Bulgaria

Bulgaria doesn’t do special regimes, refunds or complicated elections. It doesn’t need to. The normal system is already low: 10% corporate tax, 10% personal income tax and 5% on dividends. For an EU member state, that is about as cheap as the standard system gets.

Bulgaria has also moved closer to the European core. It became a full Schengen member on 1 January 2025 and adopted the euro on 1 January 2026. Add low living costs, Black Sea beaches and ski resorts, and you see why it keeps appearing on shortlists next to Romania and Cyprus.

The flip side: substance matters, banks are cautious with foreign-owned companies, and a lot of the paperwork is in Bulgarian. Here is how it works as of 2026.

How the Bulgarian tax system works

Corporate tax: 10% flat

Bulgarian companies pay 10% on their taxable profit. There are no tiers, no surcharges and no local business taxes on top. Losses can be carried forward for five years.

When profits are distributed:

• Bulgarian-resident individuals pay a final 5% tax on dividends.
• Non-resident individuals are subject to 5% withholding tax, unless a tax treaty reduces it.
• Companies resident in the EU/EEA generally receive dividends free of Bulgarian withholding tax.

So a Bulgarian resident who owns a Bulgarian company and pays out all profits ends up at about 14.5% combined (10% corporate tax, then 5% on the remaining 90%). That is one of the lowest combined rates in the EU for owner-managed companies.

Worked example: €100,000 profit, paid out to a Bulgarian-resident owner

Personal income tax: 10% flat

Bulgarian residents pay 10% on most income, including employment and self-employment income. You are tax resident if you spend more than 183 days in Bulgaria in any 12-month period, or if your centre of vital interests is there. Residents are taxed on their worldwide income.

Social security contributions apply to salaries and self-employment income, but only up to a maximum insurable income. For higher earners, that cap keeps the total burden low.

Setting up a company in Bulgaria

The standard vehicles:

• EOOD – single-member limited liability company.
• OOD – limited liability company with two or more shareholders.

Both have a symbolic minimum share capital. Registration happens at the Commercial Register of the Registry Agency.

What to expect:

• Timeline. Usually one to two weeks once documents are ready, including opening the capital account and registration.
• Remote setup. Possible through a power of attorney, but documents must be notarized and apostilled, and many banks want to see the owner in person.
• Costs. Formation through a local provider typically ranges from a few hundred to about a thousand euros for a simple company. Monthly accounting is inexpensive by EU standards.
• VAT. Registration is mandatory above the annual turnover threshold, and required for certain cross-border services from the start.

Substance

A Bulgarian company managed from Germany, Austria or elsewhere may be considered tax resident there, which cancels out the 10%. The cleanest setup is a Bulgarian company run by someone who lives in Bulgaria – often the founder. For the bigger picture, see how to legitimize your presence in a low-tax country.

Residency options

EU, EEA and Swiss citizens

EU citizens can move freely. For stays of more than three months, you register with the migration authorities and receive a long-term residence certificate. You need proof of address, health insurance and either work, self-employment or sufficient funds.

Non-EU nationals

Non-EU nationals generally need a long-stay type D visa, followed by a residence permit. Routes include employment, running a business that creates local jobs, and qualifying investments. The conditions are set in the Law on Foreigners and change from time to time – check the current requirements with a local lawyer before you plan around a specific route.

Banking

This is the part that needs patience. Bulgarian banks are part of the eurozone system since 2026, with online banking and SEPA payments. But they are careful with companies owned by foreigners, especially non-residents without a local presence. Expect questions about your business model, clients, source of funds and why the company is in Bulgaria.

A local address, a Bulgarian resident director or owner, and a clear business plan make a big difference. Some founders start with an EU e-money institution and add a Bulgarian bank once the company has a track record.

Living in Bulgaria

The good

• Cost of living. Among the lowest in the EU – rent, food and services are a fraction of Western European prices.
• EU, Schengen and euro. Full market access, passport-free travel and no currency risk.
• Nature. Black Sea beaches in summer, ski resorts such as Bansko and Borovets in winter, mountains in between.
• Tech scene. Sofia and Plovdiv have growing IT and outsourcing sectors.
• Internet. Fast and cheap.

The less good

• Language. Bulgarian uses the Cyrillic alphabet. English is common among younger people and in business, less so in public offices.
• Bureaucracy. Processes are improving, but paperwork, notarizations and in-person visits are still common.
• Infrastructure. Roads and public services outside the big cities vary.
• Air quality. Sofia has winter smog.
• Healthcare. Private clinics are good in the cities; public healthcare is uneven.

Key considerations

• Real presence. The 10% rates only help if Bulgaria is where you or your management actually are.
• Your old country. Exit taxes, extended tax liability and CFC rules in your former home country can reduce the benefit.
• Dividends vs salary. With capped social contributions and 5% on dividends, many owner-managers mix a modest salary with dividends. Run both options.
• Political changes. Bulgaria has had frequent elections. Tax rates have stayed stable so far, but proposals to raise them come up.
• Reputation. Bulgaria has been working on its anti-money-laundering framework. For the bigger picture on lists, see grey lists and blacklists.

Bulgaria vs its neighbours

Bulgaria is usually compared with two other low-tax EU options:

• Romania has a micro-company regime of 1% on turnover for small companies, but a 16% standard corporate tax and 16% dividend tax since 2026. Bulgaria’s 10% + 5% is simpler and, above the micro limits, usually cheaper.
• Cyprus charges 15% corporate tax since 2026 but offers the non-dom regime, under which qualifying individuals pay no special defence contribution on dividends. Cyprus has English-language business life; Bulgaria has lower rates and Schengen.

If your business is simple and you’re happy to live in Bulgaria, the numbers are hard to beat. If you need English-speaking administration or a special regime for foreign investment income, Cyprus or Malta may fit better. Put them side by side in the country comparison.

Who Bulgaria suits – and who it doesn’t

Bulgaria works well for

• EU entrepreneurs who move to Bulgaria and want low, simple taxes inside the EU.
• Owner-managed service businesses such as software, consulting and e-commerce.
• People on a budget who want an EU base with a low cost of living.
• Remote founders who want an EU company with a clean tax story – as long as they live there.

Bulgaria is probably not for you if

• You want to stay resident in a high-tax country. Management and CFC rules will likely undo the benefit.
• You need English-only administration. Malta or Cyprus are easier.
• You want zero tax on retained profits. Look at Estonia or Georgia.
• You need fast, no-questions banking. It won’t happen here – or anywhere reputable.

Run your own numbers in the tax calculator.

Rates and rules in this guide were checked in September 2026. This is general information, not tax or legal advice – get your specific setup reviewed by a qualified advisor before you act.

Sources

• National Revenue Agency (NRA)
• Registry Agency – Commercial Register
• Council of the EU – Bulgaria ready to use the euro from 1 January 2026
• European Commission – Schengen area
• PwC Worldwide Tax Summaries – Bulgaria