Company Formation in Bulgaria: Costs, Requirements, and Benefits
Why Start a Company in Bulgaria: Key Advantages in 2025
Bulgaria has firmly established itself among the most attractive destinations for company formation in Europe. It combines a rich historical background with a dynamic modern business environment, making it an excellent choice for international entrepreneurs. Since becoming a full member of the European Union in 2007, Bulgaria has gained access to a single market of over 450 million consumers, opened broad opportunities for trade and investment, and has been actively adopting EU-wide standards in regulation and transparency.
This is due to several key advantages:
- Favorable Tax Environment
- A flat corporate tax rate of just 10%, one of the lowest in the EU
- No inheritance tax and preferential treatment for certain types of capital
- EU Membership
- Full access to the markets of 27 EU countries with no customs barriers
- Business operations are conducted under transparent EU regulations
- Over 70 double taxation treaties, a critical benefit for international activities
- Low Operational Costs
- The minimum share capital required for an LLC (OOD/EOOD) is just 2 BGN (~€1)
- Accounting and administration services are affordable
- Easy Company Registration
- The process is typically completed within 10 working days
- Remote company registration is allowed, meaning there’s no need to visit Bulgaria in person
Note: The Bulgarian lev (BGN) is pegged to the euro at a fixed rate of 1 EUR = 1.95583 BGN, and Bulgaria plans to adopt the euro on January 1, 2026.
Thanks to its favorable tax system, growing infrastructure, and strong talent pool, Bulgaria is particularly attractive for the following sectors:
- IT and Tech Startups: Sofia has earned the nickname “Silicon Valley of Eastern Europe”
- E‑commerce and Digital Outsourcing: Low staffing and office costs, a skilled English-speaking workforce, and fast access to EU and global markets
- Fintech and Financial Services: A stable banking system, strong support for digital payments, and participation in EU fintech initiatives
- Consulting and Professional Services: High demand in tax, audit, and management consulting driven by competitive costs and EU market access
- Other Sectors (Logistics, Manufacturing): Bulgaria’s strategic location and infrastructure make it ideal for export-oriented production
2. Why Choose Bulgaria for Business?
Bulgaria has been a full member of the European Union since 2007, granting businesses complete freedom in trade, investment, services, and labor mobility across all 27 EU member states. This eliminates administrative and customs barriers, opening access to a massive consumer market, maintaining competitiveness, and lowering transactional costs. Moreover, as of January 1, 2026, Bulgaria will officially adopt the euro, further simplifying cross-border payments and reducing currency risks.
One of Bulgaria’s key advantages is its highly favorable business tax environment. The corporate income tax is set at only 10%, and the dividend tax is just 5%. Even with the introduction of the global 15% minimum tax for large multinational enterprises, small and medium-sized companies remain unaffected. This lightweight tax regime allows businesses to reduce financial strain and reinvest a larger portion of their profits into growth.
Administrative management of a company in Bulgaria is extremely simple and transparent. Bulgaria company formation for an LLC (OOD/EOOD) is possible with a minimum share capital of just €1, and the process typically takes 10 business days, provided it’s handled by a professional. Small and medium-sized businesses are exempt from mandatory audits if they maintain moderate turnover, and financial reporting follows unified EU formats. Starting in 2026, Bulgaria will implement the SAF-T system (Standard Audit File for Tax), a digital standard for tax reporting. This will further reduce bureaucracy and enhance transparency and compliance with international accounting norms.
The infrastructure and startup support ecosystem in Bulgaria is growing rapidly, particularly in Sofia and Plovdiv. Businesses benefit from well-developed logistics networks, business centers, coworking spaces, and tech parks. Numerous support initiatives are available, including startup visas, grants for R&D projects, and government subsidies.
Bulgaria combines a strategic geographic location with low operational costs, attractive tax policy, and a simplified administrative environment. All these factors make it an ideal destination for IT companies, e-commerce businesses, fintech startups, consulting firms, and fast-scaling ventures looking to expand across the European Union.
