How to Incorporate a Business in Bulgaria: Complete Guide 2026

Last verified: April 2026

This guide is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult a qualified professional for your specific situation.

Key Takeaways

• EU Gateway with Low Costs: Bulgaria provides full access to the EU Single Market with significantly lower operational costs and a streamlined, remote-friendly incorporation process.
• Ultra-Competitive Tax Regime: A flat 10% corporate income tax and a 5% dividend tax create one of the most attractive tax environments in Europe.
• Simple & Fast Setup: The most common entity, the Limited Liability Company (OOD/EOOD), requires only BGN 2 (€1) in minimum capital and can be registered in just 3-5 business days.
• Full Foreign Ownership: Foreigners can own 100% of a Bulgarian company without the need for a local director or partner, offering complete control.
• Eurozone & Schengen Member: As of 2026, Bulgaria's adoption of the Euro and entry into the Schengen Area have further simplified trade, travel, and banking for businesses.
• Remote-Friendly Process: The entire company formation can be managed remotely through a power of attorney, minimizing the need for physical travel.
• Strategic Location: Situated at the crossroads of Europe and Asia, Bulgaria offers a strategic base for businesses targeting both continents.

Introduction

In the search for a strategic, cost-effective, and tax-efficient base within the European Union, international entrepreneurs are increasingly turning to Bulgaria. At Incorporator.io, we've observed this trend firsthand. The nation has meticulously crafted a pro-business environment that combines the benefits of full EU membership with some of the lowest operational costs and tax rates on the continent. With its official adoption of the Euro and entry into the Schengen Zone in 2026, Bulgaria has solidified its position as a premier gateway to the European Single Market.

This guide provides a comprehensive, step-by-step walkthrough of the incorporation process in Bulgaria for 2026. We will delve into the legal structures, costs, tax implications, and practical considerations you need to understand to successfully launch and operate your business. Whether you are a digital nomad, a startup founder, or an established enterprise looking to expand your footprint, this resource is designed to equip you with the authoritative and actionable information needed to make an informed decision.

Legal Framework & Entity Types

Choosing the right legal structure is a critical decision when incorporating in Bulgaria. The framework is governed by the Bulgarian Commercial Act, which outlines several entity types available to foreign investors. For most entrepreneurs, the choice narrows down to two primary forms of the Limited Liability Company, with the Joint-Stock Company reserved for larger, more complex operations.

Limited Liability Company (OOD/EOOD)

The vast majority of foreign investors opt for the Limited Liability Company structure due to its flexibility, minimal capital requirements, and straightforward governance. It offers robust liability protection, separating your personal assets from the company's debts.

• EOOD (Single-Member Limited Liability Company): This is the ideal structure for a solo founder. It provides the full legal protection of a corporation with the simplicity of a sole proprietorship. You have complete control over all decisions.
• OOD (Multi-Member Limited Liability Company): If you are starting a business with one or more partners, the OOD is the appropriate choice. It allows for a clear definition of ownership shares and management responsibilities through the Articles of Association and a shareholder agreement.

Joint-Stock Company (AD)

The Joint-Stock Company is designed for large-scale operations and businesses that intend to raise significant capital from the public or private investors. Its key feature is the ability to issue shares that are freely transferable. However, this flexibility comes with higher costs, a substantial minimum capital requirement of BGN 50,000 (approx. €25,500), and more stringent regulatory, reporting, and auditing requirements, including a mandatory Board of Directors.

Step-by-Step Incorporation Process

The Bulgarian government has streamlined the company registration process, making it one of the most efficient in the EU. When managed by a professional service provider like us at Incorporator.io, the entire process can be completed remotely within a few business days.

Step 1: Choose and Reserve a Unique Company Name Your first action is to select a unique name for your company. This name must not already be in use in the Bulgarian Commercial Register [1]. We recommend preparing several options. The name must also include the appropriate legal suffix in Cyrillic—"ЕООД" for an EOOD or "ООД" for an OOD.

Step 2: Prepare and Notarize Incorporation Documents This is the most critical phase. The required documents include:

• Articles of Association (or Constituent Act for an EOOD): This foundational document outlines the company's purpose, management structure, and internal rules.
• Minutes of the Founder's Meeting: A formal record of the decision to establish the company.
• Management Consent and Specimen Signature: The appointed manager(s) must provide a notarized consent form along with a sample of their signature.
• Power of Attorney (if incorporating remotely): A notarized and apostilled Power of Attorney is required to authorize your local representative to act on your behalf.

