Incorporate in Bulgaria. The EU's lowest-tax, fastest-forming member state.
A Bulgarian OOD (Дружество с ограничена отговорност – limited liability company) is a full EU-member tax-resident entity with a 10% corporate income tax on worldwide profits. This is the lowest corporate tax rate in the entire European Union. Combined with a 10% flat personal income tax on the individual founder, a 5% dividend withholding tax (reduced to 0% for EU/EEA parents under the Parent-Subsidiary Directive), 70+ double-tax treaties, access to the EU Interest & Royalties Directive, digital formation in 7–14 business days, and Schengen membership (since 1 January 2025), Bulgaria is where founders form real operating companies when they want an EU-member jurisdiction, the lowest headline rate, and the fastest setup.
Used by European tech founders, service exporters, trading operations, and subsidiary holders who need an EU member with the lowest corporate tax rate, fast digital formation, and genuine operational substance.
Why form a Bulgarian OOD?
Bulgaria offers the lowest corporate income tax rate in the European Union at a flat 10%. This is not a treaty benefit or an exemption; it is the actual statutory rate. A Bulgaria-tax-resident OOD pays 10% on its worldwide income. Layer in a 10% flat personal income tax on the founder, a 5% dividend withholding tax (0% to EU/EEA parents via the Parent-Subsidiary Directive), 70+ double-tax treaties, access to EU Directives, digital formation in 7–14 days, and Schengen membership, and Bulgaria becomes the cheapest EU jurisdiction for founders who want a real operating company, genuine EU presence, and the lowest headline rate.
10% corporate tax — lowest in the EU
Bulgaria's statutory corporate income tax is 10% on worldwide profits, flat and non-negotiable. No exemptions, no credits, no carve-outs: all Bulgaria-resident companies pay 10%. This is the lowest rate among all EU member states. For a typical operating company, the combined corporate-plus-personal rate is around 18–19%, which is lower than most EU jurisdictions.
10% flat personal income tax
Bulgaria applies a flat 10% personal income tax on employment income and self-employment earnings. When the founder is Bulgaria-resident, the personal rate is also 10%, creating a 10%+10% headline stack that is highly competitive across the EU. No progressive brackets, no complexity.
5% dividend withholding (0% to EU/EEA parents)
Bulgaria imposes a 5% withholding tax on outbound dividends. However, the Parent-Subsidiary Directive (2011/96/EU) typically reduces this to 0% when dividends flow to a qualifying EU or EEA parent company (at least 10% holding for 12 months). This means group dividends can flow out of Bulgaria without a withholding-tax leakage layer.
70+ double-tax treaties and EU Directive access
Bulgaria has 70+ double-tax treaties covering most of Europe, the US, Asia, and the Middle East. As an EU member, Bulgaria companies also benefit from the Interest & Royalties Directive (eliminating withholding on intra-EU interest and royalties) and the Parent-Subsidiary Directive. This treaty and directive access ensures minimal withholding and tax leakage on cross-border payments.
Digital formation in 7–14 days
Bulgaria's Commercial Register is fully digital. An OOD can be filed online, approved, and registered within 7–14 business days. This is the fastest EU formation among comparable jurisdictions. No physical signatures, no notary visits, no delays. Digital from start to finish.
Schengen member (since 1 January 2025)
Bulgaria became a full Schengen member on 1 January 2025, joining the borderless EU travel and goods zone. This means Bulgarian companies can operate seamlessly across the EU without border controls, improving the practical substance and mobility of operations within the single market.
What is included in your Bulgarian OOD formation
The US$1,995 fixed price covers the full formation cycle through the Commercial Register, tax pre-registration, and VAT setup where applicable. No hidden extras.
