Company Formation & Tax in Bulgaria
The EU's lowest headline corporate tax, a nominal capital requirement and — from 2026 — the euro: the EOOD and OOD explained.
Bulgaria has combined the EU's lowest flat corporate tax with cheap, fast incorporation for years. The headline change for 2026 is monetary: on 1 January 2026 Bulgaria adopted the euro at the fixed rate of 1 EUR = 1.95583 BGN, removing currency risk for cross-border operations.
Choosing an entity
The standard vehicles are the EOOD (single-member private limited company) and the OOD (two or more members). Minimum share capital is nominal — effectively €1. Registration is filed with the Commercial Register at the Registry Agency, typically within a few working days, and tax matters are administered by the National Revenue Agency (NRA). Foreign nationals can own and direct a company with no residency requirement, and formation can be completed remotely by power of attorney; in practice, opening a bank account for a non-resident is the slowest step.
Corporate tax and VAT
| Tax | Rate |
|---|---|
| Corporate income tax | 10% |
| VAT (standard) | 20% |
| VAT (reduced) | 9% |
| VAT registration threshold | BGN 100,000 (~€51,130) |
| Dividend withholding | 5% (0% for qualifying EU parents) |
Corporate income tax is a flat 10% — the lowest headline rate in the EU — and has been stable since 2007. VAT is 20% standard with a 9% reduced rate; mandatory registration applies above BGN 100,000 (about €51,130) of turnover, and the EU-wide SME scheme allows small businesses under €100,000 of EU turnover to trade cross-border without charging VAT. Distributed profits carry a 5% dividend withholding tax, reduced to nil for qualifying EU parent companies under the Parent-Subsidiary Directive; because dividend treatment has been the subject of recent proposals, confirm the current rate at the point of distribution. The combined corporate-plus-dividend burden is roughly 14.5%, among the lowest in the Union.
Frequently asked questions
What is the corporate tax rate in Bulgaria?
A flat 10%, the lowest headline corporate tax rate in the EU, stable since 2007.
Has Bulgaria adopted the euro?
Yes — Bulgaria joined the eurozone on 1 January 2026 at the fixed rate of 1 EUR = 1.95583 BGN.
What is the Bulgarian VAT rate?
20% standard, with a 9% reduced rate; registration applies above BGN 100,000 (about €51,130) turnover.
Official sources
This guide is general information prepared by ARM Management and is current as at June 2026. It is not legal or tax advice; rules and thresholds change. Confirm against the National Revenue Agency, or with an advisor, before acting.
Set up in Bulgaria with confidence.
ARM Management advises international companies on Bulgarian entity formation, banking coordination and tax compliance, alongside wider CEE structuring. Begin with a confidential conversation.