Bulgaria applies a corporate income tax (CIT) of 10%, a flat rate with no progressive brackets, then between 0 and 5% on dividends (0% to an EU/EEA parent company, with no threshold or holding period; 5% paid to an individual) — so around 10 to 14.5% once profits are distributed, depending on the dividend rate.
It is one of the overall tax burdens among the lowest in the European Union: Hungary advertises a lower headline corporate tax (9%), but its taxation exceeds 20% once dividends are added.
The CIT is levied on the taxable profit, after deducting real expenses. For a profit of €100,000, the CIT comes to €10,000, against around €20,750 in France.
It is this combination of 10% + low dividends that makes the Bulgarian company a benchmark structure for online entrepreneurs. For a 100% remote formation, with no capital deposit or prior bank account, the DPK/EDPK is often the simplest choice; the EOOD/OOD remains the classic form (see EOOD, OOD or DPK).
But the structure also has to be genuinely operable remotely, because a low rate is worthless on a company you cannot bring to life.
How does the 10% corporate income tax work in Bulgaria?
Bulgarian corporate income tax rests on mechanics of a rare simplicity in Europe: a flat rate of 10% on taxable profit, with no bracket, no progressive threshold, no surcharge. Whether your Bulgarian company (DPK/EDPK, or EOOD) generates €20,000 or €500,000 of profit, every euro of result is taxed at the same rate.
This 10% rate does not depend on the form chosen: a DPK/EDPK is taxed exactly like an EOOD/OOD, at the same flat rate on taxable profit. Choosing the DPK/EDPK — often the simplest path, with no capital deposit or prior bank account — therefore changes nothing in your taxation: you keep an overall burden among the lowest in the EU.
And once dividends are taken into account (only between 0 and 5%, so around 10 to 14.5% in total depending on the dividend rate), Bulgaria offers an overall tax burden among the lowest in the EU on the income actually distributed: Hungary may advertise a 9% headline corporate tax, but its taxation exceeds 20% once dividends are added. This is the foremost reason why so many online entrepreneurs base their business there.
This stability is also an argument for predictability. The rate has not moved since it was introduced and depends neither on the company form (EOOD, OOD), nor on turnover, nor on the sector. From the very first euro of margin, you know exactly what the Bulgarian state will take. Legal basis: чл. 20 ЗКПО (the flat 10% corporate income tax rate — statute text, lex.bg).
Hungary advertises a 9% headline corporate tax, the lowest in the EU — but that rate is only defensible with genuine substance in Hungary: a director with effective powers who decides on the ground, premises, local minutes. Registration alone is enough to obtain the rate, never to defend it.
The test that matters is the place of effective management: if the director decides from France, the French tax authorities can attach the company to France (corporate tax up to 25% on worldwide profit, penalties, a 10-year reassessment window). The same substance test applies to Bulgaria — except that the Fenchell offer precisely creates that substance (local agent, office, point of contact).
For just 1 point of difference (9% HU vs 10% BG), with Hungarian VAT at 27% against 20% in Bulgaria and the same substance requirement, leaving a well-structured Bulgarian company rarely makes sense. Depending on your situation, get advice before deciding.
On what base?
The 10% rate does not apply to turnover, but to the tax result: the accounting profit adjusted for non-deductible expenses. In other words, as in France, you first deduct the real costs of your business before calculating the tax:
- purchases of goods, stock, platform fees (Amazon, Shopify, marketplaces);
- contractors, subcontractors, advertising, software and subscriptions;
- salaries and contributions, where applicable;
- overhead costs: registered address and local agent from €29/month excl. VAT, bookkeeping from €179/month excl. VAT.
Note for 2026: the conversion of share capital from BGN into euros, tied to the adoption of the single currency, is not a taxable event. It is a simple mathematical conversion at the fixed rate — it creates no taxable income and remains neutral for CIT purposes.
Bulgaria or France: where is corporate income tax lowest?
