Bulgaria Company Formation and Taxation – Frequently Asked Questions
Bulgaria has become a prime destination for entrepreneurs and investors looking to form a company in the European Union while benefiting from one of the lowest corporate tax rates in Europe. With a flat 10% corporate income tax, low operating costs, and access to the EU single market, Bulgaria offers a strategic and cost-effective base for international business operations. This Frequently Asked Questions (FAQ) page is designed to provide clear answers to the most common inquiries about forming a company in Bulgaria.
Whether you’re launching a startup, relocating a digital business, or establishing a European subsidiary, Bulgaria provides a straightforward company formation process and a business-friendly regulatory environment. Foreign investors are allowed 100% ownership, and incorporation can be completed quickly—often within just a few business days. The most common business structure is the Limited Liability Company (OOD or EOOD), which offers limited liability protection and operational flexibility.
To help you better understand the process, this FAQ covers essential topics such as required documentation, minimum capital, registration steps, bank account setup, accounting obligations, and tax compliance. It also addresses important considerations for foreign nationals, including whether a local director is required and how to manage a company remotely.
Bulgaria is especially appealing for IT services, e-commerce, consulting, and trading companies that seek low tax burdens within an EU jurisdiction. With a growing infrastructure, skilled workforce, and competitive labor market, Bulgaria continues to attract global entrepreneurs.
Use this FAQ as a practical guide to navigate Bulgaria’s incorporation requirements and ensure you’re fully prepared to start your company smoothly and legally. Explore the most relevant questions and answers below to gain valuable insights into the Bulgaria company formation process.
Frequently Asked Questions About Bulgaria Company Setup
This FAQ guide offers key insights into Bulgaria company formation for entrepreneurs, startups, and international businesses looking to establish a presence in the European Union. It answers the most common questions about forming a limited liability company (OOD or EOOD), foreign ownership rules, required documents, tax benefits, and registration timelines. Bulgaria is known for its low 10% corporate tax rate, affordable business setup costs, and access to EU markets. Whether you’re opening a consulting firm, tech startup, or e-commerce business, this resource helps you navigate the legal and administrative process of company registration in Bulgaria with confidence.
📌 Company Formation in Bulgaria – FAQ
1. What types of companies can I establish in Bulgaria?
In Bulgaria, you can set up a Limited Liability Company (LLC/OOD/EOOD), Joint-Stock Company (AD), or a branch/representative office of a foreign company. Each entity type has different requirements and benefits for foreign investors. For full guidance, see our main Bulgaria company formation page.
2. Can foreign nationals own 100% of a Bulgarian company?
Yes. Foreign investors can hold full ownership in Bulgarian companies without restrictions for most industries, making Bulgaria an attractive destination for international business.
3. What is the minimum share capital required?
For an OOD/EOOD, the minimum capital is very low — as little as 2 BGN (~€1). For a Joint-Stock Company (AD), the minimum share capital is 50,000 BGN (~€25,500).
4. How long does company registration take in Bulgaria?
Registration is typically completed within 5–10 business days if documents are correctly prepared. Using a professional service can speed up the process.
5. Do I need a local director or shareholder?
No. Bulgaria does not require directors or shareholders to be residents, which facilitates easy foreign ownership and offshore setups.
6. Is a registered office required?
Yes, all Bulgarian companies must have a local registered address, which can be provided by a corporate service provider.
7. Do I need to open a bank account in Bulgaria?
Yes. A corporate bank account is mandatory for depositing share capital and conducting business operations. Many foreign investors can set this up via a power of attorney.
8. Are there any restrictions on business activities?
Most activities are unrestricted for foreign investors, though regulated industries (finance, legal services, healthcare) may require specific licenses.
9. What are the ongoing compliance requirements?
Bulgarian companies must maintain accounting records, submit annual financial statements, file corporate taxes, and comply with local laws. Professional guidance ensures compliance with all regulations.
10. Can I set up a company remotely?
Yes. Many service providers offer remote company formation, allowing foreigners to establish a business without physically visiting Bulgaria. For full details, see Bulgaria company formation services.
11. How is a branch office different from a Bulgarian company?
A branch office is not a separate legal entity; it operates under the foreign parent’s legal framework and requires local registration, while a full Bulgarian company is fully independent.
12. What documents are required for company formation?
Key documents include:
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Passport copies of shareholders/directors
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Articles of Association
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Proof of registered office
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Bank confirmation of share capital deposit
13. Is Bulgaria a favorable jurisdiction for international business?
Yes. Bulgaria offers low corporate tax (10%), minimal share capital requirements, and full foreign ownership, making it highly attractive for offshore and international investors.
💰 Bulgaria Taxation – Frequently Asked Questions
1. What is the corporate income tax rate in Bulgaria?
Bulgaria imposes a flat 10% corporate income tax on resident companies and their worldwide income, one of the lowest in the EU.
2. What is the standard VAT rate?
The standard VAT rate is 20%, with a lower 9% rate for certain services (e.g., hotels). VAT registration is mandatory once annual turnover exceeds 50,000 BGN.
3. Are there dividend taxes for foreign shareholders?
Yes. Dividends to non-resident shareholders are subject to a 5% withholding tax, though exemptions apply for EU parent companies under treaties.
4. How are corporate losses treated?
Tax losses can be carried forward for five years, but cannot be carried back. This allows businesses to offset profits in future years.
5. What are social security obligations for employers?
Bulgarian employers must contribute around 18–20% of gross salary for social security. Employees contribute additional amounts for pensions and healthcare.
6. What are the key tax filing deadlines?
Corporate tax returns are generally due by June 30 of the year following the accounting period. Advance payments may apply depending on the business.
7. Does Bulgaria follow EU accounting standards?
Bulgarian companies report under local accounting standards and can optionally adopt IFRS (International Financial Reporting Standards) for international reporting.
8. Are there tax incentives for foreign investors?
Yes. Bulgaria offers incentives for R&D, investments in high-unemployment regions, and certain strategic sectors, reducing effective tax burden for international companies.
9. How does Bulgaria handle double taxation?
Bulgaria has double taxation treaties with over 70 countries, ensuring foreign investors avoid being taxed twice on the same income.
10. What penalties exist for non-compliance?
Non-compliance with tax and accounting obligations may result in fines, interest, or business restrictions. Professional assistance is recommended to avoid penalties.
11. Are there special taxes for branches of foreign companies?
Branches pay corporate tax on Bulgarian-source income and must comply with local accounting and VAT requirements, but are not taxed on foreign parent income.
12. Will Bulgaria adopting the Euro affect taxation?
Bulgaria plans to adopt the Euro in 2024–2026, which may simplify cross-border transactions. Tax rules will largely remain the same.
13. Is Bulgaria suitable for digital and e-commerce businesses?
Yes. With low corporate tax, EU VAT compliance, and digital-friendly policies, Bulgaria is ideal for international digital and e-commerce operations. For formation guidance, see Bulgaria company formation services.
Interested in setting up an offshore company in Bulgaria?
Visit our Bulgaria Company Formation page for detailed guidance, packages, and expert support tailored to your needs.
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