Introduction
Bulgaria is one of the most attractive destinations for foreign investors due to its low corporate tax rate (10%), strategic EU location, and favorable business regulations. Whether you plan to start a company, invest in real estate, or expand your international business, it is essential to understand the legal and tax framework in Bulgaria.
At Legal Frame Law Office, our team of expert business lawyers in Bulgaria specializes in helping foreign investors navigate Bulgarian corporate law, taxation, and regulatory requirements. This guide provides an overview of key legal and tax considerations for foreign investors in Bulgaria.
1. Why Invest in Bulgaria?
Foreign investors choose Bulgaria for its business-friendly environment and low tax rates. Here are the top reasons to invest in Bulgaria:
✔ Low corporate tax rate – Flat 10% corporate income tax, the lowest in the EU.
✔ 5% dividend tax – Favorable for foreign shareholders.
✔ EU membership – Access to the European market and trade agreements.
✔ Affordable labor costs – Competitive salaries and skilled workforce.
✔ Stable real estate market – Attractive investment opportunities in commercial and residential properties.
If you need legal assistance in Bulgaria for setting up a business or investment, Legal Frame Law Office provides expert guidance.
2. Legal Business Structures in Bulgaria for Foreign Investors
Foreign investors can establish different types of legal entities in Bulgaria. The most common options include:
A) Limited Liability Company (OOD)
✔ Minimum capital: 2 BGN (~1 EUR).
✔ 100% foreign ownership allowed.
✔ Ideal for small and medium-sized businesses.
B) Joint-Stock Company (AD)
✔ Minimum capital: 50,000 BGN (~25,000 EUR).
✔ Suitable for large businesses and investment projects.
✔ Can issue shares and attract investors.
C) Branch of a Foreign Company
✔ Allows foreign businesses to operate in Bulgaria without forming a separate entity.
✔ Liability remains with the parent company.
D) Sole Proprietor (ET)
✔ Suitable for self-employed individuals and freelancers.
✔ Full liability of the owner for business debts.
E) Variable Capital Company (VCC) – A Flexible Business Structure for Investors
✔ No fixed minimum capital requirement – Capital can increase or decrease based on investment needs.
✔ Ideal for venture capital funds, startups, and flexible investment vehicles.
✔ Allows investors to join and exit without complicated procedures.
✔ Provides more flexibility compared to traditional limited liability and joint-stock companies.
At Legal Frame Law Office, our business lawyers in Bulgaria assist foreign investors in choosing the right legal structure and registering a company efficiently.
3. Taxation in Bulgaria: What Foreign Investors Need to Know
Bulgaria has a simple and business-friendly tax system. Here are the key tax considerations for foreign investors:
A) Corporate Tax
✔ Flat 10% corporate tax – One of the lowest in Europe.
B) VAT (Value-Added Tax)
✔ Standard VAT rate: 20%.
✔ Reduced VAT rate: 9% (for tourism-related services).
✔ Mandatory VAT registration for businesses exceeding 100,000 BGN (~50,000 EUR) in turnover.
C) Personal Income Tax
✔ Flat 10% personal income tax on salaries and capital gains.
D) Dividend Tax
✔ 5% withholding tax on dividends paid to foreign shareholders.
E) Tax Incentives for Foreign Investors
✔ Corporate tax relief for investments in high-unemployment areas.
✔ Reduced tax rates for specific industries (manufacturing, IT, etc.).
Our tax lawyers in Bulgaria at Legal Frame Law Office provide full assistance with tax planning, compliance, and VAT registration for foreign investors.
4. Real Estate Investment Considerations for Foreigners
Bulgaria offers attractive real estate investment opportunities, but foreign investors must follow specific legal regulations:
✔ Foreign individuals can buy apartments, but not land directly.
✔ Foreign companies (EU-based businesses) can own land without restrictions.
✔ Special-purpose companies (SPCs) can be used for real estate projects.
✔ Notary authentication is required for all real estate transactions.
Our real estate lawyers in Bulgaria at Legal Frame Law Office provide full due diligence, contract drafting, and property registration services.
5. Business Compliance and Regulatory Requirements in Bulgaria
To operate legally, foreign investors must comply with Bulgarian corporate regulations:
✔ Register with the Bulgarian Commercial Register.
✔ Obtain a VAT number (if applicable).
✔ Hire a licensed accountant for tax reporting.
✔ Submit annual financial statements to the tax authorities.
✔ Ensure employment contracts comply with Bulgarian labor law.
At Legal Frame Law Office, we ensure that your business in Bulgaria operates legally and meets all tax and corporate compliance requirements.
6. How Legal Frame Law Office Can Help Foreign Investors in Bulgaria
At Legal Frame Law Office, we specialize in corporate law, tax advisory, and business registration for international investors. Our services include:
✅ Company registration in Bulgaria (OOD, AD, VCC, Branch).
✅ Legal and tax due diligence for foreign investments.
✅ VAT and corporate tax compliance services.
✅ Real estate legal support for foreign buyers.
✅ Drafting contracts and shareholder agreements.
✅ Business licensing and regulatory compliance.
📩 Contact Legal Frame Law Office Today!
📞 Phone: +359876413004
📧 Email: office@legalframe.bg
🌍 Website: www.legalframe.bg
