Bulgaria EOOD

Bulgaria does not usually appear on the first page of anyone's "best jurisdiction" list, which is part of what makes it interesting. It is a full EU member state, a Schengen member since January 2025, and adopted the euro on January 1, 2026. Its corporate income tax rate is 10%, with a 5% dividend withholding tax on the post-CIT distribution. That produces a 14.5% combined effective rate when the full after-tax profit is distributed — a low EU result, but not a universal “lowest-rate” answer once each jurisdiction’s rules and the shareholder’s facts are considered.

The EOOD (Едноличното Дружество с Ограничена Отговорност) is Bulgaria's single-owner limited liability company. One shareholder, limited liability, minimum capital of roughly EUR 1, and full foreign ownership with no residency requirement. For solo founders, freelancers, and small agency owners who want a clean EU structure without Malta's complexity or Estonia's e-Residency overhead, the EOOD is a serious option that deserves more attention than it gets.

Corporate income tax (CIT): 10% flat on taxable profits, calculated on worldwide income for Bulgarian-resident companies. Bulgaria follows the accounting profit as the starting point, adjusted for specific tax items. The rate has been 10% since 2007 and has not changed. No minimum tax, no surtaxes, no local corporate levies.

Dividend tax: 5% withheld at the company level when distributing profits to shareholders. Non-resident shareholders are subject to the same 5% rate, though double tax treaties may reduce this further — Bulgaria has over 70 treaties.

VAT: Standard rate 20% from January 2025 (the 9% reduced rates for restaurants and tourism expired). Mandatory registration when annual turnover from Bulgarian-source supplies exceeds EUR 51,130 in a calendar year. Importantly, B2B cross-border services provided to EU business clients are reverse-charged under Article 44 of the EU VAT Directive — they do not count toward the VAT threshold and you do not charge Bulgarian VAT on them. This means a consultant billing entirely to EU business clients may never trigger Bulgarian VAT registration regardless of revenue. For SaaS and digital services to EU consumers (B2C), the OSS (One Stop Shop) regime applies separately.

Social security for the director: This is the item most guides bury or skip entirely, and it matters. If the EOOD's managing director registers as self-insured (самоосигуряващо се лице — SOL), which is effectively required if the director is also the business owner actively working in the company, Bulgarian social and health insurance contributions apply. The minimum monthly insurable base is approximately EUR 550, and contributions run around 27-32% of that base depending on insurance classes selected, adding roughly EUR 150-180 per month at minimum. The maximum insurable base is approximately EUR 2,100/month, capping the maximum contribution. This is a material ongoing cost that is frequently underestimated by non-resident founders who form an EOOD remotely and then don't address the director's insurance status properly. Get local accounting advice on this before you begin paying yourself anything.

Annual compliance calendar:

• Monthly bookkeeping and VAT declarations (if VAT registered)
• Monthly payroll and social security declarations (if director is on payroll or SOL)
• Annual CIT return: filed by June 30 of the following year
• Annual financial statements: filed with the Commercial Register by June 30
• Annual statistics report: filed with the National Statistics Institute
• Advance CIT payments: required quarterly once the prior year tax exceeds EUR 3,000
• UBO declaration: maintained and updated in the Commercial Register

A local accountant is not optional — it is a practical and in most cases legal necessity. Bulgarian bookkeeping must be maintained in Bulgarian, filings go through the National Revenue Agency (NRA) portal, and the accountant signs off on financial statements. Budget EUR 100-250 per month for a basic active trading EOOD, which is significantly cheaper than comparable compliance costs in Western Europe or Malta.

Bulgaria's banking situation improved materially with eurozone entry in January 2026. EUR is now the native currency, SEPA transfers work without any conversion, and the practical gap between a Bulgarian corporate account and a Wise or Revolut EUR account shrank further.

For local traditional banking, UniCredit Bulbank and DSK Bank are the most internationally accessible and have English-speaking corporate teams. Opening a corporate account generally requires the director to appear in person — this is the most common practical blocker for non-residents forming an EOOD remotely. Some banks accept a notarized Power of Attorney for the capital deposit account (needed during formation), but converting that to a full operating account usually still requires a visit. Non-EU founders in particular should plan for an in-person banking trip at some point, or structure around fintechs from the start.

