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Online Business in Bulgaria: Tax & Legal Essentials

Dimitar Trendafilov

Bulgaria offers one of the most competitive tax and legal environments in the European Union for online businesses. Foreign entrepreneurs can start a company fully remotely with minimal share capital, benefiting from flat 10% corporate and personal income tax rates.

Reasons to incorporate a company in Bulgaria

Bulgaria offers the best fiscal conditions in the EU. Bulgarian Law allows a citizen of any country to incorporate a company with equal treatment of foreigners and citizens of EU. Your Bulgarian company can be managed fully remotely, you do not need to visit Bulgaria, as full company maintenance service will be provided by a local agent including bookkeeping, representation before the National Revenue Agency and other government bodies. A new company type introduced in 2025 /variable capital company or VCC/ provides the option of extremely fast incorporation and easy transition of capital shares from any country in the world. Main advantages of setting up a business in Bulgaria are:

♦ a flat corporate tax rate of 10%;
♦ a flat dividend tax of 5%;
♦ easier VAT /VIES registration requirements;
♦ double tax treaties with many countries;
♦ low cost social insurance;
♦ economic stability;
♦ cheapest workforce in the EU

Business Structures

Choosing the right legal entity determines your liability and tax calculation:

  • EOOD (Sole Owner LLC): The most popular entity for solo founders. Limits your liability to the company’s capital.
  • OOD (LLC with 2+ Partners): Ideal for multiple shareholders or partnerships, offering limited liability and shared equity.
  • * Initial incorporation documents of an EOOD include company name, address/or virtual office address where the company is represented by a local agent, director and shareholders’ details. In case the shareholder is a foreign legal entity, a certificate of good standing is required with a recent issuance date. The company Articles document also includes shares distribution, activity, any conditions that may differ from the general provisions of the Commercial Code (in case the law allows some terms to be explicitely negotiated); The director must provide a notarized consent to manage the company;
    ♦** The OOD/EOOD registration requires initial deposit of company capital in a bank account, so the client must be pre-approved by a bank. If the client wishes to incorporate a company without visiting Bulgaria, it is possible to have a ready made EOOD/OOD /a pre-registered company which is transferred to the client by auhorization/. Another feasible option is to register a variable capital company – VCC – straight on client’s name as the VCC registration process does not require initial company capital deposit hence approval by a bank is not needed for a VCC registration.
  • Freelancer (Self-Employed): Best for independent operators. You register with the BULSTAT registry. Taxes are paid on revenue minus a 25% statutory deductible expense allowance, making the effective tax rate roughly 7.5%.
  • * Freelancing is on the rise in Bulgaria, with professionals across IT, digital marketing, design, and consulting embracing the flexibility and autonomy it brings. But stepping into self-employment also means taking care of your legal and tax obligations. Before launching your freelance activity, it’s crucial to understand what’s required to stay compliant and avoid potential penalties.
  •  ** Freelancing offers flexibility—but also responsibility. At Eurofast, we help freelancers in Bulgaria register correctly, manage their taxes, and keep up with monthly obligations. Our team ensures you stay compliant while saving time and effort on administrative tasks. With our guidance, you can focus on growing your client base instead of worrying about paperwork.

Taxation Rates

Bulgaria is known as an EU tax haven due to its flat-rate structures:

  • Corporate Income Tax (CIT): Flat 10% on net profits for companies.
  • Personal Income Tax (PIT): Flat 10% on business income for freelancers.
  • Dividend Tax: 5% withholding tax on dividends distributed to individuals.
  • Social Security:

VAT Regulations

Threshold: Mandatory VAT registration is required if your taxable turnover reaches €51,130 within a consecutive 12-month period.
Standard Rate: 20% on the sale of goods and services within Bulgaria.
Cross-Border/EU Sales: B2B supplies to EU VAT-registered companies operate under a 0% VAT rate (using VIES and OSS systems)

Setup & Compliance Checklist

  1. Name Check & Reserve: Ensure your desired company name is available through the official Bulgarian Commercial Register.
  2. Drafting Docs: Prepare your Articles of Association or Founding Act.
  3. Capital Deposit: Deposit the minimum capital (can be as low as €1 into a corporate bank account.
  4. Filing: File the necessary documents (often via a trusted local proxy or accountant using an e-signature to save on state fees).
  5. Ongoing Compliance: Your business must file an annual tax return with the National Revenue Agency (NRA) by March 31st of the following year.

Because local compliance requires monthly VAT and social security reporting, it is highly recommended to contract a local bookkeeper or accounting firm. Monthly accounting costs for a clean, straightforward online business typically run between €120 and €250.

Notary Certifications

The important part in the process of a remote company incorporation or transfer of shares in EOOD/OOD is the notarized documents, provided by the client, which allow the local agent to sell the shares on his behalf.

Notarizations can be executed in front of a Notary Public in any country or in the Bulgarian consulate. In case the document is certified by a foreign Notary Public, an apostille is also required unless Bulgaria has a legal aid agreement for recognition of notarized documents without apostilling. There is some confusing division in the opinions of the Company Register officers whether the authorization for an OOD shares transfer can be accepted if the notary certification is performed by a non-Bulgarian Notary Public.

While most of the registry officers accept foreign notary certifications under the provisions of the Private International Law Code, very few insist on accepting in this particular case only documents certified by a Bulgarian consulate officer or a Bulgarian Notary.

Accounting Outsourcing – Common Reasons

Do Less. Achieve More. Focus on What Really Matters.

  1. Save Up to 50% on Your Accounting Costs,
  2. Create More Revenue.  With Current Staff,
  3. Grow your Business. Not Staffing Worries,
  4. No More Training New Accountants. EVER,
  5. Reach Us Anytime. 24-hours-a-day.

Our promises & invitation for a partnership

Paramount Accounting & Legal Services firm can provide complete legal & administrations services & information about other applicable taxes in Bulgaria, such as the corporate tax   business trips expenses tax treatment    social expenses taxation   taxes on representative expenses.

Our special PROMISES: 

  1. ALWAYS to keep our services prices at least 15% below the competition’s  prices  level,
  2. Till 3,000 EUR monthly turnover  ZERO Taxation,
  3. 5% taxation burden maximum,
  4. 4 hours expert support on all your questions w/o extra charge,
  5. 100% reimbursement of all damages (if any) caused by our advices,
  6. Loyalty, Integrity & Commitment is not just empty words/declarations, but everyday practice,
  7. Keeping to our promises 24/7 @ any circumstances.

See you Friends, looking forward to contribute to your business growth & success.

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