Quick answer
For most freelancers and founders in Bulgaria in 2026 the choice is between registering as a self-insured freelancer (10% tax after a 25% allowance) and a one-person limited company, the EOOD (10% corporate tax plus 5% on dividends, about 14.5% in total). An EOOD needs almost no capital and is registered in about a week.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Check my business setup →You want to invoice clients from Bulgaria, or run a Bulgarian business while travelling. Bulgaria offers some of the lowest business tax rates in the EU, but the form you choose decides your liability, your social security and how you take money out. This guide compares every option and tells you which fits what you do.
Bulgaria legal forms of business in 2026: the key figures
| Item | Rule for 2026 |
|---|---|
| Corporate income tax | 10% flat on profit |
| Dividend tax | 5% final tax for individuals |
| Freelancer (self-insured) income tax | 10% after a 25% statutory expense allowance |
| Sole trader (ET) income tax | 15% on profit |
| EOOD / OOD minimum capital | Symbolic, about EUR 1 (formerly BGN 2) |
| AD minimum capital | EUR 25,000 (formerly BGN 50,000) |
| VAT registration threshold | EUR 84,872 of taxable turnover in 12 months (formerly BGN 166,000) |
| Registration authority | Registry Agency – Commercial Register |
Is this guide for you?
Read on if you…
- are a freelancer, consultant or developer deciding how to invoice from Bulgaria;
- want to set up a Bulgarian company, possibly while living elsewhere;
- are comparing Bulgaria with other low-tax EU countries for your business.
Probably not your case if you…
- only earn a salary from one employer; see the Bulgarian personal income tax system;
- run a regulated business such as a bank or insurer; those need special licences.
Which legal forms exist in Bulgaria?
The Commerce Act sets the company forms. Freelancers who are not traders work under the Personal Income Taxes Act (PITA) and the Social Insurance Code.
| Form | Liability | Minimum capital | Setup cost and time | Tax | Can a non-resident run it remotely? |
|---|---|---|---|---|---|
| Self-insured freelancer (свободна професия) | Unlimited | None | Free; NRA registration within 7 days of starting | 10% after 25% allowance; contributions about 27.8% on a capped base | Only if you are Bulgarian resident; it is a personal status |
| Sole trader (ET) | Unlimited, personal assets exposed | None | Low state fee; about 3 to 5 working days | 15% on profit; contributions as self-insured | Possible, but rarely sensible |
| EOOD (single-member limited company) | Limited to capital | About EUR 1 | EUR 300 to 700 with a lawyer and notarised signatures; 3 to 7 working days | 10% on profit plus 5% on dividends | Yes: foreign owner and manager allowed |
| OOD (multi-member limited company) | Limited | About EUR 1 | As EOOD | As EOOD | Yes |
| AD / EAD (joint-stock company) | Limited | EUR 25,000 | EUR 1,000 or more; board structure; 1 to 2 weeks | 10% plus 5% on dividends | Yes, but heavy for small businesses |
| SD / KD (partnerships) | At least one partner unlimited | None | Similar to OOD | 10% corporate tax on the partnership | Yes |
| Branch of a foreign company | Parent liable | None | Foreign documents apostilled and translated; 1 to 2 weeks | 10% on profit attributable to the branch | Yes; the parent is the legal person |
Freelancer, sole trader or EOOD: which is right for what you do?
Honestly? For most location-independent professionals it is freelancer versus EOOD. The ET is mostly a legacy option: 15% tax and unlimited liability.
Register as a freelancer if…
- you bill under roughly EUR 50,000 a year and have few real costs;
- you want money in your account without a dividend step;
- you are and will stay Bulgarian tax resident.
The 25% allowance means only 75% of your fees are taxed. Contributions stop growing once your monthly base reaches the cap of EUR 2,111.64. Above that, every extra euro costs only 7.5% in tax. That is hard to beat.
Choose an EOOD if…
- you want limited liability or clients who prefer contracting a company;
- you have real costs above 25% of revenue, or reinvest profits;
- you may move abroad and want a structure that stays put.
The company deducts actual expenses; see business expenses in Bulgaria. It pays 10% on profit, then 5% when you take dividends. The total is 14.5% on distributed profit. Details are in corporate income taxes in Bulgaria.
Here's the catch. A manager who is also the owner must usually pay social security as a manager, on at least the minimum wage, or be paid under a management contract.
Example – Dimitar, freelance data engineer, EUR 90,000 revenue, EUR 8,000 real costs
As a freelancer, Dimitar's taxable base is EUR 67,500 after the 25% allowance. Contributions on the capped base cost about EUR 7,050, and income tax about EUR 6,050. After his real costs, he keeps about EUR 68,900, or 77% of revenue. As an EOOD paying him a minimum-wage management fee, the company pays 10% on about EUR 72,500 profit, and he pays 5% on the dividends. He keeps about EUR 68,700. A near tie: freelancing is simpler, the EOOD wins once costs rise.