If you are outside Bulgaria, these documents must be signed at a Bulgarian consulate or notarized and then apostilled in your country of residence [2].

Step 3: Open a Capital Contribution Bank Account Next, you must open a special "capital" bank account and deposit the minimum share capital (BGN 2). The bank will issue a certificate confirming the deposit, which is a mandatory document for the registration application. While the legal minimum is symbolic, we advise depositing a slightly larger amount (e.g., €500-€1,000) to enhance the company's credibility with banks and partners [2].

Step 4: File for Registration with the Commercial Register With all documents prepared, your representative will submit the application to the Bulgarian Commercial Register and Registry Agency. The application can be filed electronically, which is faster and cheaper (a state fee of BGN 55, approx. €28) than a paper filing (BGN 110, approx. €56) [2]. Upon successful review, the agency issues a Unified Identification Code (UIC), your company's unique registration number. This typically takes 2-3 business days.

Step 5: Post-Registration and Tax Registration Once your company is officially registered, a few final steps are necessary:

• Convert Bank Account: The temporary capital account is converted into a permanent, fully operational business bank account.
• VAT Registration: This is a separate but crucial step. VAT registration is mandatory if your annual turnover is projected to exceed BGN 100,000 (approx. €51,130) or if you engage in specific cross-border EU transactions. Voluntary registration is also possible and often recommended to reclaim input VAT on initial expenses [1].
• Social Security Registration: If you plan to hire employees, the company must be registered with the National Social Security Institute within seven days of the first employment contract.

Costs & Fees

Bulgaria is renowned for its low incorporation and maintenance costs. While the exact total will depend on the complexity of your structure and whether you handle the process remotely, the expenses are significantly lower than in most other EU jurisdictions. Below is a detailed breakdown of what you can expect.

Note: Costs are estimates for a standard EOOD/OOD and can vary. Remote incorporation costs are higher due to the need for apostilled documents, translations, and comprehensive professional assistance [2].

Ongoing Annual Costs

Beyond the initial setup, you must budget for annual maintenance to keep your company in good standing. These costs are also highly competitive:

• Accounting & Annual Filings: This is the most significant ongoing expense. A typical retainer for a small to medium-sized enterprise (SME), including bookkeeping, VAT returns (if applicable), and annual financial statement/tax return preparation, ranges from €1,200 to €2,500 per year [1].
• Registered Legal Address: Every Bulgarian company must have a legal address in the country. A virtual office service, which includes mail forwarding, is a cost-effective solution, typically costing €120 to €300 per year [2].
• Audits: Most SMEs are exempt from mandatory audits, which further reduces compliance costs. Audits are generally only required for larger companies or those in specific regulated industries.

Tax Overview

Bulgaria's tax regime is the primary attraction for most foreign investors. The system is characterized by its simplicity and low rates, making it one of the most competitive in the European Union.

• Corporate Income Tax (CIT): A 10% flat rate is applied to the worldwide profits of Bulgarian companies. This is one of the lowest corporate tax rates in the EU, tied with Hungary [2]. There are no progressive brackets, ensuring predictability for businesses of all sizes.

• Dividend Tax: A 5% withholding tax is levied on dividends distributed to non-resident individuals and foreign legal entities. This rate can be reduced to 0% if the dividend is paid to a parent company located in another EU/EEA member state, under the terms of the EU Parent-Subsidiary Directive [1]. Double taxation treaties may also provide for lower rates.

• Value Added Tax (VAT): The standard VAT rate in Bulgaria is 20%. A reduced rate of 9% applies to certain goods and services, such as hotel accommodations and books. As mentioned, VAT registration is mandatory for companies with an annual turnover exceeding BGN 100,000 (approx. €51,130) [2].

• Capital Gains Tax: Capital gains realized by a company are treated as regular business income and are taxed at the standard 10% corporate income tax rate.

• Social Security Contributions: If the company has employees, both the employer and employee must contribute to social security. The total employer contribution is approximately 18.92%, while the employee contributes around 13.78% of the gross salary.

This straightforward and low-tax framework allows businesses to retain a larger portion of their earnings for reinvestment, growth, and distribution.

Banking & Financial Infrastructure

Bulgaria has a modern and stable banking sector, comprising both well-established local banks and major international banking groups. The adoption of the Euro has further integrated the country's financial system with the rest of Europe, simplifying transactions and reducing currency risk.

