In short
- Year-1 total for the example: €8,240, of which €2,440 is fixed compliance (formation €280 + accounting €2,160) and €5,800 is tax (corporate €4,000 + dividend €1,800). Realistic range for a similar company: about €7,930 to €8,240 without owner social security, up to about €10,300 if the owner is self-insured in Bulgaria.
- Without VAT registration the same example comes to about €7,930: accounting is €1,800 instead of €2,160, so profit rises to €40,360, corporate tax to €4,036 and dividend tax to €1,816 (5% of €36,324); €280 + €1,800 + €4,036 + €1,816 = €7,932. This variant only fits a company with no business clients in other EU states. A company that supplies services to EU businesses must register under Art. 97a of the VAT Act before its first supply.
- From year 2 the fixed layer drops to €2,160 a year (€1,800 if the company is not VAT-registered).
- Effective Bulgarian tax on profit paid out as dividends: 14.5% (10% + 5% of the remainder). The owner receives €34,200 of the €40,000 profit before any tax at home.
- Owner social security is not automatic for a non-resident who works from abroad; if it applies, budget €172.42 a month at the minimum.
- Not needed: local director, resident shareholder, office, capital above €1, audit. A trip to Bulgaria is optional: the manager's specimen signature can be notarised at a Bulgarian consulate or before a notary abroad with an apostille.
The example company
A single-member limited company (EOOD) owned and managed by one person who lives outside Bulgaria and sells services to business clients in the EU and elsewhere. Revenue €60,000 in year 1. Expenses €20,000, which already include the €2,160 accounting subscription, software, contractors and travel. Taxable profit €40,000. The owner takes the whole after-tax profit as a dividend. No employees, no office lease, no company car. The company is VAT-registered under Art. 97a of the VAT Act, which is needed for services to EU businesses. Those services are taxed where the client is established (Art. 21(2)), so the company invoices them without Bulgarian VAT and the client accounts for VAT under the reverse charge. Supplies with a place of supply outside Bulgaria do not count toward the €51,130 threshold of Art. 96.
Prices below are Bulsmetka's published 2026 prices excl. VAT (see pricing). Tax rates are statutory and the same for everyone. Where a cost is set by a third party (bank, notary abroad, translator) we say so instead of guessing.
1. Formation costs (one-off)
| Item | Amount | Who sets it |
|---|---|---|
| Formation package (documents, filing, tracking) | €280 total; the firm's fee is what remains after the fees below, about €226 to €236 | Bulsmetka, fixed; company formation |
| State fee, Commercial Register, online filing | €28.12 (included in the €280) | Registry Agency tariff, Art. 16a |
| Notarisation of the manager's specimen signature | approx. €6 in Bulgaria (included) | Notary tariff |
| Capital account for depositing the share capital | approx. €10 to €20 (included) | Bank tariff |
| Share capital itself | €1 minimum; €100 in this example | Commerce Act Art. 117; stays company money, not a cost |
| Apostille and certified translation of ID or power of attorney (non-residents signing abroad) | Set by your home authority and the translator | Hague Convention; not included |
| Formation total counted in the example | €280 | excl. VAT on the firm's fee |
Timing: the Registry Agency rules on first registrations by the end of the next working day (Commercial Register Act Art. 19(3)); the UIC is normally issued in 1 to 2 business days after filing. Document list: remote EOOD setup checklist.
2. Accounting and annual closing
| Item | Monthly | Per year | Note |
|---|---|---|---|
| Accounting subscription, up to 30 documents and 2 insured persons | €150 | €1,800 | bookkeeping, payroll, annual closing, financial statements, corporate tax return, NSI report; accounting services |
| VAT-registered surcharge | +€30 | +€360 | monthly VAT return, ledgers and VIES; in this example the Art. 97a registration means monthly filings apply |
| Higher volume (31 to 60 documents) | €190 | €2,280 | not needed in the example |
| Annual closing and financial statements | €0 | €0 | included in the subscription; a dormant company pays no subscription and files a one-off no-activity declaration instead (€120 with us) |
| Publication of the annual financial statements | €0 | €0 | filing handled within the subscription; deadline 30 September (Accountancy Act Art. 38(1)) |
| Accounting total in the example | €180 | €2,160 | €150 subscription plus the €30 VAT surcharge, because the company is registered under Art. 97a; €1,800 a year without VAT registration |
3. Taxes on €40,000 profit
| Step | Calculation | Amount | Legal basis |
|---|---|---|---|
| Taxable profit | €60,000 revenue − €20,000 expenses | €40,000 | CITA Art. 18 to 22 |
| Corporate income tax | 10% × €40,000 | €4,000 | CITA Art. 20; due by 30 June 2027 (Art. 93) |
| Advance instalments during the year | none: a new company makes no advance instalments in its year of formation and the following year; from 2028 only if 2026 revenue exceeds €153,387.56 | €0 | CITA Art. 83(2), Art. 84, Art. 85 |
| Profit available for distribution | €40,000 − €4,000 | €36,000 | Commerce Act Art. 133 |
| Dividend withholding tax | 5% × €36,000 | €1,800 | PITA Art. 38(1), Art. 46(3); paid by the end of the month after the quarter of the decision (PITA Art. 65(2)) |
| Net dividend to the owner | €36,000 − €1,800 | €34,200 | before tax in the owner's country |
| Total Bulgarian tax | €4,000 + €1,800 | €5,800 = 14.5% of profit | lower treaty rate on the dividend possible with a tax residency certificate |
Check other profit levels in the dividend tax calculator. Salary versus dividend for an owner: dividend tax vs salary.