Bulgaria vs other low-cost EU jurisdictions
Bulgaria competes with Cyprus, Romania, and Hungary on headline rate and cost. Here is the honest picture.
| Feature | Bulgaria | Cyprus | Romania | Hungary |
|---|---|---|---|---|
| Base formation cost | US$1,995 | US$3,495 | US$2,295 | US$2,150 |
| Setup time | 7–14 days | ~14 days | ~21 days | ~14 days |
| Headline corporate tax | 10% (flat) | 12.5% | 16% | 15.5% |
| Personal income tax | 10% (flat) | 0% (non-dom) | 10% | 9% |
| Dividend withholding (domestic) | 5% (0% to EU) | 0% | 5% (5% to EU) | 0% |
| Capital gains tax | Same as corporate | 0% | 10% | 16.5% |
| EU member state | Yes (Schengen) | Yes | Yes (Schengen) | Yes |
| Double-tax treaties | 70+ | 60+ | 80+ | 75+ |
| Annual renewal | US$1,495 | US$2,195 | US$1,795 | US$1,595 |
The bottom line: pick Bulgaria when you want the absolute lowest EU corporate tax rate (10%), the fastest digital formation (7–14 days), and the cheapest formation cost (US$1,995) for a real operating company. Pick Cyprus if you need a non-dom individual regime stacked with participation exemption and 0% capital gains on share disposals. Pick Romania for a more traditional low-cost EU option. Pick Hungary if you want a more established financial infrastructure.
How to incorporate in Bulgaria, step by step
About 7 to 14 business days is the realistic door-to-door timeline. Here is how the process actually runs.
Name reservation and paperwork
We reserve your name of choice and submit the paperwork for the directors and shareholders.
Commercial Register filing and digital submission
Memorandum and Articles filed with the Bulgarian Commercial Register online. Name approval, application form, and supporting documents are uploaded digitally. The Commercial Register issues the certificate of incorporation within 7–14 business days of filing.
Tax registration and VAT pre-registration
Registration with the Bulgarian National Revenue Agency (НАП) completed, tax identification number issued, VAT pre-registration handled where applicable, and the digital document pack delivered. You now have a working Bulgarian OOD registered for tax and ready to operate or open a corporate bank account.
Optional Bulgarian OOD add-ons
Bulgarian clients typically need ongoing tax, accounting, and compliance support to maintain residence and treaty benefits. These are the extras most commonly added.
Bulgaria-resident director (management and control)
Bulgaria-resident director appointed to anchor management and control inside Bulgaria—the underpinning for tax residence and treaty access. Real board activity, not a rubber stamp.
Bank account introduction
Warm introduction to a Bulgarian, EU, or fintech bank we regularly place Bulgarian OODs with, including EMI options for multi-currency and fast onboarding.
Bulgarian tax and accounting pack
Annual bookkeeping, tax return, financial statements, and statutory audit (where required). Essential for all Bulgarian companies maintaining tax residence and treaty benefits.
Dividend withholding optimization
Technical memo and documentation plan for dividend flows to EU/EEA parents, qualifying for 0% withholding under the Parent-Subsidiary Directive. Ensures compliant, low-leakage distributions.
VAT registration and compliance
Full VAT registration with the Bulgarian National Revenue Agency and monthly VAT return filing. Required for intra-EU trading and supply of services.
Annual compliance and renewal
Registered office renewal, annual tax filing, statutory register maintenance, and beneficial-owner register upkeep. Covers year two and onward.
Bulgarian OOD: frequently asked questions
If you are researching whether to incorporate in Bulgaria, these are the questions we hear most often on strategy calls.
How long does it take to incorporate in Bulgaria?
About 7 to 14 business days from paperwork clearance to certificate issuance. Bulgaria's Commercial Register is fully digital. Name approval, document submission, and tax registration are all handled online without notary visits or wet-ink signatures.
Do I need to visit Bulgaria to form the company?
No. Everything is handled remotely. Documents are signed electronically. The certificate of incorporation and tax identification number are delivered digitally. You never need to visit Bulgaria to form or operate the OOD.
What tax does a Bulgarian OOD actually pay?
Bulgaria uses residence-based taxation. A Bulgaria-tax-resident OOD pays 10% corporate income tax on worldwide profits. There are no exemptions, no carve-outs, no IP Box: the rate is flat 10% on all income. Combined with a 10% personal income tax on the founder and a 5% (0% to EU/EEA) dividend withholding tax, the combined headline rate is around 18–19%, which is lower than most EU jurisdictions.
Is Bulgaria a territorial tax jurisdiction?
