Company Formation in Bulgaria - Emigrate to Bulgaria
Table of Contents
General Information about Bulgaria
Bulgaria borders Romania to the north, Serbia to the west, Greece and Turkey to the south, and the Black Sea to the east. The major cities are Sofia, Plovdiv, Varna, Burgas, and Ruse.
Key Facts about Bulgaria
- Member of the European Union since January 1, 2007
- Member of NATO since March 29, 2004
- Member of the Schengen Area (Air and Sea Borders) starting March 1, 2024
- Official Language: Bulgarian
- Capital: Sofia
- Government Type: Parliamentary Republic
- Population: 6.9 million
- Gross Domestic Product: 90 billion USD
- Internet TLD: .bg
- Currency: Bulgarian Lev (BGN)
- Country Code: +359
Key Facts about the Tax System in Bulgaria
- Personal Income Tax Rate: 10%
- Social Security Contributions: 32.7 – 33.4%
- Corporate Tax Rate: 10% (standard)
- Withholding Tax: 5% (dividends)
- VAT Rate: 20% (standard), 9% (reduced)
Important Developments in Bulgaria
Increase of the minimum wage to 477 EUR (gross)
Accession to the Schengen Area
Increase in the threshold for VAT liability
Company Formation in Bulgaria
Starting a company in Bulgaria is a logical consequence of globalization and increasing competition for many entrepreneurs, especially those in trade and production. More and more energy-intensive companies are also relocating to Bulgaria, moving entire operations to the Balkan country. The benefits of establishing a company in Bulgaria are manifold. In addition to low wage levels and energy costs, taxes can also be a decisive reason to start a business in Bulgaria.
Target Group
Who is suited for company formation in Bulgaria?
Due to its business-friendly environment, there are very few restrictions on the individuals eligible for company formation in Bulgaria.
Of course, it depends on your business model and the goals you aim to achieve. Typically, our clients come from the following industries and groups:
- Marketing / Sales / Media
- Coaching / Speakers / Writers
- IT / Programming
- HR / Recruiting
- Remote Workers
- Trade
- Production
- Services
- Logistics
- Commission-based businesses
Advantages
- Low wage levels
- Affordable square meter prices
- Low corporate tax rates
- Low tax rates for freelancers
- Favorable geographic location
- Good logistics
- Member of the European Union
- Member of the Schengen Area
- Member of NATO
Legal Forms in Bulgaria
What legal forms exist in Bulgaria? The most common legal form for corporations is undoubtedly the limited liability company (OOD/EOOD), but sole proprietorships (ET) are also frequently encountered.
| German designation | Bulgarian designation |
| Limited Liability Company ( LLC ) | Дружество с ограничена отговорност (ООД) |
| Public limited company (PLC ) | Акционерно дружество (АД) |
| Limited partnership (LP) | Събирателно дружество (СД) |
| Limited partnership (LP) | Командитно дружество (КД) |
| Sole proprietorship | Едноличен търговец (ЕТ) |
Since the Bulgarian OOD/EOOD is the most common legal form among corporations, the following text will primarily focus on the OOD/EOOD.