4. Owner's social security: three scenarios
Bulgarian contributions are due for work performed in Bulgaria; owning shares alone does not trigger them. Under Regulation (EC) 883/2004 an EU or EEA resident is subject to the social security law of one state at a time, normally where the work is physically done. A non-EU resident is governed by any bilateral agreement or, absent one, by each country's own rules.
| Scenario | Monthly | Per year | Basis |
|---|---|---|---|
| A. Owner lives and works abroad, is insured there, does not work in Bulgaria | €0 in Bulgaria | €0 | Regulation 883/2004 Art. 11; Social Insurance Code Art. 4(3) |
| B. Owner is self-insured in Bulgaria on the minimum income, no sickness cover | 27.8% × €620.20 = €172.42 | €2,069 (at the rate from 1 Aug 2026; €153.08 a month on €550.66 for Jan to Jul 2026) | Social Insurance Code Art. 6(8); SSIBA 2026 Art. 9 |
| C. Same as B with sickness and maternity cover | 31.3% × €620.20 = €194.12 | €2,329 | Social Insurance Code Art. 4(4) |
Contributions paid by a self-insured person are deductible from that person's own income under PITA, not a company expense, and are due by the 25th of the following month. Use the social security calculator for other income levels. Background: social security explained.
5. Year-1 total and effective burden
| Line | Base case | With scenario B |
|---|---|---|
| Formation (one-off) | €280 | €280 |
| Accounting, 12 months | €2,160 | €2,160 |
| Corporate income tax | €4,000 | €4,000 |
| Dividend tax | €1,800 | €1,800 |
| Owner social security | €0 (scenario A) | €2,069 (scenario B) |
| Year-1 total paid to the state and the accountant | €8,240 | €10,309 |
| Of which fixed compliance (not tax) | €2,440 = 4.1% of revenue | €2,440 = 4.1% of revenue |
| Effective Bulgarian tax on profit | 14.5% | 14.5% tax + 5.2% social security = 19.7% |
| Cash left to the owner from €40,000 profit | €34,200 (85.5%) | €32,131 (80.3%) after paying scenario B personally |
Note on double counting: the €2,160 accounting fee and the €280 formation fee are already inside the €20,000 expenses that produced the €40,000 profit, which is why they reduce corporate tax. The year-1 total above shows them once, as real cash out.
6. Bulgaria versus staying a freelancer at home
The useful comparison puts the Bulgarian company's total cost next to what the same €40,000 would cost you as a self-employed person where you live, after three corrections.
| Factor | Bulgarian EOOD | Freelancer in your home country |
|---|---|---|
| Tax on €40,000 profit in Bulgaria | €5,800 (14.5%) | €0 in Bulgaria; your home income tax and social contributions at your marginal rates |
| Fixed compliance | €2,440 year 1, €2,160 after | whatever your local bookkeeping and filing cost; often lower for a sole trader |
| Tax at home on the dividend | usually yes, on €36,000, with a credit for the €1,800 Bulgarian tax under the treaty | not applicable |
| Place of effective management | if you run the company entirely from home, your home tax authority may treat it as resident there; real management in Bulgaria or a Bulgarian manager avoids that | not applicable |
| Liability | limited to company assets | usually personal and unlimited |
| EU VAT number and VIES listing | yes, needed by most EU B2B clients | depends on your local registration |
Rule of thumb from these numbers: the Bulgarian company is worth it when the tax you would pay at home on €40,000 exceeds the €5,800 Bulgarian tax plus the roughly €2,200 compliance layer plus whatever home tax remains on the dividend after credit, and when you either relocate, spend real management time in Bulgaria, or accept that the saving is mainly the corporate layer, not the personal one. Below about €30,000 profit the fixed costs weigh too much and freelancer status or staying at home usually wins. Full discussion: freelance vs EOOD for non-residents.
7. Hidden and one-off costs to budget for
- ✓Registered address. Mandatory (Commerce Act Art. 12) and not included in our prices. If you have no Bulgarian address, you arrange one separately; a virtual-office provider charges an annual fee set by the provider; ask for a written quote and check that it accepts official mail from the NRA.