The most telling comparison remains the one with France, where most of our clients are tax-attached before they restructure. Two levels of taxation stack up in both countries: the tax on the company's profit, then the taxation of the distribution to the director.
| Step | Bulgaria (EOOD) | France (SARL/SASU) |
|---|---|---|
| Tax on profit | 10% (flat rate) | 15% up to €42,500, then 25% |
| Taxation of dividends | 5% (0% to an EU/EEA parent company, no threshold or holding period) | 31.4% (flat tax / PFU) |
| Capital gain on the sale of shares | 10% / 0%* | 31.4% (PFU) |
| CFE-type levy | €0 | up to ≈ €600/year |
| Progressivity | None | Yes, by bracket |
| Predictability | High | Variable by scale |
* Capital gain on the sale of shares: 10% under domestic law (unlisted shares); 0% in Bulgaria for a non-resident seller, but taxable in your country of residence. The three cases are detailed in the dedicated box.
The gap does not come down to the CIT rate alone. It is the cumulative effect of the 10% on profit and of dividends between 0 and 5% (0% to an EU/EEA parent company, with no threshold or holding period; 5% paid to an individual) that widens the difference in the net income actually available. For an overview including other jurisdictions, see our comparison Bulgaria vs Estonia vs Dubai vs France.
But the table that really counts is not the CIT one. A rate comparator looks at just one line — the 10%; bringing the company to life calls for twelve others. This low tax is only worth something if the company is genuinely operable remotely: a generic incorporation covers only the incorporation, whereas the Eurotrade pack covers the whole system needed to run a Bulgarian company 100% remotely.
| What it takes to operate remotely | Generic incorporation | Eurotrade pack |
|---|---|---|
| Incorporation alone | ||
| Registered company + EIK | ||
| The system that makes the company operable remotely | ||
| File of 20+ bilingual documents (articles of association, notarised powers of attorney, FID, QES key, translated certificate) | ||
| Local agent on the ground (obtaining FID + QES key, tax/customs representation) | ||
| Real offices & registered address in Plovdiv | ||
| Bulgarian mobile line + live SMS OTP/2FA | ||
| Registered official point of contact (AML/MAMLA) | ||
| Mail collection and scanning | ||
| Help assembling the account-opening file (bank + marketplaces), remotely | ||
| Dedicated static IP | ||
| Bookkeeping + EU/UK VAT + EORI (generic: add-on billed separately) | ||
A generic incorporation stops at the first line; the Eurotrade pack ticks every box — verifiable, line by line.
How much do you save with the Bulgarian CIT? Worked examples
Take a concrete case: an e-commerce seller or an online consultant generating €100,000 of taxable profit over the financial year, which they want to distribute entirely as dividends.
| On €100,000 of profit | Bulgaria (EOOD) | France |
|---|---|---|
| Corporate income tax | €10,000 (10%) | ≈ €20,750 (15%/25%) |
| Result after CIT | €90,000 | ≈ €79,250 |
| Taxation of dividends | €4,500 (5%) | ≈ €24,900 (31.4%) |
| Net after distribution | ≈ €85,500 | ≈ €54,400 |
On this single example, the gap is in the region of €31,000 net in favour of the Bulgarian structure.
What is solid here is not so much the absolute amount — which depends on a given profit — as the relative gap, which is structural: over the same activity cycle, the expatriate entrepreneur keeps on the order of +63% more net, whereas France takes about 3.1 times more tax.
As profit climbs, the absolute gap widens further still, since France switches to the 25% rate above €42,500 of profit while Bulgaria stays fixed at 10%.
The sale of shares deserves a careful reading, because the "0%" often advertised does not apply flatly. Three cases stand apart:
- Listed securities on a regulated EU/EEA market (or equivalent): 0%, under Bulgarian domestic law (чл. 13, ал. 1, т. 3 ЗДДФЛ; чл. 44 + 196 ЗКПО). This is the only case of "0% in total" resting on Bulgarian law alone.