Taxes and Contributions for Legal Entities in Bulgaria
| Scope of application | Tax or duty type | Tax rate / Tax burden | Basis |
| All corporations (OOD/EOOD/AD) | Corporate tax | 10% | Profit |
| All corporations (OOD/EOOD/AD) | Withholding tax / Dividend tax | 5% | Profit distribution |
Key Features of the Bulgarian Limited Liability Company
- Legal Form: Legal entity that acquires its own legal personality upon registration in the Commercial Register
- Number of Shareholders: Minimum one shareholder, no maximum limit
- Share Capital: 2 BGN
- Liability: Limited liability of shareholders to the amount of their contributions, the company is liable with its assets
- Management: At least one natural person
- Accounting: Obligation to maintain accounts
- Bodies: General Meeting of Shareholders, Management, Supervisory Board (optional)
Tax Comparison between Germany and Bulgaria
In the following examples, all profits are to be withdrawn by a natural person with the corresponding tax residence in the respective country and transferred to personal assets:
| Basis: 100,000 € annual profit | |
 Germany |
 Bulgaria |
| 15.000 EUR (15% Corporate tax) | 10.000 EUR (10% Corporate tax) |
| 15.000 EUR EUR (ca. 15% Business tax) | - |
| 17.500 EUR (25% Capital gains tax) | 4.500 EUR (5% Dividend tax) |
| 963 EUR (5,5% Solidarity surcharge) | - |
| 48.463 EUR (48,46% Total tax burden) | 14.500 EUR (14,5% Total tax burden) |
| -33.963 EUR Taxes per year (-70%) | |
| Basis: 200,000 € annual profit | |
|
Germany |
Bulgaria |
| 30.000 EUR (15% Corporate income tax) | 20.000 EUR (10% Corporate income tax) |
| 30.000 EUR EUR (ca. 15% Business tax) | - |
| 35.000 EUR (25% Capital income tax) | 9.000 EUR (5% Dividend tax) |
| 1.926 EUR (5,5% Solidarity surcharge) | - |
| 96.926 EUR (48,46% Total tax liability) | 35.000 EUR (14,5% Total tax liability) |
| -67.926 EUR Taxes per year (-70%) | |
| Basis: 300,000 € annual profit | |
|
Germany |
Bulgaria |
| 45.000 EUR (15% Corporate income tax) | 30.000 EUR (10% Corporate income tax) |
| 45.000 EUR EUR (ca. 15% Business tax) | - |
| 52.500 EUR (25% Capital income tax) | 13.500 EUR (5% Dividend tax) |
| 2.889 EUR (5,5% Solidarity surcharge) | - |
| 145.389 EUR (48,46% Total tax liability) | 43.500 EUR (14,5% Total tax liability) |
| -101.889 EUR Taxes per year (-70%) | |
As you can see, the tax in Bulgaria is very easy to calculate, and the fact that not half of the profit disappears to the state is highly motivating. The numbers speak for themselves.
Payroll and Salary Calculation in Bulgaria
| Simplified calculation scheme for the tax burden on wages and salaries | |
| Amount | Designation |
| 1.200,00 EUR | Gross salary |
| - 165,36 EUR | Social security for employees (13,78%) |
| = 1034,64 EUR | Taxable income |
| - 103,46 EUR | Personal income tax (10%) |
| = 268,82 EUR | Total employee load |
| = 931,18 EUR | Net salary |
| 227,04 EUR | Employer social security contributions (18,92%) |
| = 1.427,04 | Employer wage costs (total) |
| = 495,86 EUR | Total burden on employee and employer |
Requirements
- Legal Age
- Capacity to Contract
Process
1. Meeting for mutual acquaintance
2. Issuance of the order and payment through our website
3. Submission of proof of identity and proof of residence
4. Submission of the powers of attorney prepared by us and signed by you
5. Company formation by proxy (reservation of the company name, drafting of the articles of association, notary appointment, registration in the commercial register)
6. Application for tax numbers
7. Registration as an employer for social security
8. Preparation of the managing director contract
9. Submission to the register of beneficial owners
10. Opening of a bank account with a Bulgarian bank (requires personal presence)
Company Formation in Bulgaria: Service Overview
- Reservation of the company name
- Registered address (12 months)
- Registered agent (12 months)
- Creation of the articles of association
- Preparation of all powers of attorney
- Registration in the commercial register
- Creation of a valid managing director contract
- Registration for social security as an employer
- Entry in the register of beneficial owners
- Valuable information about the OOD/EOOD and the topic of taxes
Support by a licensed tax advisor in Bulgaria
Once your OOD/EOOD is registered in the commercial register, it acquires rights and obligations, including those towards the tax authorities. To ensure that you don’t miss any deadlines and everything is in order, you will be supported by an experienced, licensed tax advisor in Bulgaria. We would be happy to provide you with a personalized offer.
To give you a rough idea of what exactly needs to be done and what costs you can expect, the following table serves as an illustration and is not intended as a specific offer, but rather reflects an average mandate.