3. Legal Forms and Company Types
In Bulgaria, companies can be structured in several legal forms, each tailored to different business goals, ownership models, and operational scales.
The Limited Liability Company (OOD) is a classic structure suitable for businesses with multiple founders—or a single founder planning future expansion. The minimum share capital is just 2 BGN (~€1), and shareholder liability is limited to the amount of their capital contribution. Management is carried out by a general meeting of the shareholders and an appointed director.
The Single-Member Limited Liability Company (EOOD) is a similar limited liability format designed for sole ownership. It can be established by either an individual or a legal entity that seeks full control over the business while protecting personal assets. This form is especially popular among freelancers, consultants, and independent professionals involved in Bulgaria company formation.
The Joint Stock Company (AD or EAD) is more appropriate for larger, fast-growing businesses. It requires a minimum share capital of 50,000 BGN (~€25,000) and allows for share issuance, but also involves more complex regulatory requirements—such as the formation of a Board of Directors and a Supervisory Board. This structure is typically used for public operations or companies planning to attract capital through investors.
The choice of company form depends on:
- Ownership goals and structure:
Use EOOD if you want full ownership, OOD for a partnership, and AD for larger businesses needing capital investment. - Liability:
In all three forms, the liability of the owners is limited to their share capital contributions. - Administrative costs:
EOOD/OOD require minimal share capital, allow for Bulgaria company registration in about 10 days, use simple bookkeeping, and are exempt from audits for small businesses. In contrast, AD has higher thresholds for capital, structural complexity, and reporting obligations.
4. Process of Company Formation
Bulgaria company formation begins with selecting and verifying a company name. The name must be unique, include a legal suffix (e.g., “OOD”, “EOOD”), and must not duplicate existing names listed in the Bulgarian Commercial Register. Name availability is verified via the Bulgarian Registry Agency, and results are typically available within one business day.
The next step is drafting and signing the company’s Articles of Association — a key document outlining the company’s structure, objectives, governance procedures, and ownership shares. This document is formatted as a Memorandum and Incorporation Agreement. Notarization is not required for OOD and EOOD structures but may be necessary for AD entities or when foreign shareholders are involved.
Once finalized, the document package is submitted to the Commercial Register. This includes proof of paid-in share capital (minimum 2 BGN for OOD/EOOD and 50,000 BGN for AD), the application form, the Articles of Association, and information on directors and shareholders. Upon approval—which typically happens on the next business day—the company is officially registered. All corporate documents are issued in Bulgarian.
After registration, the company receives its EIK/BULSTAT, the Uniform Identification Code. This unique number is assigned automatically and is used for tax filings, statistical reporting, banking transactions, and communication with Bulgarian public institutions.
The next step is opening a corporate bank account. This is a legal requirement for confirming the deposit of share capital and for handling business transactions. In practice, most Bulgarian banks require the director’s physical presence and Bulgarian residency. The average time to open a business account is about one week.
The final step is tax registration. As of April 1, 2025, the VAT registration threshold was adjusted back to 100,000 BGN (~€51,000), following updates to Bulgaria’s national budget. Once this turnover threshold is reached, VAT registration becomes mandatory. Applications are submitted to the National Revenue Agency, and the process usually takes around two weeks. This can be done concurrently with other aspects of Bulgaria company registration.
5. Taxation in Bulgaria
The tax regime in Bulgaria in 2025 remains one of the most attractive in the European Union due to its simplicity and transparency. The corporate income tax is fixed at 10%, which is significantly lower than the EU average of approximately 21.5%.
The standard VAT rate in Bulgaria is 20%, and mandatory VAT registration is triggered once the company reaches an annual turnover of 100,000 BGN (~€51,000).
The dividend tax is just 5%, applicable to both residents and non-residents, with potential reductions available under Bulgaria’s extensive double taxation treaties—currently signed with over 70 countries. This makes it one of the lowest dividend tax rates in the Eurozone, where rates often range between 19% and 30%.
