Services in Bulgaria
Car brokerage for private and business vehicles for companies
Taxation - Accounting Support
Legal Support - Notarial Operations
Physical location - Logistics services - Transport
Customs formalities - Customs clearance
Market Research for Companies and Products
Real estate brokerage
Transfers of vehicles
Subsidized EU programs
Funded Programs - Loans
10% Corporate income tax: 10% (flat-rate)
Bulgaria avoids double taxation thanks to Double Taxation Treaties with 69 countries all over the world
Personal tax: 10% (flat tax)
5% tax on dividends
There are excise duties on alcohol, tobacco products, luxury automobiles, electricity, and petrol.
Municipal councils, in the framework of law, decide on the exact amount of the local taxes:
– Municipal tax on the immovable property from 0.5% to 2%
– Local tax for transfer of property from 1,3% to 2,6%
What are the most common types of Bulgarian company formation?
A limited liability company – either sole-owned (EOOD) or with multiple shareholders (OOD)
A joint-stock company – either sole-owned (EAD) or with multiple shareholders (AD)
What other requirements are there for an EOOD / OOD?
There needs to be at least one director, who is allowed to represent the company in front of all authorities; there is no requirement for the director/s to be resident in Bulgaria.
Monthly VAT returns should be filed if the turnover exceeds €25,000 or in case of voluntary VAT registration
The company should have a bank account and local address for efficient communication with the authorities
How much share capital is needed for a joint-stock company (EAD / AD)?
The minimum share capital BGN 50,000 (approx. €25,000), of which at least 25% or €6,250 must be initially paid up, the remainder to be paid up within 2 years of incorporation.
What are the other features of an EAD / AD?
The company should have at least three Board members
Shares can be easily transferred by endorsement to a new shareholder/s
An annual audit is required for all joint-stock companies
98%of companies established online
According to the Commercial Code, there are five forms of business entities:
corporate income tax
0%tax on retained and reinvested profits
There is no corporate income tax on retained and reinvested profits.
This means that Estonian resident companies and the permanent establishments of foreign entities (including branches) are subject to 0% income tax in respect to all reinvested and retained profits and a 20% income tax only in respect to all distributed profits (both actual and deemed).
Distributed profits include:
corporate profits distributed in the tax period
gifts, donations and representation expenses
expenses and payments not related to business
transfer of the assets of the permanent establishment to its head office or to other companies
Starting from January 1, 2018 – the corporate income tax rate on regular profit distributions was lowered from 20% to 14%, but only in cases where dividends are paid to legal persons.
Fringe benefits are taxable at the level of the employer. The employer pays income tax and social tax on fringe benefits.
14-20 %tax on distributed profits
Dividends paid to non-residents are no longer subject to withholding tax, irrespective of participation in the share capital of the distributing Estonian company. However, various withholding taxes may still apply to other payments to non-residents if they do not have a permanent establishment in Estonia or unless the tax treaties otherwise provide.
As of 2019, the tax period for corporate entities is a month, income tax must be returned and paid monthly by the 10th day of the following month.
value added tax (vat)
Standard VAT rate20%
The standard rate of VAT (value-added tax; käibemaks in Estonian) is 20%; the reduced rate is 9% and 0% in some cases.
VAT is charged on the supply of goods and services in the course of business activities and the self-supply of goods and services. A taxable person is an individual engaged in business and registered as a taxable person. The threshold for obligatory registration is 40,000 EUR. The threshold for a taxable person with limited liability in the case of the acquisition of goods is 10,000 EUR. There is no threshold in the case of the acquisition of services.
The taxable period is one calendar month, and VAT returns must be submitted to the tax authority by the 20th day of the month following the taxable period.
Services in Estonia
When starting a new business, one of the first decisions to be made is deciding which legal structure your company should take. You have 4 basic entity choices:
2. C Corporation
3. S Corporation (U.S Residents ONLY)
One of the unique features of incorporating or forming an LLC is that you do not necessarily have to form the company in the State where you do business. When deciding on which State to incorporate in, there are basically 2 choices:
Your Home State
Delaware, Nevada or Wyoming
For Non US Residents, we highly recommend Delaware or Wyoming depending on your needs. Read about those in the corresponding sections below.