7 Reasons to Relocate a Business to Bulgaria

Bulgaria is rapidly becoming a preferred destination for many entrepreneurs seeking a cost-effective and strategic solution for their businesses. This country offers numerous advantages, both fiscal and operational, making it an ideal choice for those looking to start or relocate a company.

Here are seven key reasons why start a company in Bulgaria might be the winning choice.

1. Competitive Tax Rate

Bulgaria boasts the lowest corporate tax rate in the European Union: only 10%. This means you can maximize your profits while significantly reducing tax liabilities, allowing for greater reinvestment in your business or an increase in your earnings. Additionally, the dividend tax is just 5%, with no further social security contributions. This fiscal environment creates a highly favorable setting for business growth and attracts international investors seeking better conditions compared to other EU countries.

2. Favorable Social Security Contribution Caps

The Bulgarian social security system is particularly advantageous due to a ceiling on contributions. Contributions are calculated on a maximum salary of approximately €600, making the system highly cost-effective for those with higher incomes. In practice, if your earnings exceed this threshold, you will still pay contributions based on the capped amount, enabling significant savings compared to countries with more burdensome systems. This translates to better predictability and control over labor costs, making Bulgaria an ideal location for optimizing business expenses.

Read also: How to start a Sole Proprietorship (ET) in Bulgaria

3. Simple and Fast Company Registration

Starting a business in Bulgaria is surprisingly straightforward, thanks to a quick and hassle-free company registration process. The procedure is clear and well-structured, allowing registration to be completed within a few working days. This is a significant advantage for international entrepreneurs who want to avoid the legal and administrative complications often encountered in other European countries. Furthermore, Bulgarian institutions are generally cooperative and helpful, making the process even smoother and enabling entrepreneurs to focus immediately on developing their business.

4. Reduced Operating Costs

Compared to other EU countries, business operating costs in Bulgaria are much lower. Office rent, professional services like accounting and legal consulting, and utilities are all significantly more affordable. This greatly reduces operational expenses, leaving more room for investment in strategic areas such as marketing or business expansion. This is particularly appealing to remote business operators or those seeking to optimize operating expenses, as well as those who wish to open a physical office without incurring excessive costs. Additionally, the lower cost of living compared to other European countries is another advantage for attracting talent and collaborators.

Read also: How to set up an LLC in Bulgaria

5. Advantages of EU Membership

As a member of the EU, Bulgaria offers access to the European single market, facilitating trade and international operations. This means you can easily export goods and services to other member states without facing trade barriers. Additionally, transactions between EU member states can benefit from a 0% VAT rate on services, a significant advantage for companies with clients in various European countries. Bulgaria also benefits from EU regulations on investment protection, providing added security for entrepreneurs. These advantages are particularly important for businesses operating in sectors with a strong international presence and aiming to maintain high competitiveness.

6. Access to Skilled Talent

Bulgaria has a highly skilled workforce, especially in the technology and engineering sectors, at very competitive costs. This is a significant advantage for companies seeking to outsource functions or operate locally with specialized resources. The Bulgarian education system produces a substantial number of graduates in technical disciplines each year, ensuring a large talent pool. Additionally, many young Bulgarian professionals speak fluent English and other foreign languages, facilitating communication and integration into international teams. The availability of low-cost talent is an extraordinary opportunity for startups and tech companies looking to expand without incurring the high labor costs typical of other markets.

7. Access to EU Funding Opportunities

Businesses registered in Bulgaria can access various European Union funds and development programs to support growth and expansion. These funds can be used for innovation, research and development, infrastructure, and more. This is an important incentive for those looking to invest in long-term projects with EU support, reducing financial risk and enhancing project sustainability. Additionally, the Bulgarian government often collaborates with the EU to offer additional incentives and benefits to businesses, creating a highly favorable environment for entrepreneurial development and international expansion.

Conclusion

Relocating your business to Bulgaria can be a strategic choice to save costs, access new opportunities, and benefit from favorable fiscal conditions. The combination of low tax pressure, reduced operating costs, access to skilled talent, and funding opportunities makes Bulgaria an excellent destination for those looking to expand their business in a competitive environment.

However, it is essential to understand the workings of Bulgaria’s business system and national regulations. For this reason, relying on a company advisor in Bulgaria, such as Accountancy Bulgaria, can be highly beneficial to quickly adapt to Bulgarian regulations and ensure the growth of your business.