Major Advantages Of Setting Up A Company In Bulgaria

Any foreigner can register a company in Bulgaria on equal terms with Bulgarian citizens.

Moreover, there are no differences in the regime and taxation is the same as that of a company owned by Bulgarian citizens.

Since Bulgaria joined the EU in 2007 the country introduced a flat 10% corporate tax rate which is currently the lowest tax within the Union.

The remainder of the profit remains at hand of the owner of the capital and can be used at their own discretion as they see best.

Further advantage resulting from Bulgaria’s joining the EU is the fact that all import – export from and to the EU is duty free.

That means that only excise duty and Value Added Tax (VAT) could be applied. Excise duty, however, is applicable only on some luxury goods or goods which are considered injurious to health. VAT is always due at source which means if VAT has been duly paid in one EU country, where the commodity has been produced, it will not be due for the import of this commodity in another country member of the EU.

Setting up a Bulgarian company is the legal loophole of avoiding the law restrictions for foreign individuals to buy land in Bulgaria. Foreign individuals are not allowed to acquire and posses land in Bulgaria but the interdict does not apply to companies registered in Bulgaria.

In fact any foreign citizen can register a company and then buy land (with or without building structures on it) in the name of the company. If the foreign citizen in question is a sole owner of the capital of the company, that means in fact that he/she is the sole owner of the land as well.

Another huge advantage is the low foundation capital required for the registration of a limited liability company. It is only 2 BGN for the registration of a limited partnership or single member limited liability company. Thus anyone who wishes to register a company with the purpose of doing business or just with the purpose of buying land can do it for the symbolic 1 euro company capital.

 

Companies which have been registered under the Valued Added Tax Act benefit from one further advantage. They have the option of deducting tax credit. Practically that means that the price of all commodities bought by a VAT registered company is 20% lower! The VAT rate is 20 % for whatever items including real properties. Companies pay the Vat due to the state but then it is returned to them within a couple of months. For example if the purchase price of a real property is EUR 120 000, that means that the net price is EUR 100 000 and the rest amounting to EUR 20000 is the VAT due. Initially the company pays the whole amount of 120 000 euro at the purchase but in a couple of months the EUR 20 000 is reimbursed to the company .

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