Fintech alternatives work well and have become the standard operating setup for remote EOOD owners:

• Wise Business — accepts Bulgarian Ltd companies, EUR IBAN, multi-currency, integrates with Stripe; the de facto primary account for most non-resident EOOD operators
• Revolut Business — fast onboarding for EU-registered companies, strong cards and FX; availability varies by founder country and business type
• Paysera Business — Lithuanian-based, EU-regulated, widely used by Eastern European businesses, often easier to open than Revolut for certain jurisdictions

Stripe works natively with Bulgarian EOOD entities. PayPal, Paddle, Lemon Squeezy, and Adyen are all supported. This is one of Bulgaria's practical advantages over Paraguay or Georgia — payment processor access is clean and standard EU.

The tax math is the starting point. Bulgaria levies a flat 10% corporate income tax on taxable profits. When the remaining 90% is distributed as dividends, a 5% withholding tax applies to that distribution. The combined effective tax is therefore 14.5% on fully distributed pre-tax profit, not 15%. On retained earnings — profits left inside the company — only the 10% CIT applies, and nothing more until distribution. For founders who reinvest into the business, Bulgaria gets increasingly efficient.

Compare that to the UK, where a small company now pays 19-25% corporation tax before any dividend extraction. Or Germany at roughly 30% corporate level. Or France. Bulgaria's 14.5% combined effective rate is not a loophole — it is the straightforward result of its 10% corporate tax and 5% tax on the post-CIT dividend distribution.

For EU-resident founders specifically, Bulgaria is one of the cleaner paths because it avoids the refund-cycle complexity of Malta while delivering a lower headline number than any Western European jurisdiction. The catch is that it requires genuine tax residency in Bulgaria to fully capture the benefit at the personal level — the company pays 10% regardless of where the owner lives, but the 5% dividend tax is what your home country's rules interact with. Founders in zero-tax personal residencies (UAE, Cayman, Paraguay) keep all of that; founders in high-tax countries need to check their CFC rules first.

Bulgaria joined the Schengen area in January 2025 and adopted the euro on January 1, 2026. These are not small details for practical business operations. Schengen membership means no border checks within the EU and easier hiring and movement. Eurozone membership means SEPA payments in EUR natively, no currency conversion between a Bulgarian company account and European clients, and the BGN/EUR fixed peg (1.95583) is now history — it is just EUR. Stripe, PayPal, Wise Business, and Revolut Business all work with Bulgarian EOOD entities without issues.

1. Engage a Bulgarian formation agent or law firm. All-in formation packages typically cost EUR 600-1,000 and cover document preparation, registered address, capital deposit coordination, and Commercial Register filing. Providers like BG Company, Bulgarian.LLC, and Innovires handle remote formation regularly.
2. Choose a company name. The name must be unique in the Bulgarian Commercial Register. It can be in any language but must have a Bulgarian-script transliteration. The agent checks availability before filing.
3. Sign the Founding Act and related documents. The sole shareholder signs the Founding Act (Учредителен Акт), director appointment, and specimen signature form. Outside the EU, these must be apostilled. EU citizens can typically have them notarized locally without apostille. Documents are prepared in Bulgarian; translations provided by the agent.
4. Deposit share capital. A capital deposit (escrow) account is opened at a Bulgarian bank — typically handled by the formation agent. Deposit the minimum (EUR 1 is legally sufficient; EUR 100-500 is practically smoother for banking purposes). Obtain the bank confirmation certificate.
5. File with the Bulgarian Commercial Register. Submission is electronic. Standard processing takes 1-3 business days once documents are complete. The Certificate of Registration and BULSTAT number are issued digitally.
6. Register with the National Revenue Agency (NRA). Tax registration must be completed within 7 days of Commercial Register entry. The agent handles this.
7. Register the director as self-insured (SOL) with the NRA if the director will actively manage the company and draw income. This triggers the monthly social contribution obligation.
8. Open an operating bank or fintech account. Apply with the incorporation certificate, BULSTAT registration, and KYC documents. Wise Business or Revolut Business can be opened remotely; traditional Bulgarian bank accounts typically require in-person attendance.
9. Appoint a local accountant. Monthly bookkeeping begins from the first operating month. The accountant handles NRA filings, VAT (if applicable), payroll, and annual statements.

Total timeline from engagement to operational company: 1-2 weeks for registration, typically 1-3 weeks for fintech account depending on the provider.