As the digital nomad lifestyle gains popularity, entrepreneurs and remote workers are seeking business-friendly destinations that offer a conducive environment for their operations. Bulgaria, situated at the crossroads of Europe and Asia, is increasingly becoming a hotspot for digital nomads due to its welcoming business climate, affordable cost of living, and a burgeoning tech scene. This article explores the process of company formation for remote businesses in Bulgaria, highlighting the benefits and opportunities it presents for entrepreneurs embracing the country’s thriving digital nomad community.
Bulgaria’s Business-Friendly Environment
Bulgaria’s pro-business policies and regulatory framework have earned it a reputation as one of Europe’s most business-friendly countries. The World Bank’s Doing Business 2021 report ranked Bulgaria 61st out of 190 economies, acknowledging its progress in enhancing the ease of doing business. For digital nomads and remote entrepreneurs, this means streamlined procedures and minimal bureaucratic hurdles when establishing a company.
Types of Business Entities
Remote entrepreneurs looking to set up a business in Bulgaria have several options for company structures, each with its unique benefits and requirements. The most common types of entities include:
1. Sole Trader: Suitable for individual freelancers or small-scale ventures, this structure offers a straightforward setup process with minimal legal obligations and tax advantages for modest income levels.
2. Limited Liability Company (LLC): This is the most popular choice for digital nomads and remote businesses. An LLC provides limited liability protection to its owners and is relatively simple to incorporate with affordable registration and maintenance costs.
Company Formation Process
The process of forming a company in Bulgaria is relatively straightforward and can be completed in just a few steps:
- Choose a Unique Company Name: The first step is selecting a unique name for the business, which must be distinguishable from other registered companies in Bulgaria;
- Determine the amount of company’s capital you are ready to invest (at least EUR 1);
- Choose the company’s address. In case you don’t have one, you can ask us for providing a business address;
- Appoint Manager(s) and Shareholder(s): Identify the company’s directors and shareholders, who can be foreign individuals or legal entities;
- VAT/VIES registration (if needed for trading with goods and services outside Bulgaria);
- Open a Bank Account: Once the company is registered, open a corporate bank account in Bulgaria to facilitate business transactions.
Bulgaria’s favorable tax regime is a significant draw for digital nomads and remote businesses. The country boasts a flat corporate income tax rate of 10%, one of the lowest in the European Union. Additionally, foreign-sourced income is exempt from taxation in Bulgaria for companies registered in the country but conducting business outside its borders. This setup presents a compelling tax optimization opportunity for entrepreneurs with international clientele.
Access to the EU Market
Bulgaria’s membership in the European Union provides digital nomad businesses with unparalleled access to the EU’s vast market of over 450 million consumers. Companies registered in Bulgaria can enjoy the benefits of the EU’s single market, including the free movement of goods, services, and capital. As the global workforce continues to embrace remote work and digital nomadism, Bulgaria emerges as an attractive destination for entrepreneurs seeking to establish a business in a business-friendly environment with tax advantages and access to the EU market.
The process of company formation in Bulgaria is straightforward, making it an appealing choice for remote businesses looking to capitalize on the country’s growing digital nomad scene. However, entrepreneurs are advised to seek professional legal and financial advice to navigate the complexities of setting up as a freelancer / self-employed or a company in a foreign country and ensure compliance with local regulations. Embracing Bulgaria’s digital nomad scene can be a transformative step for businesses, unlocking new opportunities and fostering growth in the ever-evolving global economy. If you need any further information, don’t hesitate to contact Legalla’s team (or me personally) and we will answer you within 1 business day.