- Unlisted shares (дялове of an OOD/EOOD/DPK), actual capital gain: 10% under Bulgarian domestic law (чл. 33, чл. 48, ал. 1 ЗДДФЛ).
- Non-resident seller of a Bulgarian company that is not property-rich: 0% in Bulgaria by virtue of the tax treaty (OECD Model, Art. 13 §5; чл. 75 ЗДДФЛ, the treaty prevails) — but the capital gain is taxable in your country of residence. A French tax resident, for example, pays around 31.4% there in any event.
The golden rule: "0% in Bulgaria" is not "0% in total". The global 0% applies only to securities listed on a regulated EU/EEA market, or if you are tax-resident in a state with no capital gains tax. Conditions to check: the company is not property-rich, there is no contrary substantial-participation clause, and the ДОПК procedure (Art. 135–142) on the Bulgarian side.
General information; each tax treaty must be checked individually, treaty by treaty, according to your residence and your situation.
A company that pays almost no tax but that you cannot genuinely run remotely is of no use. A generic incorporation — wherever it is set up — fills in the single line of the commercial register, then leaves you alone with a shell that no bank will open and no marketplace will validate.
The Fenchell offer, by contrast, is an integrated, inseparable system: each file contains more than 20 bilingual Bulgarian/English documents — more than 30 for multi-shareholder companies, notably including:
- the articles of association;
- the official registration certificate and its sworn translation;
- the 8 notarised powers of attorney;
- the FID, the QES key (qualified electronic signature), and many more.
All these documents are designed from the outset for remote management by our legal team admitted to the Plovdiv Bar, embodying years of experience and thousands of real client cases. Operability is not bolted on afterwards: it is built into the file itself.
This is what Fenchell brings together in a single offer — and it is this infrastructure that creates the genuine economic substance, the kind that makes the 10% rate both workable and defensible.
What is left to pay on dividends after CIT?
Once the profit is taxed at company level, its distribution triggers a 5% withholding when the recipient is an individual — a rate maintained for the whole of 2026 (the increase to 10% appeared in the draft budget but was not adopted: the 2025 rate is rolled over). It is this second tier that determines your real net income. Legal basis: чл. 38, ал. 1, т. 2 and чл. 46, ал. 3 ЗДДФЛ (individual); 0% to an EU/EEA parent company, чл. 194, ал. 3, т. 3 ЗКПО (statute text, lex.bg).
Two points deserve attention. First, the Bulgarian parent-subsidiary exemption allows dividends to be passed up exempt (0%) to a holding company that is tax-resident in the EU or EEA — a useful lever for reinvestment.
And Bulgarian law is here more favourable than the European minimum: the exemption from withholding tax on dividends paid to a parent company has neither a participation threshold nor a holding period.
The only condition is that the recipient be a legal entity that is tax-resident in the EU/EEA (excluding hidden profit distributions). The famous "10% of capital for 2 years" are the minimums of Directive 2011/96/EU, which Bulgaria did not adopt as conditions.
Legal basis: чл. 194, ал. 3, т. 3 ЗКПО → 0% (statute text, lex.bg).
Next, the final treatment depends on your country of tax residence and the applicable double tax treaties: the Bulgarian 5% withholding is generally credited, but your personal taxation depends on your situation. The full mechanism is detailed in our dedicated guide to dividends in Bulgaria.
Enjoy a tax burden among the lowest in the EU — on a genuinely operable company
The Eurotrade pack is an integrated system, designed as a single whole for 100% remote management, from €890 excl. VAT. Everything is built together to create the substance that makes your taxation defensible — you invoice at 10% CIT from your very first financial year.
Why is genuine economic substance indispensable?