Emigrate to Bulgaria
If you want to emigrate to Bulgaria, there are several things to consider: After all, you don’t want to waste time, money, or energy on experiments and aim to reach your goal as quickly as possible: starting a new chapter in your life and peacefully focusing on your business activities.
Target Audience
Who emigrates to Bulgaria? Generally, our clients are people who cite various reasons for their emigration to Bulgaria:
- Charm of Eastern Europe
- Geographical location
- New beginning abroad
- Romantic reasons
- Frustration in their home country
- Low cost of living
- Extremely low taxes
Advantages
- Low food prices
- Low energy costs
- Low property prices (rent/purchase)
- Very low taxes
- Favorable geographical location
- Good flight connections
- Simple emigration due to freedom of establishment for EU citizens
- Efficient travel through Schengen Area membership (March 2024)
Taxes and levies for individuals in Bulgaria:
| Type of tax or levy | Tax rate / tax burden | Basis |
| Income tax * | 10% | Earned income (self-employed and non-self-employed work) |
| Social security contributions * | 32,7 - 33,4% | Earned income (self-employed and non-self-employed work) |
| Value added tax (regular) | 20% | Consumption (all consumption other than discounted and heavily discounted goods and services) |
| Value added tax (reduced) | 9% | Consumption (pharmaceuticals, medical devices, books, newspapers, magazines, cultural events, hotel services) |
Establishing residence in Bulgaria
To ensure you comply with the local registration regulations, settle in Bulgaria quickly, and avoid costly mistakes, let us assist you with establishing residence in Bulgaria.
This will help you avoid expensive errors, wasted time, and unpleasant experiences. We are well-versed in Bulgaria, particularly in Sofia, Plovdiv, Varna, and Burgas, and we will make sure you benefit from our insider knowledge.
Real estate market in Bulgaria
The real estate market in Bulgaria varies from place to place. Property prices in rural areas are naturally lower than in cities. There are also significant differences from city to city.
The most expensive city is undoubtedly the capital, Sofia. However, even in Sofia, property prices are relatively moderate compared to major German cities.
To help you quickly get an overview of current prices and locations, we recommend using our relocation service and benefiting from our network of real estate agents.
Employment contract in Bulgaria
As part of the company formation in Bulgaria, we also create a valid, bilingual employment contract that complies with legal requirements. Bulgaria has a working hours law, meaning that only one full-time job per person is allowed. However, exceptions apply for executive mandates.
Requirements
There are two groups of people when it comes to immigration to Bulgaria: EU citizens, who enjoy the freedom of establishment, and citizens from third countries. The procedure for EU citizens is relatively simple, while the process for third-country nationals is much more complex.
If you do not hold EU citizenship, please contact us so that we can discuss your individual options with you. For citizens of the European Union, the following applies:
- Valid rental contract
- Valid employment contract
- Correct application submission
- Appointment with the immigration authority
•• Personal attendance at the appointment with the immigration authority.
Process
Once you have entrusted us with assisting you professionally in relocating or immigrating to Bulgaria, one of our qualified staff members will contact you.
In the next step, we will request some documents from you. Afterward, we will prepare the necessary, personalized powers of attorney for you, which you will need to sign and have notarized before returning them to us.
We will submit the documents in the correct format to the immigration authority and arrange the relevant appointments. We will then coordinate with you regarding the necessary visits to the authorities.
At each appointment, one of our staff members will be present to accompany you, assist with communication issues through valuable translation work, and ensure that the process moves forward smoothly.
Typically, you will receive your Certificate of Residence (Lichna Karta) within a few days.
Residence in Bulgaria: Service Overview
- Access to our real estate agent network in Sofia
- Arrangement of all administrative appointments
- Police registration
- Application for personal tax number
- Application for personal social security number
- Certificate of Residence
- Personal accompaniment by our staff member
- Valuable information on country-specific peculiarities and recommendations
Hundreds of clients rated us with "Excellent"
How we can assist you
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