Since 1 January 2026, Bulgaria has paid in euros – and remains one of the most cost-effective tax locations in the EU. The corporate tax rate of 10% applies without any brackets, dividends are taxed at 5%, and a limited liability company can be formed with just €1 of share capital. Bulgaria joined the eurozone on 1 January 2026; anyone choosing Bulgaria for company formation therefore plans capital, accounts and financial statements in euros from the outset.
10% tax, 5% on dividends
Bulgaria taxes corporate profits at a uniform rate of 10%, without progression and without local surcharges. If profits are distributed to an individual, 5% dividend tax is added; if dividends go to a company based in the EU or EEA, no tax on dividends is due. Personal income tax is also a flat 10%.
Out of €100 of profit, €85.50 therefore reaches the shareholder after corporate tax and distribution – a total burden of 14.5% that hardly any other EU location can match. All tax matters are handled by the National Revenue Agency (NRA).
The legal forms compared
For founders from abroad, the EOOD is almost always the right choice: a limited liability company with a single shareholder. If several people form a company together, it becomes an OOD. For larger ventures there is the joint-stock company (AD, or EAD with a single shareholder). All three are limited companies; alongside them stands the sole trader (ET). All forms compared side by side:
| RecommendedEOOD | OOD | AD / EAD | ET | |
|---|---|---|---|---|
| Type | Limited company | Limited company | Limited company | Sole trader |
| Comparable to | Single-member LLC | Multi-member LLC | Joint-stock company | Registered sole trader |
| Shareholders | One person | Two or more | One or more | One person |
| Minimum capital | €1 | €1 | €25,000 | None |
| Liability | Limited | Limited | Limited | Personal |
| Formation from abroad | Yes | Yes | Yes | Only with permanent residence in Bulgaria |
| Tax on profit | 10% | 10% | 10% | 15% income tax |
| Tax on distributions | 5% | 5% | 5% | Not applicable |
| Ideal for | Solo founders, consultants, online businesses | Partnerships, family businesses | Larger ventures, investors | Self-employed residents of Bulgaria |
The key difference lies in liability: with an EOOD, OOD or AD only the company’s assets are at risk, whereas a sole trader is personally liable. In addition, sole traders are taxed at their own rate of 15% on profit, and foreigners need permanent residence in Bulgaria to register one. For founders from abroad, the EOOD is therefore the standard.
Euro since 2026
On joining the eurozone on 1 January 2026, Bulgaria replaced the lev at the fixed rate of 1.95583 lev per euro. New companies have stated their capital in euros ever since, and invoices, tax payments and financial statements are in euros. For businesses from the eurozone, any currency risk disappears.
Little substance required
Bulgaria itself requires little substance from a company – essentially a registered office in the country and proper bookkeeping. A managing director resident in Bulgaria is not required, €1 of share capital is enough, and a business address in the country serves as the registered office. This makes it easy to set up a lean EOOD and run it from abroad.
Anyone who wants to set up a company in Bulgaria and grow later on will find ideal conditions: the minimum wage in 2026 is €620 per month, qualified professionals are available, and offices are inexpensive by EU standards. For companies building a team in the EU, Bulgaria is one of the most attractive locations.
The formation process
Company formation in Bulgaria follows a clear process:
- Draw up the founding document: for an EOOD the sole shareholder’s deed of incorporation, for an OOD the articles of association.
- Notarise the manager’s consent: the managing director’s declaration is notarised.
- Pay in the share capital: at least €1 into a capital account with a Bulgarian bank.
- Register in the commercial register: the application goes to the Registry Agency, and the company receives its identification number (EIK).
- Tax registration: registration with the tax authority and, if required, for VAT.
With complete documents, registration is usually completed within a few business days; the company can then act immediately.
Accounting and obligations
The key obligations for bookkeeping, accounts, audit and VAT at a glance – so you know from the start what running your company involves.
| Obligation | Rule |
|---|---|
| Bookkeeping | Double-entry bookkeeping under Bulgarian standards |
| Annual accounts | Annually, published in the commercial register by 30 September |
| Statutory audit | From 2 of 3: total assets BGN 4m (approx. €2.05m), revenue BGN 8m (approx. €4.09m), 50 staff |
| Tax return | Annual corporate tax return by 30 June |
| VAT: registration | From €51,130 annual turnover, voluntary below; rate 20% |
| VAT: returns | Monthly by the 14th of the following month |
| Ongoing register duties | Report changes to the commercial register; keep beneficial owners current |
As of 2026. Bookkeeping and filings are usually handled by specialised accountants in the target country.
Is a Bulgarian company right for you?
Whether a Bulgarian company is right for you depends above all on whether profits are distributed and how the business is meant to grow:
Suitable for
- Service providers with clients across the EU
- Founders who distribute profits regularly
- Companies building a team in the EU
- Solo founders with little start-up capital
Less suitable for
- Groups with complex holding structures
- Business models focused on Asian markets
- Founders expecting an English-speaking administration
- Projects deliberately seeking a non-EU company
With 9% corporate tax, Hungary is an obvious alternative in the EU; if you prefer to keep profits in the company, compare Estonia, and for very small businesses Romania offers a special regime for micro-enterprises. All options are listed in the overview of all locations, and the tax comparison shows the rates side by side. Which structure fits in an individual case can be clarified in an initial consultation.