No. Bulgaria is residence-based. A Bulgaria-tax-resident company is taxed on its worldwide income at 10%. The reason Bulgaria works is not territoriality but the fact that 10% is simply the lowest corporate tax rate in the entire European Union. There are no exemptions or special carve-outs; the flat 10% rate applies to all worldwide income.
Why is Bulgaria cheaper than Cyprus or Romania?
Bulgaria has three cost advantages: the formation fee is US$1,995 (versus US$3,495 for Cyprus and US$2,295 for Romania); the setup is fastest at 7–14 days (versus ~14 days for Cyprus and ~21 days for Romania); and the annual renewal cost is US$1,495 (versus US$2,195 for Cyprus). The headline tax rate is also the lowest: 10% (versus 12.5% for Cyprus and 16% for Romania).
What is the Parent-Subsidiary Directive and how does it apply?
The EU Parent-Subsidiary Directive (2011/96/EU) eliminates withholding tax on dividends paid from a Bulgarian subsidiary to a qualifying EU/EEA parent company. The conditions are: the parent must hold at least 10% of shares for at least 12 months. If these conditions are met, Bulgaria's 5% dividend withholding is reduced to 0%. This makes Bulgaria ideal for holding company structures where the parent is in an EU/EEA jurisdiction.
Do I need Bulgaria management and control?
To be Bulgaria-tax-resident and to access Bulgaria's treaty benefits, the company must have management and control from Bulgaria. This typically means at least one Bulgaria-resident director and board meetings held in Bulgaria. Our Bulgaria-resident director add-on anchors this requirement properly rather than using a rubber-stamp nominee.
What are Bulgaria's double-tax treaties?
Bulgaria has 70+ double-tax treaties covering most EU member states, the UK, the US, Canada, Australia, India, China, Russia, Ukraine, the Middle East, and most other significant jurisdictions. As an EU member, Bulgaria also benefits from the Interest & Royalties Directive, which eliminates withholding tax on intra-EU interest and royalties between qualified companies.
Is Bulgaria in Schengen?
Yes. Bulgaria became a full Schengen member on 1 January 2025. This means Bulgarian companies can now move goods and people seamlessly across the EU without border controls. This enhances the practical operational substance and mobility of Bulgarian operating companies within the single market.
Can I hold intellectual property in a Bulgarian OOD?
Yes. Bulgarian OODs can hold, license, and transfer intellectual property. However, Bulgaria does not have an IP Box like Cyprus. IP income is subject to the same 10% corporate tax rate as operating income. If you want to leverage an IP Box (2.5% effective rate), Cyprus remains the better choice. If you just want cheap IP holding with a low 10% headline rate, Bulgaria is efficient.
Do I have to file accounts and returns?
Yes. Bulgarian OODs file annual financial statements with the Commercial Register, a corporate tax return with the National Revenue Agency (НАП), and VAT returns where registered for VAT. Bulgaria is a full-filing jurisdiction, not a nil-filing jurisdiction. Our Bulgarian tax and accounting pack handles the full cycle.
Is forming a Bulgarian OOD legal?
Fully legal. A Bulgarian OOD is a full EU-member tax-resident entity paying 10% on worldwide profits, filing audited accounts, and subject to CRS, FATCA, and country-by-country reporting. The low effective rate comes from the fact that 10% is the actual statutory rate, not from exemptions or hiding income. You report ownership correctly in your country of tax residence. We handle formation and Bulgarian compliance. Your tax adviser handles home-country reporting.
Ready to form your Bulgarian OOD?
Seven to fourteen business days, fixed US$1,995, everything included through the Commercial Register and Bulgarian Tax Department. Or book a strategy call first and we will pressure-test the residence and treaty plan against your actual structure before you commit.
Sources and references
- Bulgarian Commercial Register, Official Commercial Register (BRRA)
- Bulgarian National Revenue Agency (НАП), Ministry of Finance Tax Authority
- Bulgarian Commercial Act (Търговски закон).
- Corporate Income Tax Act (Закон за корпоративното подоходно облагане).
- Value Added Tax Law (Закон за данъка добавена стойност).
- European Union, EU list of non-cooperative jurisdictions for tax purposes
- EU Parent-Subsidiary Directive (2011/96/EU) and Interest & Royalties Directive (2003/49/EC).
- Bulgaria Schengen Accession, 1 January 2025.