Bulgaria is considered one of the favorite European countries for companies to relocate. This is due to the advantageous corporate tax rate in Bulgaria, an optimistic business environment, and various advantages designed to attract foreign investors and new companies.
Bulgaria has become an emerging destination for companies looking to maximize their earnings and reduce costs, as well as an entrance into the European market. We have already mentioned the attractive corporate tax rate in Bulgaria, which is among the lowest in Europe, as well as the skilled and cheaper workforce and exciting opportunities for foreign businesses and investors.
We will discuss the details of the corporate tax rate in Bulgaria and how you or your company can benefit from it. However, the best step any company can take when considering moving to Bulgaria is to opt for Accountancy Bulgaria’s accounting services. Experts in the ins and outs of the Bulgarian tax scheme and the needs for company registration, Accountancy Bulgaria can guide your business towards success with multilingual professionals that can take care of the day-to-day accounting needs, as well as offer a personalized service that will guarantee you can focus on your business and make it grow.
What are the types of corporations in Bulgaria?
At the moment of thinking of registering a new company in Bulgaria, it is important to decide what type of corporation is best suited for the business activities.
These are the most common types of corporations in Bulgaria:
- EOOD or OOD: This is a Limited Liability Company. In these types of corporations, the shareholders are not liable for any financial responsibilities. EOODs require a very small initial capital, and only one shareholder is required.
- A Bulgarian Joint Stock Company: also known as AD, is a corporation type more suited to big businesses. The initial capital at the time of incorporation is a lot higher.
- Register as a Freelancer: in Bulgaria. Commonly called a single entrepreneur company, in this case, the owner is, in fact, liable, meaning the freelancers are responsible for the company debt (personal and company assets are combined) as well as entitled to its profits.
Corporate tax rate in Bulgaria
Bulgaria has earned a reputation as a tax haven thanks to its corporate tax rate of 10%.
Companies must only pay 10% of their profit once a year. No prepayments are required (under a certain limit), and there are no complicated loopholes.
Taxes in Bulgaria: the basics
The 10% flat rate on corporate income is simple.
Once a year, companies must present an annual report with detailed income and deductible costs. Out of the final amount, 10% is due in corporate taxes.
The company’s accountant will present the appropriate reports and meet the requirements.
Benefits for companies registering in Bulgaria
There are many advantages for companies registering in Bulgaria, including the corporate tax rate. Yes, companies can reduce their costs, meaning they have more capital to invest in growing and developing their business. Additionally, many benefits act as main points to attract companies to Bulgaria, including a cheaper, highly educated workforce, incentives for investors, lower social security contributions, easy access to the European market, etc.
Additionally, to the 10% tax rate, we can mention a few other benefits Bulgaria has in stock for corporations:
- Investment opportunities: The lower tax system attracts investors, bringing money into Bulgaria and creating even more financial opportunities. A system the government is keen in continuing.
- Lower cost of living: Life can be up to 50% cheaper than in other countries, like the US.
- More affordable and well-educated workforce: Workers are often multilingual, experienced, and cheaper, which can be a big attractive point for companies.
- The positive business environment: Allows companies to find more opportunities to invest in their growth and development.
- Bulgaria belongs to the European Union: Registering a company in Bulgaria provides access to over 500 million consumers across the EU. This is the best entryway for non-European businesses to start expanding in Europe.
Conclusion
There are many benefits for companies looking to relocate to this European country; the corporate tax rate in Bulgaria is among the many reasons foreign companies and investors may look into opening a company in Bulgaria.
If you are interested in either investing, opening a company, or relocating to Bulgaria, engaging the services of Accountancy Bulgaria can make a difference in your business path to success.
