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A Fresh Look at Bulgaria

0 TAX IS GONE!!!

PAYING TAXES AT A REASONABLE RATE IS OUR NEW GOAL
MID-SHORE OPTION MIGHT NOT BE THE DREAM OPTION, BUT IT IS THE BEST WE HAVE TODAY

Two street-sign plates: a red one reading Off-Shore crossed out, a blue one reading Mid-Shore ticked

WHY BULGARIA

  • Perfect Location
  • Political Stability
  • Stable country
  • Less Financial Risk
  • Tax Benefits
  • Lowest Corporate Tax in the EU
  • Lowest personal income tax in the EU
  • Lowest social security contributions in the EU
  • Low Business Costs
  • Fewer rules compared to Western Europe, so good business climate
  • Government policy focused on building favorable business climate for foreign investors.
Basic facts table for Bulgaria: population 7.4 million, area 110,879 sq km, capital Sofia, EET (Sofia time), parliamentary democracy, currency BGN fixed at 1 euro to BGN 1.95583, EU member since 2007, NATO since 2004, WTO since 1996, government deficit 2.1% of GDP, debt 26.7% of GDP, rated Baa2 stable by Moody's, BB+ stable by S&P and BBB- stable by Fitch

BULGARIAN TAX SYSTEM

Diagram: since 2007 Bulgaria has applied flat rates, with personal income tax 10%, corporate tax 10% and dividend tax 0 to 5%

TAXATION – LEGAL FRAME

  • Bulgaria applies a worldwide income tax system and residents are taxable on their worldwide income at a rate of 10%
  • Bulgarian companies are subject to a flat tax rate of 10% and the taxable profit is the annual financial result adjusted for tax purposes.
  • Tax rates could be increased only if voted by 2/3 of the parliament members
  • Since 2007
Table comparing 28 countries on corporate profit tax, personal income tax, tax due on 500,000 euros of income, and VAT. Bulgaria is highlighted at the top at 10%, 10%, 50,000 euros and 20%; the other rows run from Cyprus at 13% to Malta at 35%
Illustration of a small figure pushing a large sphere labelled Taxes up a slope

Sick and tired of paying taxes?

Become a Bulgarian tax payer!

BULGARIA TRADING COMPANY

  • The Bulgarian trading company purchases and sells goods or services
  • The goods or services are directly delivered by the supplier to the final client
  • As a result the profit is transferred into the Bulgarian company, where profit is taxed at 10%
The same flat-rates diagram again: since 2007, personal income tax 10%, corporate tax 10% and dividend tax 0 to 5%

BULGARIA CONSULTANCY COMPANY

  • The services are directly provided to the client/employer, but the Bulgarian company issues the invoices and collects the income
  • The individual owner can receive a salary from his Bulgarian company, which is taxed at 10% in Bulgaria
  • The individual owner can make personal spending from the Bulgarian company, which will be taxed at 14.5% in Bulgaria
  • The individual owner can transfer funds to third countries (non EU), which will be taxed at 14.5% in Bulgaria
Diagram of a Bulgarian consultancy company making no profit: the shareholder draws salaries taxed at 10%, personal spending taxed at 14.5% and transfers to third countries taxed at 14.5%, with the service provided directly to the client
Diagram of a holding structure: an EU subsidiary pays dividends up to a Bulgarian holding company, whose third-country shareholder is taxed 10% on salaries, 5% on personal spending and 5% on dividends

BULGARIA HOLDING COMPANY

  • The services are directly provided to the client/employer, but the Bulgarian company issues the invoices and collects the income
  • The individual owner can receive a salary from his Bulgarian company, which is taxed at 10% in Bulgaria
  • The individual owner can make personal spending from the Bulgarian company, which will be taxed at 14.5% in Bulgaria
  • The individual owner can transfer funds to third countries (non EU), which will be taxed at 14.5% in Bulgaria

10% PERSONAL INCOME TAX

FISCAL RESIDENCY – THERE IS
NOTHING TO DO WITH CITIZENSHIP

BULGARIAN ID CARD AND TAX RESIDENCY

  • Social insurance number and ID Card
  • Staying in Bulgaria – substance
  • Center of vital interest – substance
  • Personal income tax return

INVESTMENT AND BUSINESS OPPORTUNITIES IN BULGARIA

LOW BUSINESS COST

  • price of office premises class A 1,000-1,500 €/sq.m
  • price of regulated plots 15 €/sq.m
  • price of agriculture land 400 €/decare (1000 sq.m)
  • Low cost of utilities. Bulgarian cost of electricity for industrial users is 70% of the European average
Bar chart of average monthly prime Class A office rent in European capitals, euros per square metre. Sofia is lowest at 12, then Bucharest 15, Zagreb 16, Bratislava 17, Belgrade 18, Budapest 18, Lisbon 18, Istanbul 20, Athens 21, Prague 21, Berlin 21 and Warsaw 26

LOW LABOR COST

  • Average salary is lower when compared to other EU countries
  • Average salary in Bulgaria € 600/month
  • Employees:
    • highly educated
    • experienced
    • well trained
    • fluent foreign languages speakers

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