The 10% rate is open to any Bulgarian company, but its robustness rests on a non-negotiable condition: economic substance. For the arrangement to be defensible before your country's authorities — and bankable at KYC — your Bulgarian company (DPK/EDPK, or EOOD) must have a genuine presence:
- a physical office and registered address in Plovdiv;
- a local agent who handles the formalities on the ground on your behalf;
- a Bulgarian (company) mobile line;
- a registered point of contact (POC, AML/MAMLA compliance);
- bookkeeping kept on the ground.
To this are added the building blocks that make it genuinely manageable from afar:
- a dedicated web interface to read your SMS (OTP / 2FA codes) live from any device;
- call forwarding;
- mail collection and scanning;
- a dedicated static IP;
- help assembling bank and fintech account-opening files, remotely — the client remains the applicant and the holder.
This is precisely the difference between an active company and an indefensible "letterbox". A generic incorporation, wherever it is set up, anticipates none of this: it delivers a registration, not a workable tool.
The Fenchell offer, by contrast, is designed as a single piece — the file contains more than 20 bilingual documents (more than 30 for multi-shareholder companies), including the 8 notarised powers of attorney, the QES key, the FID, the translated certificate, and many more, not to mention the local agent and the point of contact: each item embodies years of experience and thousands of real client cases to build this substance from the outset.
With Fenchell being a genuine firm established in Plovdiv since 2018 (our team and our network of dedicated partners — lawyers, accountants, marketplace account managers — that is 10 to 20 people mobilised depending on the complexity of your file, nearly 1,000 companies formed), your structure is backed by a tangible infrastructure. To go deeper, see economic substance: avoiding the letterbox company.
The real risk for a director who stays in France: the place of effective management
Beyond banking, there is a precise tax risk, and it is the point on which a French — or Belgian, or Swiss — tax resident must be clear-eyed before starting. The test that decides where a company is attached is not its country of registration, but its place of effective management: the place from which management decisions are actually taken.
If you run everything from your living room in France, the French tax authorities can consider that the company is, in reality, managed from France and attach it to the French tax office — with corporate tax of up to ≈ 25% on worldwide profit, penalties and a retroactive reassessment in store. The low Bulgarian rate then no longer holds.
It is not the 10% rate that is attacked, it is the place of management. A Bulgarian company run 100% from France, with no genuine presence on the ground, is precisely the profile the authorities can re-characterise. This is a serious subject, not a detail: it is handled upstream, not after an audit.
The remedy is no secret, and it is entirely legal. The tax specialists at the law firm Valoris Avocats, with whom we work, sum it up in four concrete conditions to bring together:
A genuine office on the ground in Bulgaria — an operational registered address, not a mere letterbox.
Clients beyond your single home country. Selling on Amazon EU naturally ticks this box: your buyers are Italian, German, Spanish, and so on.
Regular trips to Bulgaria — 2 to 3 times a year, plane tickets kept. No minimum number of days: it is regularity that counts, not a quota. A Paris–Sofia round trip costs in the region of €50.
Declare the company and its bank account on your personal tax return, in full transparency.
This is where the first of these four conditions meets what Fenchell concretely provides. The genuine office and local presence are not an option to improvise: offices and registered address in Plovdiv, a local agent who acts on the ground, a Bulgarian mobile line and a registered point of contact — this is exactly the substance that makes this framework defensible before the authorities.
The detail of this genuine presence is developed in our guide economic substance: avoiding the letterbox company.
FAQ
What is the corporate income tax rate in Bulgaria?
On what base does the Bulgarian CIT apply?
How much is left to pay after CIT, on dividends?
Is the 10% CIT really more advantageous than France?
Do you need a genuine presence in Bulgaria to benefit from the 10% rate?
General information current as of 8 June 2026, not constituting personalised tax, legal or accounting advice. Rates, thresholds, deadlines and amounts are indicative, liable to change and vary according to your situation, in particular your country of tax residence; check the rate and thresholds applicable to your case. Fenchell Capital OOD — Bulgarian firm based in Plovdiv (EIK 207945095).