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Company formation Bulgaria
Bulgaria is a full member of the European Union (EU) and participates in the free movement of goods, the free movement of persons, services and the free movement of capital and payments.
Bulgaria has a very low tax rate compared to other EU countries. This is 10% on corporate profits and a uniform tax rate of 10% on the income of private individuals.
Production sites are the most lucrative
Particularly suitable are investments in production facilities, since energy and labor costs as well as construction real estate are low compared to other EU countries. The infrastructure has been greatly improved in recent years by EU funding. This ensures a good connection to Europe and other countries.
The choice of location Bulgaria is particularly suitable for small and medium-sized enterprises to exploit outsourcing potential. The outsourcing of business processes is in vogue and Bulgaria occupies the 2nd place in Europe in terms of outsourcing, according to the Bulgarian Vice Minister of Economic Affairs. The possibilities are versatile no matter if it concerns services or the manufacturing industry.
European Union promotes outsourcing activities
Outsourcing business processes is not only interesting because of lower costs, but also because the European Union is promoting outsourcing activities in Bulgaria. Funding opportunities include investments in e.g. Plant buildings, plants or in machines. According to case-by-case decisions, it is possible to have these investments promoted up to 50%.
Lower labor costs
Labor costs always play a crucial role in the choice of a company. Although Bulgaria has a mandatory minimum wage, it is the lowest compared to the European Union as a whole.
The average minimum wage in Bulgaria is € 0.95 per hour or € 159.00 per month.
(As of July 2013, source: Eurostat)
The biggest advantages of Bulgaria are
- Stable currency
- Sound public finances
- 10% flat tax (10% tax charge regardless of the profit level)
- Low labor costs
- Geographical proximity
- 0% customs duty within the European Union
- 0% duty on trade with Turkey
- 0% Customs Duty on Trade Some tax reliefs are available for certain industries (0% corporate tax), especially in regions with a high unemployment rate with Turkey
The biggest mistakes when starting a business abroad
Many agencies and law firms do not advise comprehensively or wrongly. Learn what to look for.
Gravity of the situation
Often, these law firms think foreign companies are half-silk, tax evasion is favored and mailbox companies are the leaders rather than the exception. This is true, however, only in some start-up agencies that do not have the necessary expertise. Self-proclaimed law firms that do not employ tax accountants or lawyers usually set up companies that are unlikely to operate legally. We set up and look after companies that can withstand tax audits and that are legally operated.
Do you have to live in the country where you start a company?
You can set up a company worldwide, as long as the respective country allows you as a foreigner to acquire shares in local companies or to act as a managing director. If this is not the case trustees can be used. For example, Cyprus allows every EU citizen to own and run a business. Nevertheless, trustees can be used for the purpose of identity protection. However, it is important that the management takes place locally, in the country in which the company is to be taxable. In addition, a permanent establishment must be set up. Without these, a major tax offices around the world do not recognize the company and in the worst case would require additional payment of corporate and business taxes plus late payment surcharges. We rent you a real office and set up a permanent establishment that meets all requirements beyond doubt.
Problematic Law firms: Secrecy is not regarded.
Some law firms bind customers with toggle contracts and exert pressure when the customer wants to close his company. If you are a client of a law firm that has established a legally flawed company, they can be blackmailed. Because in the case of a fiscal problem, law firms without a license are not bound by a duty of secrecy.
Migrating to a different law firm
We receive many inquiries from customers who already own a foreign company and are looking for a new law firm. The process of changing law firm is made often difficult on purpose. Therefore, we have developed a principle of trust. If you are not satisfied with us and want to change, you can do that at any time. The necessary documents (resignation letter), you receive from us standardized after founding. You are therefore protected against unexpected costs and you are free at any time to visit another law firm. So far we have not lost any customer to another law firm.
Privacy / Firm Location
Your accounting documents are kept safe with us. In addition, all electronic data is stored encrypted and accessible only by us, which are bound to a professional secrecy. All accounting records are also stored locally only. Neither authorities nor hackers are able to access this data.
There are quite a few locations in the world that do not charge taxes on companies or individuals, or only estimate a very low flat rate tax. But this can rarely be used without corresponding change of residence. If you are a resident of any major country, the relevant double taxation agreement is decisive. Providers who promise otherwise lead them to tax evasion, which in the case of discovery usually punishes severely. We advise against setting up companies in countries that have already been blacklisted by the OECD. The foundation is usually very cheap, but the tax consequences in your origin country can be devastating. Since the introduction of the automatic exchange of information between almost all major countries, an anonymous private account no longer exists.
We comply with the following code:
- Legally secure foundations
- No unexpected(hidden) costs
- No false promises
- Finding the right solution by focusing on your requirements
With this strategy, we have been on the market since 2013 and have not disappointed any customer so far. And we prioritize it in keeping that way. We strive to ensure that every client is satisfied and does not take risks with the solutions we provide for them, but only exploits legal opportunities. Starting a company that involves doing real business is more costly than a letterbox company, but it is the only way to save on taxes without risking legal action.
Bulgaria - also attractive for Greek entrepreneurs
"Poor neighbor" - this is what Bulgaria was called earlier. On the other hand, the country is in high demand among Greek entrepreneurs, mainly because of the lower tax burden. In Bulgaria, an entrepreneur pays about 10,000 euros less than in Greece for a profit of 50,000 euros. A powerful argument that causes many to relocate their business to Bulgaria.
- Skilled workers, partly multilingual and with international experience
- Bulgaria - perfect location for IT and electronics
- EU funding (over € 10 billion from EU funds by 2020)
- Easy access to the EU, Russia and the Middle East
Tax burden comparison
Here are some examples of the tax differences between a highly taxed jurisdiction versus major tax havens.
|Belgian Limited (SPRL/BVBA)||Bulgarian Limited||Malta Limited (Ltd.)|
|Profit||100,000 EUR||100,000 EUR||100,000 EUR|
|Corporate tax||33% including. surcharge tax rate 3% Totally 36,000 EUR(36%)||8,000 EUR (10% Flat-Tax)||5,000* EUR (5%) Effectively reduced from 35%|
|Profit after taxes||64,000 EUR||90,000 EUR||95,000 EUR|
|Key advantages||Strong economy, highly reputed country||0% customs duty within the European Union. low labor costs, stable currency||Stable and growing economy, high anonymity, low start-up capital|
|STEUERBELASTUNG||36,000 EUR||10.000 EUR||5.000 EUR|
Company formation Bulgaria - How it works
Starting a business in Malta is easy and the founder does not have to travel to Malta. For the foundation only a certified ID or passport copy and a power bill is needed. Depending on the choice of bank and also a short CV or bank reference.