However, opening a corporate bank account as a non-resident director can be a significant hurdle. Due to stringent international Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations, Bulgarian banks conduct thorough due diligence on foreign-owned companies. Be prepared to provide:

• A detailed business plan outlining your company's activities.
• Information on the Ultimate Beneficial Owners (UBOs).
• Evidence of the source of funds.
• Personal identification documents for all directors and shareholders.

While some banks are beginning to offer remote account opening, many still require at least one in-person visit from the company director to finalize the process [1]. At Incorporator.io, we leverage our established relationships with multiple Bulgarian banks to streamline this procedure for our clients, guiding them through the documentation and compliance checks to ensure a successful outcome.

The Rise of FinTech and EMIs

To complement traditional banking, many international entrepreneurs use Electronic Money Institutions (EMIs) like Wise Business or Revolut for their day-to-day international transactions. These platforms often offer more competitive foreign exchange rates and lower transfer fees than traditional banks. A common and effective strategy is to maintain a local Bulgarian bank account in BGN/EUR for tax payments and local expenses, while using an EMI for managing international payments and receivables [1].

Compliance & Ongoing Requirements

Maintaining your Bulgarian company in good standing requires adherence to several annual compliance obligations. Failure to meet these deadlines can result in penalties and legal complications, so it is crucial to manage them diligently.

• Annual Financial Statements: All companies, regardless of size or activity level, must prepare and file annual financial statements with the Commercial Register. The deadline for submission is June 30th of the year following the reporting year.

• Annual Corporate Tax Return: A corporate income tax return must be filed with the National Revenue Agency (NRA) by June 30th of the following year [1]. Any corporate tax due must also be paid by this date.

• Maintaining a Registered Address: Your company must maintain a valid legal address in Bulgaria at all times. Any change of address must be promptly updated with the Commercial Register.

• Accurate Bookkeeping: Bulgarian law requires all companies to maintain accurate and up-to-date accounting records. These records must be kept in Bulgarian and in accordance with local accounting standards. We strongly recommend engaging a professional accounting firm to handle this, ensuring full compliance and avoiding potential issues with the tax authorities.

Pros and Cons

To provide a balanced perspective, it's important to weigh the advantages of incorporating in Bulgaria against the potential challenges. Here is a summary of the key pros and cons to consider.

FAQ

Q: Can a foreigner own 100% of a Bulgarian company?

A: Yes, absolutely. Bulgaria permits 100% foreign ownership of a local company. There is no requirement to have a Bulgarian citizen as a partner or shareholder, giving you complete control over your enterprise [1].

Q: Do I need to travel to Bulgaria to register my company?

A: No, you do not. The entire incorporation process can be completed remotely. By granting a Power of Attorney to a trusted local representative, such as the experts at Incorporator.io, all necessary steps can be handled on your behalf without you ever needing to leave your home country [2].

Q: How long does it take to register a company in Bulgaria?

A: Once all the necessary documents are prepared and notarized, the registration with the Commercial Register typically takes only 2-3 business days. The entire remote process, including document preparation and shipping, can usually be completed within 2-4 weeks [2].

Q: Is Bulgaria considered a tax haven?

A: No. While Bulgaria is a highly attractive low-tax jurisdiction, it is not a tax haven. It is a full member of the European Union and is fully compliant with all OECD and EU regulations regarding transparency and tax reporting. Its tax system is legitimate and recognized worldwide [1].

Q: What is the difference between an EOOD and an OOD?

A: The only difference is the number of shareholders. An EOOD is a single-member LLC, perfect for a solo founder. An OOD is a multi-member LLC, designed for two or more partners. Both offer the same liability protection and are subject to the same tax rules [2].

Q: Do I need a physical office in Bulgaria?

A: No, a physical office is not required. However, you must have a registered legal address in Bulgaria for official correspondence. A virtual office service is a cost-effective and popular solution that fulfills this legal requirement [2].

Q: How much does it really cost to start a company in Bulgaria?

A: For a remote incorporation handled by a professional agent, you can expect the total initial cost to be between €800 and €1,400. This includes all government fees, notary and translation costs, and professional service fees. Ongoing annual costs for accounting and a registered address are also very competitive [2].

Sources

[1] Bulgarian LLC, "Open Company in Bulgaria as a Foreigner (2026) | Full Guide & Setup," https://www.bulgarian.llc/company-formation-in-bulgaria-for-foreigners-2026-guide/

[2] SofiaOffices, "Open a Company in Bulgaria (2026) – Complete Registration Guide," https://sofiaoffices.com/open-company-in-bulgaria/