Why Start a Business in Bulgaria? Key Advantages for Entrepreneurs

business in bulgaria

Starting a business in Bulgaria is an attractive option for entrepreneurs looking to expand into the European market while benefiting from a low-tax environment, business-friendly regulations, and strategic location. Whether you are a startup founder, an investor, or an established business owner, Bulgaria offers numerous advantages that make it one of the best places in the EU to set up a company.

In this article, we explore why Bulgaria is a top destination for business formation and how you can take advantage of its economic and legal framework.

1. Low Corporate and Personal Income Tax Rates

One of Bulgaria’s most significant advantages is its low and flat corporate tax rate of 10%, which is among the lowest in the European Union. Additionally, personal income tax is also set at a flat 10%, making it an excellent choice for entrepreneurs who want to optimize their tax liabilities.

Comparison with Other EU Countries

  • Bulgaria: 10% corporate tax
  • Germany: 30–33% corporate tax
  • France: 25% corporate tax
  • Spain: 25% corporate tax

This low-tax regime allows businesses to retain more profits and reinvest them into growth, making Bulgaria a highly competitive jurisdiction for startups and established companies alike.

2. Bulgaria is Part of the EU – Access to a Huge Market

Bulgaria has been a full EU member since 2007, which means that businesses registered in the country have free access to the European Single Market, consisting of over 450 million consumers. This allows companies to trade freely within the EU without additional tariffs or restrictions.

For entrepreneurs looking to establish an EU-based company while benefiting from lower operational costs, Bulgaria presents an ideal option.

3. Low Cost of Doing Business

Another major advantage of Bulgaria is the low cost of doing business compared to other EU countries.

Affordable Labor Costs

  • The minimum wage in Bulgaria is among the lowest in the EU, making it attractive for companies that need to hire local staff.
  • The average salary in Bulgaria is significantly lower than in Western Europe, allowing businesses to maintain a competitive edge while minimizing expenses.

Lower Office and Operational Costs

  • Office rentals, utilities, and business services in Bulgaria are much more affordable than in Western European capitals.
  • High-quality outsourcing services (IT, accounting, legal support) are available at competitive rates.

By setting up a company in Bulgaria, entrepreneurs can reduce their expenses without sacrificing business quality.

4. No Tax on Capital Gains from EU-Listed Stocks & ETFs for Individuals

For individual investors, Bulgaria offers one of the most favorable tax regimes for stock market investments. Capital gains from stocks and ETFs listed on regulated EU markets are completely tax-exempt for private individuals.

However, for companies (legal entities), capital gains from trading stocks and ETFs are subject to the standard 10% corporate tax as part of their taxable profit. Businesses cannot benefit from the tax exemption available to individuals.

5. Easy and Fast Company Registration

Setting up a company in Bulgaria is quick, straightforward, and cost-effective. The most common type of company is a Limited Liability Company (OOD), which can be registered in a few days.

Company Formation Process

  • Choose a company name and check availability.
  • Prepare incorporation documents (can be done remotely).
  • Open a business bank account (some banks allow online account opening).
  • Register with the Bulgarian Trade Register.
  • Obtain a VAT number if necessary.

Foreign entrepreneurs can own 100% of a Bulgarian company, and in many cases, company formation can be completed remotely with professional assistance.

6. Bulgaria is an IT and Startup Hub

Bulgaria is home to a fast-growing IT and startup ecosystem, making it a great destination for technology companies and digital businesses.

  • Sofia, the capital, is known as the “Silicon Valley of Eastern Europe” due to its booming tech sector.
  • The country is a hotspot for outsourcing and software development, with global companies setting up operations here.
  • There are many startup incubators and accelerators supporting early-stage companies.

Entrepreneurs in technology, fintech, e-commerce, and digital services will find Bulgaria to be an excellent location to launch and scale their businesses.

7. Foreign Entrepreneurs Can Obtain Residency

Starting a business in Bulgaria can also provide residency opportunities for foreign investors and entrepreneurs.

  • Non-EU citizens can obtain a Type D visa and Bulgarian residence permit if they establish a company and hire local employees.
  • After five years of residency, foreigners may apply for permanent residence.

This makes Bulgaria an attractive destination for digital nomads, freelancers, and business owners looking for EU residency and a stable business environment.

8. Stable Banking System with Access to International Payments

Bulgaria has a stable and EU-compliant banking system, allowing businesses to operate efficiently.

  • Companies can open EUR, USD, and BGN accounts in local banks.
  • Online banking is widely available.
  • Bulgaria supports SEPA payments, making transactions within the EU fast and easy.

Additionally, Bulgaria is expected to join the Eurozone in the coming years, further increasing financial stability.

Conclusion: Is Bulgaria the Right Place for Your Business?

Bulgaria offers a low-tax, business-friendly environment within the EU, making it a highly attractive destination for entrepreneurs. Whether you are looking for tax optimization, lower operational costs, or access to the European market, Bulgaria provides significant advantages for businesses of all sizes.

If you are considering setting up a company in Bulgaria, Profirms can help you with the entire process – from company registration to tax and accounting compliance.

Contact us today and let us help you build a successful business in Bulgaria!

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