- ✓Qualified electronic signature (QES). Lets you sign filings and communicate with the NRA remotely. Issued by Bulgarian trust service providers for an annual fee; inexpensive relative to the accounting subscription. Not required if your accountant files under a power of attorney.
- ✓Apostille and certified translations. Foreign documents (passport copy, power of attorney, corporate documents of a foreign parent) need an apostille from the issuing country and a certified Bulgarian translation. Costs are set by your home authority and the translator, per document or page.
- ✓Bank account. The capital account is opened before registration; the operating account after. Non-resident owners face enhanced due diligence and a timeline of weeks, and some banks charge a monthly maintenance fee. An EMI account is a legitimate alternative for day-to-day payments. See corporate bank account for non-residents.
- ✓VAT registration. €80 one-off, free with a subscription. Art. 97a registration for EU services is required before the first supply; full registration is mandatory above €51,130. Details: VAT registration.
- ✓Changes later. Change of manager or address from €120; share transfer from €225; liquidation from €550 plus the mandatory 6-month creditor notice period. A dormant company files a one-off no-activity declaration with the Commercial Register (€120 with us) instead of paying a subscription, and files no corporate tax return while it stays dormant: dormant EOOD annual cost.
8. What is not needed
No local director or nominee (the foreign owner can be the manager, Commerce Act Art. 141). No resident shareholder. No share capital above €1 (Art. 117), although €50 to €500 is sensible. No office lease: a registered address is enough. No statutory audit for a company far below the size thresholds of Art. 37 of the Accountancy Act. No annual licence fee, franchise tax or capital duty. No notarised annual filings. No trip to Bulgaria is required. The one step that needs a notary is the manager's consent and specimen signature, which can be notarised at a Bulgarian consulate or before a notary abroad with an apostille; the rest is done under a power of attorney or with a QES. No separate government fee for the UIC or the VAT number; both are issued as part of the filing.
Frequently asked questions
What is the total cost of setting up a company in Bulgaria?
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At Bulsmetka the formation package is €280 one-off and covers document preparation, the €28.12 state fee for online filing and the bank capital account. Notarisation of the manager's signature in Bulgaria is included; a notary or consulate abroad, the apostille and any translation are paid by the client. Share capital can be €1.
How much does accounting cost for a small Bulgarian company?
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From €150 a month excl. VAT for up to 30 documents and 2 insured persons, including annual closing and the corporate tax return. A VAT-registered company pays €30 a month more. A dormant company needs no subscription, only the one-off no-activity declaration (€120).
What is the effective tax rate on profit taken out as dividends?
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14.5% in Bulgaria: 10% corporate income tax on profit, then 5% dividend withholding on the remaining 90%. On €40,000 profit that is €4,000 plus €1,800, leaving €34,200 for the owner before any tax in the owner's country of residence.
Do I have to pay Bulgarian social security as a non-resident owner?
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Not automatically. Contributions are due for a person who performs work in Bulgaria as a self-insured owner-manager, at 27.8% of at least €620.20 a month (€172.42). An EU resident who works from home is insured in one member state only under Regulation 883/2004, normally the one where the work is physically done. Confirm your case before budgeting for it.
Which costs are not needed for a Bulgarian company?
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No local director, no resident shareholder, no minimum capital above €1, no office lease (a registered address is enough), no statutory audit for a small company, no annual licence or franchise tax, no trip to Bulgaria if the manager's specimen signature is notarised at a Bulgarian consulate or before a notary abroad with an apostille, and no separate fee to obtain the UIC or the VAT number beyond the filing work.
Is it cheaper to stay a freelancer in my home country instead?
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Sometimes. A VAT-registered Bulgarian EOOD costs about €2,440 in year 1 and €2,160 a year afterwards in fixed compliance (€2,080 and €1,800 without VAT registration), before its 14.5% combined tax. It pays off when your home marginal rate on the same profit is clearly higher and you can show real management from Bulgaria or accept that your home country may tax the dividend with a credit for the Bulgarian 5%.
Sources
- Corporate Income Tax Act, Art. 18 to 22, 83, 92, 93
- Personal Income Tax Act, Art. 4, 38, 46, 65
- VAT Act, Art. 21, 96, 97a, 100
- Commerce Act, Art. 12, 117, 133, 141; Accountancy Act, Art. 37, 38
- Registry Agency tariff of state fees, Art. 16a
- Social Insurance Code, Art. 4, 6; State Social Insurance Budget Act 2026, Art. 9; noi.bg
- Regulation (EC) No 883/2004, Art. 11
- nra.bg; Bulsmetka price list 2026
Verified on 23 September 2026.
Important
Bulsmetka is a private accounting firm, not a government body. The information is general in nature and does not replace individual advice. The example is illustrative; your revenue mix, VAT status, residence and treaty position change the result. Tax in your country of residence is outside the scope of this page. For company registration, state fees are included in the price.