Doing Business in Bulgaria: A 2026 Guide for Foreign Founders

Doing business in Bulgaria appeals to foreign founders for a few concrete reasons: a flat 10% corporate tax, 5% dividend tax, EU and Schengen membership, the euro since 1 January 2026, and company formation that does not require residency. This guide covers what you need to know before you start and how running a Bulgarian company works in practice — legal forms, taxes, VAT, banking, bookkeeping, hiring and the real costs of year one.

Why foreign founders do business in Bulgaria

• Low, simple taxes — 10% corporate income tax on profit and 5% withholding on dividends to individuals in the standard case
• EU single market — a Bulgarian company invoices EU clients like any other EU business, with a VAT number listed in VIES
• Euro and Schengen — Bulgaria adopted the euro on 1 January 2026 and has been a full Schengen member since 2025
• Low entry cost — €1 minimum share capital and fast registration, in person or remotely
• No residency requirement — EU and non-EU citizens can own and manage the company from abroad

How this compares with other popular EU bases is covered in Bulgarian business advantages in the EU and Bulgaria vs Estonia.

Business structures available to foreigners

Most foreign owners use a limited liability company: an EOOD with one shareholder or an OOD with two or more (EOOD vs OOD). Larger or regulated businesses may need a joint-stock company (AD), and an existing foreign company can register a branch instead of a new entity. A sole trader (ET) has unlimited personal liability and rarely suits foreign founders — compare the options in sole trader vs EOOD in Bulgaria. We form new EOOD/OOD companies only — see why we avoid shelf companies.

The practical setup steps are in how to open a company in Bulgaria, and the foreigner-specific documents in register a company in Bulgaria.

Taxes for a Bulgarian company

Profit distributed to an individual shareholder carries a combined burden of 14.5% (10% corporate tax, then 5% on the remaining 90%). Your personal tax at home depends on where you are resident. Full detail: corporate tax in Bulgaria.

VAT and selling to EU clients

Mandatory VAT registration applies above €51,130 of taxable turnover in a calendar year, with the application due within 7 days of crossing it. Companies that sell services to businesses in other EU countries usually need a VAT number earlier — often before the first invoice — so the client can verify it in VIES and the supply can be invoiced at 0% under the reverse-charge rules. See VAT registration in Bulgaria.

A foreign company that only needs a Bulgarian VAT number, without a local entity, may need fiscal representation in Bulgaria instead.

Banking and getting paid

Banks and payment providers open accounts after KYC on the owners, the business model and the source of funds. A newly formed company with a clear activity, a real registered address and a working website passes this far more easily than a company with a vague profile. Practical guidance: business bank account in Bulgaria.

Bookkeeping and annual compliance

Every active company keeps double-entry books from its first invoice, files an annual corporate tax return (generally by 30 June of the following year) and files annual financial statements with the Commercial Register — also in years with no activity. VAT-registered companies file periodic VAT returns. Foreign owners send documents digitally to a Bulgarian accountant: bookkeeping in Bulgaria.

Official letters from the tax office and courts go to the company’s registered office address, so that address needs reliable mail handling.

Hiring and paying yourself

A company can pay its owner through a salary, through dividends, or both. Salaries paid in Bulgaria carry 10% personal income tax plus social security contributions, and require payroll filings. Dividends are paid from after-tax profit with 5% withholding in the standard case. Which mix is best depends on where you live and pay tax — agree it with your accountant before the first payment.

What year one costs

• Formation — €1,700 in person or €2,000 remote with us (company formation packages)
• Registered address — €600 per year after the setup period
• VAT registration — €200 if not handled at setup
• Bookkeeping — monthly or annual, depending on volume; not included in formation
• Apostille, translations, good standing — only when a bank or partner asks (additional services)

The complete setup breakdown is in how much it costs to open a company in Bulgaria.

Who doing business in Bulgaria suits

• Consultants, agencies and freelancers invoicing EU clients — digital nomad company
• Software and SaaS founders — IT company in Bulgaria
• UK and US owners who need an EU base — from the UK, from the USA
• Groups adding an EU holding or subsidiary — holding company in Bulgaria

Common questions

Is Bulgaria a good place to do business?

For many foreign founders, yes: 10% corporate tax, 5% dividend tax, EU and Schengen membership, the euro since 2026 and low setup costs. Whether it suits you depends on where you live and where your clients are.

Can foreigners do business in Bulgaria?

Yes. EU and non-EU citizens can own 100% of a Bulgarian EOOD or OOD and manage it remotely. Residency is not required for company ownership.

What taxes does a Bulgarian company pay?

10% corporate income tax on profit, 5% withholding on dividends to individuals in the standard case, and 20% VAT on most supplies once VAT-registered.

Does a Bulgarian company need an accountant?

In practice, yes. The company must keep books from the first invoice and file an annual tax return and financial statements, even in a year with no activity.

Do I need a Bulgarian bank account?

You need a business account that accepts the company; most founders open one in Bulgaria or with an EU payment provider after KYC.