Compared to other EU jurisdictions, Bulgaria clearly stands out with its favorable tax profile. The average Bulgaria company tax rate of 10% is far below the regional average, and the 5% tax on dividends is especially advantageous for foreign investors.
For example, in Germany the corporate tax rate is around 30%, and dividends are subject to additional levies of up to 26%. In the Czech Republic, the corporate tax rate is 21%, and the total tax burden on profits (corporate + dividend) can reach approximately 39%, which is more than three times higher than in Bulgaria.
In 2025, Bulgaria continues to offer one of the most beneficial tax environments in the EU: a low Bulgaria company tax, advantageous Bulgaria VAT regulations, and a minimal dividend tax rate provide an ideal platform for small and medium-sized businesses, especially in the IT, e-commerce, fintech, and consulting sectors.
6. Business Visa and Residency Options
For non-residents planning to set up a business in Bulgaria, there are several legal pathways to obtain a long-term visa and residency.
Foreign entrepreneurs can apply for a Bulgarian business visa (Type D), which allows them to obtain a Temporary Residence Permit (TRP) valid for one year, with the possibility of annual renewal. This type of Bulgarian business visa is suitable for company owners and representatives of foreign firms, including startups, provided they demonstrate a viable business plan and have a minimum share capital of 100,000 BGN.
For those intending to actively operate a business, the most common route is through the registration of an OOD or EOOD. To qualify for residency by company formation in Bulgaria, applicants must create at least 10 full-time jobs for Bulgarian citizens or invest a minimum of 500,000 BGN in real estate or business assets. Upon successful Bulgaria company formation, the owner receives a Temporary Residence Permit, which can lead to Permanent Residency after five years of uninterrupted stay.
An alternative option is the Trade Representative Office (TRO). This route enables the opening of a representative office of a foreign company in Bulgaria without engaging in direct commercial activity. It does not require hiring local staff or making large capital investments. However, according to the 2025 updates in Bulgarian business immigration law, the parent company must show a minimum turnover of 500,000 BGN over the past two years, maintain a leased office space in Bulgaria, and appoint two local representatives.
| Pathway | Who It’s For | Key Requirements | Advantages | Limitations / Special Conditions |
| Business Visa (Type D) | Owners or representatives of foreign companies | • Business plan • Minimum share capital 100 000 BGN • Company registration (EOOD / OOD) | • Grants a Temporary Residence Permit (TRP) for 1 year • Ideal for startups and new ventures | • Must be renewed annually • Does not lead to Permanent Residence (PRP) without extra steps |
| TRP via Company (EOOD/OOD) | Entrepreneurs actively operating in Bulgaria | • Hire 10+ Bulgarian employees or • Invest 500 000 BGN in business or real estate | • TRP with a pathway to PRP after 5 years • Suitable for large-scale projects | • Higher costs • Requires genuine economic activity |
| Trade Representative Office (TRO) | Foreign companies seeking a presence in Bulgaria without commercial activity | • Parent-company turnover 500 000 BGN+ (last 2 years) • Office lease in Bulgaria • 2 resident representatives | • No need to incorporate a local company or invest capital • TRP possible without hiring staff | • Commercial activity is prohibited • Strict eligibility criteria for the parent company |
Conclusion
In 2025, Bulgaria will remain one of the most attractive jurisdictions for doing business in the EU. Its advantages include a 10% corporate tax rate, a minimum 5% dividend tax, a simplified administrative system, full EU membership, and the upcoming euro adoption in 2026, which will further enhance financial stability and reduce currency risks.
The country’s infrastructure, startup support programs, co-working spaces, and technology parks in Sofia and Plovdiv, along with access to qualified human resources, make it especially beneficial for IT, e-commerce, fintech, consulting, and manufacturing companies looking for access to the European market.
If you’re considering expanding into Europe, optimizing your tax burden, and gaining access to the 27-country EU market, now is the perfect time to proceed with bulgaria company formation. With the upcoming currency transition, it’s the ideal moment to begin.
Contact us today — and in just a few weeks, you can start operating in a trusted European jurisdiction with minimal administrative barriers.
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