How to become a freelancer in Bulgaria: taxation and company form

Bulgaria has become a very popular destination for freelancers to relocate and settle, not only for its beautiful cities and rich culture but mostly due to its advantageous financial environment and the many benefits freelancers can enjoy in Bulgaria.

The main fact that attracts many freelancers to Bulgaria is the income tax, lower than in other parts of Europe, and much more straightforward, with a flat rate of 10% tax on income, after deductions.

Bulgaria has therefore placed itself as an enticing destination for freelancers, attracting professionals from all over the world. 

And as such, to take advantage of all the benefits a freelancer can enjoy by registering as a self-employed worker in Bulgaria, there is no doubt your best ally will be a trustworthy and reliable accounting company, just like Accountancy Bulgaria. 

Not only their experienced professionals will be able to administrate your business’ accounting, reports, and taxes, but they are also able to advise on company registration in Bulgaria, and the best way to maximize your profits and reduce your costs, taking full advantage of being a freelancer in Bulgaria. 

Read more about Sole proprietorship in Bulgaria: Tips, Pros & Cons

Benefits of becoming a freelancer in Bulgaria

There are a variety of advantages to registering as a freelancer in Bulgaria. The first step is to become a resident, and this alone brings in responsibilities and rights that many may find beneficial, especially as an entry to Europe.

But we will concentrate mostly on the tax scheme that has been the decisive reason for many digital nomads, self-employed professionals, and freelancers to relocate to Bulgaria for their businesses.

The personal income tax for freelancer Bulgaria is a flat rate of 10%.

Freelancers in Bulgaria can automatically deduct 25% of expenses from their total income (in some cases, depending on the profession, this percentage can go up to 40%).

So, for example, if your total income is EUR 2.000 per month, 25% is deducted as expenses, leaving a total of EUR 1.500. On this basis, social security contributions are calculated, and the amount is also deducted. After the social security contributions, the final number is the tax base to which the 10% flat rate on income tax is applied.

Other benefits include avoiding the process of opening a company bank account, as a personal account is enough, and there are no minimum capital requirements to register as a freelancer Bulgaria.

How to become a freelancer in Bulgaria?

The registration process for freelancers in Bulgaria is straightforward and rather simple, taking up to a week. The first requirement is to have a residency card, so this would be the place to start.

We could go on into details about how to obtain a residency in Bulgaria, but let’s concentrate on what happens once you have it and you’re looking into starting your freelance business.

Freelancers Bulgaria need to have a self-employment permit, which is issued by the Employment Agency and needs to be renewed yearly. 

Company form for freelancers in Bulgaria

While those interested in registering a company in Bulgaria or starting an EOOD, need to register with the Commercial Register, this step is not necessary for freelancers Bulgaria, who instead need to register with their own professional body. 

Freelancers, as well as sole traders, must acquire a unique identification code (also known as EIK or BULSTAT. This is a code given by the BULSTAT Register. Additionally, freelancers are also expected to register for VAT with the National Revenue Agency, especially if you expect to earn over EUR 56.000 in the first year of operations.

• Learn more about Self Employed tax in Bulgaria: how much you pay?

Conclusion

Freelancing is today more popular than ever, and it comes with a lot of advantages, from choosing your work schedule to deciding where you may want to live, Bulgaria has set up an environment where freelancers can find success. 

Freelancers Bulgaria can enjoy an advantageous tax scheme that will help them maximize their profits and reduce their costs. 

However, in order to best take advantage of what Bulgaria has to offer freelancers, self-employed workers must consider engaging the services of a reliable accounting company that will take care of their financial needs, and taxes, leaving freelancers to dedicate their time to the growth of their business. None better than Accountancy Bulgaria, an accounting company with decades of experience, an excellent reputation and services tailored to your particular needs.