FAQ - Frequently Asked Questions

1. Why should I start a business in Bulgaria?

Bulgaria offers low corporate taxes (10%), low labor costs, EU membership and a business-friendly environment - ideal for founders. Since 2025 Bulgaria is also a full Schengen member, and since 1 January 2026 the euro is the official currency – two big advantages for anyone working between Western Europe and Bulgaria.

2. What types of companies are most common in Bulgaria?

The most common form is the OOD (similar to the German GmbH or a private limited company). For individuals, the EOOD (single-member limited liability company) is most common. Both are quick and inexpensive to set up – since the euro changeover the legal minimum capital is just €1. You can find an overview of all legal forms in our article on Bulgarian company types.

3. Do I have to live in Bulgaria to start a company?

For the formation itself: no. You need neither residence nor a permit in Bulgaria, and many founders start from abroad.

But important for your tax planning: if you continue to live in Germany (or another high-tax country) and effectively run the company from there, the tax office may consider the company's "place of management" to be in your home country – meaning the Bulgarian company can become taxable there. Controlled-foreign-company (CFC) rules and the double taxation treaty between your home country and Bulgaria also play a role. Getting the full tax benefit usually requires real substance in Bulgaria – such as relocating or genuine local business activity. Make sure you get advice from a tax advisor with international experience – we are happy to connect you. To work out whether Bulgaria is the right choice for your situation in the first place, go through our decision matrix before you incorporate.

4. How long does it take to set up a company?

Company registration commonly takes around 2-3 weeks once all required documents are complete – that covers the notary appointment and the entry in the commercial register.

Opening the business bank account is a separate process and it is not inside that window. Timing and approval are decided by the bank, based on its compliance review, your ownership structure, the documents it asks for and whether it wants to meet you in person. It can finish earlier or later. We coordinate both processes, and the full breakdown of scope, costs and timelines is on our company formation page.

5. What taxes will I pay with a Bulgarian company?

Corporate income tax is a flat 10%. Profit distributions (dividends) are subject to an additional 5% withholding tax. Personal income is taxed at a flat 10%. For a detailed overview see our article on Bulgarian taxes. Where the profits are ultimately taxed depends on your residency – see question 3.

6. What changed with the euro adoption in 2026?

Since 1 January 2026 the euro is Bulgaria's official currency (fixed rate: €1 = 1.95583 leva). For you this means no more currency risk or conversion between the eurozone and Bulgaria. The share capital of new companies is stated directly in euro; for existing companies the registered capital was converted automatically – and the articles of association with the converted amounts must be filed with the commercial register by the end of 2026. We are happy to help with this.

7. What running costs should I expect after formation?

Mainly monthly accounting (mandatory for limited companies; the price depends on transaction volume and whether you are VAT-registered), the annual financial statements, and – if needed – a registered business address or virtual office and bank fees. We share our partners' terms transparently up front, so there are no surprises.

8. What about social security and health insurance?

This depends on where you live and work. Within the EU, coordination rules apply: you are generally insured in one country only. If you move to Bulgaria and work there as managing director, you pay the – comparatively moderate – Bulgarian contributions. If you keep living in Germany, you usually remain insured there. Again: have your individual case checked.

9. Do you offer accounting and tax support?

Yes – through our accounting partner. Ongoing bookkeeping, VAT and the annual close are delivered by SmartTaxBG under its own agreement with you, and we connect the two during the formation. What that covers in practice is on our accounting and VAT page.

Start in BG itself is not a tax practice and not a law firm. A binding tax assessment – on residence, place of effective management or a cross-border setup – needs a tax adviser experienced in international matters. Where a question belongs there, we say so rather than presenting it as part of the formation service – and we are happy to make the introduction.

10. What documents do I need to start a company?

A valid ID card or passport, a description of your business purpose, and the company name. A company address is helpful but if you have none, we assist you in this step. For the company formation we guide you through every step. You can even prepare the standard formation documents yourself with our free document generator.

7. What taxes will my business pay in Bulgaria?

Bulgaria has one of the most attractive tax systems in the EU: a flat 10% corporate income tax on profits, a 10% flat personal income tax, and only 5% withholding tax on dividends. Distributing profits therefore results in a total tax burden of just around 15%. The standard VAT rate is 20%, with a reduced 9% rate for hotel stays, restaurants, books, and certain goods.

8. When do I have to register for VAT in Bulgaria?

VAT registration becomes mandatory once your annual turnover exceeds 100,000 BGN (approx. 51,000 EUR). Below that threshold, registration is generally voluntary. Businesses entitled to deduct VAT can offset the VAT they pay against the VAT they collect and may even request a refund.

9. Is there an inheritance tax in Bulgaria?

For close family there is effectively none: spouses, parents, and children pay no inheritance tax, even on large estates. Siblings, nieces, and nephews pay only 0.4%–0.8%, and more distant relatives or third parties 3.3%–6.6% – and only on amounts above 250,000 BGN. The rates are set by the municipality.

10. How much share capital do I need for an OOD or EOOD?

Very little. The minimum share capital for an OOD (multi-member) or EOOD (single-member) limited liability company is just BGN 2 (about EUR 1). This makes the (E)OOD by far the most popular legal form for small and medium-sized businesses, as it combines limited liability with an easy, low-cost setup. A stock corporation (AD), by contrast, requires 50,000 BGN (approx. 25,000 EUR).

11. Can I work as a freelancer instead of forming a company?

Yes. Individuals carrying out an independent, non-commercial activity – for example craftsmen, coaches, or graphic designers – can register with the BULSTAT register instead of forming a company. There is no minimum capital requirement, the start-up barriers are low, and taxation is straightforward. Registration should be completed within one week of starting the activity, ideally with proof of your qualifications.

12. I live in Germany (or another EU country) – will I be taxed twice?

No – that is exactly what a double taxation agreement (DTA) prevents. Germany and Bulgaria have a DTA (in force since 2010, updated by a protocol effective December 2023) that determines which country may tax which type of income. How your Bulgarian company's profits are treated abroad depends on how they flow to you (salary, dividends, etc.), so individual tax advice is strongly recommended.

13. Where are Bulgarian companies officially registered?

Through the Registry Agency's online portal (portal.registryagency.bg), the digital hub for the Commercial Register, the register of non-profit legal entities, the property register, and the register of pledges. It handles company formation, the filing of annual financial statements, public company searches, and the ordering of official certificates. The portal is available in Bulgarian and English.

14. Do I need to speak Bulgarian?

In Sofia and other larger cities you can get by well with English. For authorities, contracts, and rural areas, basic Bulgarian (and the Cyrillic alphabet) is helpful. For official documents we recommend working with sworn translators and keeping important papers bilingual.

15. Which city is the best place to start?

For most newcomers, Sofia is the ideal starting point: an international community, plenty of jobs and coworking spaces, good medical care, proximity to the airport, and a wide choice of apartments. Coastal cities like Varna and Burgas offer the sea, Plovdiv is known for its culture, and Bansko for its digital-nomad scene.

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Still have questions?

Feel free to contact us via our Contact page or by email at info@startinbg.com!