Dimitar's choice came down to two numbers. Yours may not.
Get your business setup checked by Heavnn before you register, not after the first tax bill.
Check my business setup →How do you set up an EOOD in Bulgaria? Step by step
- Choose and check the name in the Commercial Register. You can reserve it online.
- Draft the deed of incorporation and articles. One owner is enough. Name a manager, who can be a non-resident.
- Sign the manager's consent and specimen signature before a notary, or a Bulgarian consulate abroad.
- Pay in the capital to a Bulgarian bank, which issues a certificate.
- File with the Registry Agency, online with a qualified electronic signature or through a lawyer with a power of attorney. Include the declaration of the ultimate beneficial owner.
- Receive your UIC, the company's single ID number. It doubles as the tax number.
- Register for VAT if you pass EUR 84,872 or receive services from EU suppliers. You may need a VAT number before your first EU invoice.
Setting up from abroad is possible end to end. Heavnn's team handles it; see Heavnn business setup.
Can you run a Bulgarian company from abroad?
Yes, legally. Bulgaria treats any company registered there as Bulgarian tax resident. The catch is your new country.
Many countries tax a foreign company that is effectively managed on their soil. That is the place of effective management – basically where the key decisions are really taken. If you sit in Lisbon and run your EOOD alone, Portugal may say the company is Portuguese. The treaty then decides, often through mutual agreement.
A smaller risk is a permanent establishment – a fixed place of business in another country, such as your home office used for the company. It can make part of the profit taxable abroad.
Simple fixes: hold board decisions in Bulgaria, appoint a local co-manager, keep records and a real office there. Or match the company to where you live.
Common mistakes (and what they cost)
- Choosing an ET by default → 15% tax instead of 10%, and your personal assets are exposed.
- Running the EOOD alone from another country → foreign corporate tax on the profit, plus Bulgarian tax: double taxation until resolved.
- Missing VAT registration on EU services → retroactive VAT, interest and fines under the VAT Act.
- Not filing the beneficial owner declaration → registration refused or fines.
- Taking money out of the EOOD as loans → reclassification as hidden profit distribution, taxed with penalties.
Compare with the region: legal forms in Romania and legal forms in Hungary.
Frequently asked questions
What is the cheapest business structure in Bulgaria?
For income up to roughly EUR 50,000 to 80,000 with low costs, the self-insured freelancer status is usually cheapest. You pay 10% on 75% of fees, after capped social security. An EOOD wins when real costs are high, when you reinvest profits, or when you need limited liability. The sole trader form rarely wins because of its 15% rate.
How much does it cost to open an EOOD in Bulgaria?
State fees are low, typically tens of euros for an online filing. With a lawyer, notarised signatures, translations and a registered address, expect EUR 300 to 700 in total. Registration usually takes 3 to 7 working days. Add an accountant, typically EUR 50 to 150 a month for a small company.
Can a foreigner own 100% of a Bulgarian company?
Yes. There are no nationality restrictions on owning or managing an EOOD or OOD, except in a few regulated sectors and for agricultural land. The owner and the manager can both live abroad. You will need a registered address in Bulgaria and must declare the ultimate beneficial owner.
Is the 10% corporate tax rate the same for all companies?
Yes, 10% applies to all resident companies and permanent establishments. Some activities have separate regimes, such as gambling or shipping. EU global minimum tax rules apply only to large groups with revenue above EUR 750 million, so they do not affect small businesses.
Do I pay social security as an EOOD owner?
Usually yes, if you manage the company. Owners who work in it must pay contributions as self-insured or as managers, on at least the minimum wage and up to the monthly cap. Owners who only receive dividends and do not work in the company generally do not pay contributions on those dividends.
Should I set up the company in Bulgaria if I do not live there?
Only with a plan for management and control. If you run the company alone from your country of residence, that country may tax its profits as if it were local. A Bulgarian company makes most sense if you live in Bulgaria or have real substance there.
Related guides
- Corporate income taxes in Bulgaria
- Business expenses in Bulgaria
- Bulgaria's personal income tax system
- Tax incentives for expats and digital nomads in Bulgaria
- Bulgaria tax landscape overview
- Legal forms of business in Romania
- All country tax guides
Sources
- Registry Agency of Bulgaria – Commercial Register
- National Revenue Agency (NRA)
- Ministry of Finance of Bulgaria
- State Gazette of the Republic of Bulgaria
- OECD – Model Tax Convention and tax treaties
This guide is general information, not personalised tax advice. See how we research and review.
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