Starting a business in Bulgaria
Why choose for a company formation Bulgaria. Bulgaria is based in South Eastern Europe and is boarded by Serbia and Macedonia in the west, by Greece and Turkey in the south, the black sea is to the east and Romania to the north. The area of the country is 110,994 square kilometers with a population of 7.37 million people. Bulgaria is also part of the EU, NATO, The Council of Europe and the OSCE.
When it comes to saving taxes, many business people have chosen to start a business in Bulgaria due to Bulgaria’s flat corporate income tax rate that is at 10%, flat personal income tax rate of 10%, a dividend tax of 5%, along with these there is a wide network of benefits of double tax.
Taxation in Bulgaria
Bulgaria has a lot to offer to businesses and entrepreneurs from within the EU to lower taxes for the companies. Bulgaria has the lowest and most popular tax system in Europe. The features of this include:
- 10% corporation tax
- 0% corporation tax in regions with high unemployment (conditions apply)
- 10% personal income tax
- 5% withholding tax on dividends
- 0% withholding tax on dividends if distributed within the European Union under the parent/subsidiary directive
- Exemptions on paying VAT on importing production means for certain production projects
- Possibility for tax deduction on costs for research and development
- Expedited amortization term of 2 years on computers and production equipment
- No restrictions on the repatriation of capital
Corporate income tax applies to companies and partnerships constituted under Bulgarian law. With the corporate rate at just 10% it is calculated on a table profit.
Tax holiday is taken into consideration on certain conditions that include EU aid restrictions. A tax holiday enables a reduction in the amount of annual corporate income tax that is due on profits. Companies that are on special purpose and licensed investment companies that are authorized for public offering are exempt from corporate tax.
Starting a Company in Bulgaria to Save Taxes
There are many types of companies that are associated to starting a business in Bulgaria. Whatever company type is chosen, all businesses are required to be registered in the commercial register of the district court that is located within the area where the business is. The business must also be registered at the local tax office and also the National Statistical Institute.
The types of companies in Bulgaria
- Limited liability company (OOD)
- Single person limited liability company (EOOD)
- Joint stock company (AD)
- Holding company
- Joint venture
Starting a company in Bulgaria is affordable and easy, with the combination of low taxes and low labor Bulgaria makes for a favorable place to start and grow a business. With the many benefits available to new business owners, companies can start growing their company quickly and easily with the power of the economy. Bulgaria is also a member of the European Union and with the features of the single market, freedom of movement for people within their business is accessible and reliable for the future of the business.
Intercompany Solutions is eager to assist you in starting your Bulgarian business. We provide all-in company start-up services.