouldn’t act like it’s only a good news show. If you plan to open a company in Bulgaria, you also need to acknowledge the following disadvantages:
- No quick fix: opening a company doesn’t fix all your tax issues if you keep living in a high tax country. Any money coming out of the company will still be subject to the tax rules of your country of tax residency.
- Administrative burden: you have to take care of recurring compliance requirements like keeping proper bookkeeping and filing tax returns.
- Banking access: opening a bank account for a Bulgarian company has become increasingly harder, especially if the owner or director doesn’t have a Bulgarian residence permit.
Steps to Register a Company in Bulgaria
If you want to register a company in Bulgaria, you need to take a few steps.
Decide Company Structure
The first step if you want to open a company in Bulgaria is to decide on the exact structure of the company.
This will mostly depend on the amount of people involved.
If you will have more than one shareholder, you need to open an OOD. However, if you’ll be the only owner, the right company structure is an EOOD.
Gather and Prepare Documentation
After you know which structure is right for you, you need to collect and prepare all necessary documents:
- Paid-up capital: confirmation from your bank that you deposited the capital of at least €1 in a special capital account.
- Articles of incorporation: these will set out the rules on how the company will be run.
- Founding meeting minutes: meeting minutes of the meeting during which you incorporate the company.
- Appointment director: you need to decide who will act as the representative of the company and appoint this person as director. The director needs to formally accept this responsibility.
- Application form A4: you file this application form with the Bulgarian Commercial Register to open your company.
- Mandatory declarations: you have to confirm some mandatory declarations pursuant different laws.
As part of this process you’ll also have to decide on the company name and where it will have its address.
Receive Company Number
After your application is processed and approved, you will receive your Bulgarian Unified Identification Code or company number.
This is a unique number to identify your company that you will also use in your correspondence with the authorities. It confirms that your company exists.
Open Bank Account
After the incorporation you can open a corporate bank account for your company to use for day-to-day company transactions.
You can also transfer the capital you deposited earlier to this account to actually use it.
As part of the opening process, the bank will not only need information about the company but also about you as the owner.
You’ll have to provide information about the director and shareholder of the company and their personal details.
In our experience, this is easier to manage if you have a Bulgarian residency permit. For that reason, we recommend people who also want to move to Bulgaria to first get their residency permit and only afterwards start with the company incorporation process.
Recurrent Compliance
Make sure that you or your accountant takes care of all recurrent compliance.
This includes:
- Monthly payroll
- Social security declarations
- VAT returns
- Bookkeeping
- Corporate tax returns
As part of this, you might need to handle some one time registration with the authorities (e.g. for VAT).
Bulgaria Company Formation Cost Breakdown
If you plan to open a company in Bulgaria you need to consider various costs.
On the one hand there are multiple government fees that you incur as part of the process. On top of that, you’ll need the assistance of a notary and a lawyer or accountant.
Therefore, the overall cost of setting up a company in Bulgaria amounts to at least €1.500 if get help from good professionals but it really depends on the circumstances.
If you don’t become a resident yourself, the fees the bank charges you for opening an account will also be higher. Luckily, these costs are normally a one-off so you’ll only encounter them in the first year.
Furthermore, you’ll need a registered address for your company. For a decent address this will set you back around €600 per year.
Obviously, there are also recurring costs of accounting etc. which will depend on your actual needs.
If you also want to move your personal tax residency to Bulgaria, you’ll also need to get a residency permit.
The cost for this is approximately €400. However, please also take into account that you need an address and notarized declaration from the landlord to obtain your residency permit.
If you plan to open a company in Bulgaria, we always recommend to try to also move your personal tax residency there. In this way, you can benefit of the low personal income taxes in Bulgaria.
Moreover, this lowers the risk of any trouble with tax authorities as both you and your company are established in the same country.
FAQ on Setting Up a Company in Bulgaria
Let’s have a look at some frequently asked questions that come up when we’re speaking about opening a company in Bulgaria.
Can a Foreigner Open a Company in Bulgaria as Non Resident?
Yes, a foreigner can open a company in Bulgaria as non resident.
However, it can complicate things a bit when you want to open a bank account for the company. Over the past years, Bulgarian banks increased their KYC checks. Therefore, they prefer to deal with individuals who have a Bulgarian resident permit as it makes their life easier.
Most banks will also charge higher costs for opening an account for a company with a non-resident director or shareholder than when a resident is involved.
Does Bulgaria Levy Withholding Taxes?
Yes, Bulgaria levies a 5% withholding tax on dividends.
If you are a Bulgarian tax resident, that constitutes the final tax you have to pay on the dividend.
However, as a foreign shareholder you might still have to pay additional taxes in your home country. This will depend on your home country’s tax rules and the provisions of double tax treaties.
In case of interest or royalties, a withholding tax of 10% applies.
Is Bulgaria a Good Place to Start a Business?
Yes, Bulgaria is a good place to start a business for various reasons:
- Tax: Bulgaria offers one of the lowest corporate tax rates in Europe at 10%. On top of this, the dividend tax is also only 5%.
- Access to Europe: Bulgaria is also part of the European Union and offers you access to the European market.
- Currency: since 2026 it adopted the Euro as its currency. This makes doing business with other countries even easier.
- Costs: the cost of opening and running a business in Bulgaria are relatively low.
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