Incorporating a SaaS Startup in Bulgaria: Founder's Guide

The SaaS founder's calculus

For a bootstrapped or lightly-funded SaaS company, jurisdiction choice is mostly about three things: tax on retained and distributed profit, engineering cost, and acquirer-friendliness at exit. Bulgaria scores well on all three in 2026.

Choose the right entity

• EOOD — single-founder SaaS, simplest start
• OOD — co-founders; cap table managed via articles of association
• AD (joint-stock) — if you plan a VC round or future IPO; share registry and management board overhead

VCs and corporate acquirers prefer AD for share transfer mechanics and option pool standardisation. You can start as OOD and convert later.

A clean holding structure

A common pattern:

• Bulgarian operating EOOD/OOD — runs the product, employs the team, owns IP
• EU or Bulgarian holding company — owns the operating company

EU parent + 10% / 1-year shareholding = 0% Bulgarian dividend withholding under the Parent-Subsidiary Directive. This makes Bulgaria a friendly sub for Estonian, Dutch, Cypriot, or Irish holding companies.

IP ownership

Software developed by Bulgarian employees during their employment is owned by the employer under the Bulgarian Copyright Act — but include explicit IP-assignment clauses in employment contracts to remove any ambiguity at due diligence.

For contractor work, sign IP assignment agreements governed by Bulgarian law for Bulgarian contractors.

VAT for SaaS

• B2B EU customers: reverse-charge under VIES; you charge 0% VAT and they self-account
• B2C EU customers: charge the customer's country VAT rate; declare via OSS in Bulgaria
• US/UK/Other non-EU B2B: outside scope of EU VAT
• Register for VAT voluntarily from day one — it removes friction with EU enterprise customers

Payments

• Stripe Bulgaria for cards
• Paddle as Merchant of Record if you want to outsource sales tax globally — popular with SaaS founders avoiding US sales-tax and India GST headaches

Hiring engineers

• Senior engineer gross: EUR 36-60k/year
• Mid engineer gross: EUR 24-40k/year
• Total employer cost ≈ gross × 1.19
• Equity via virtual option plans is most common; statutory option pools are administratively heavy

Cap-table best practices

• Use English + Bulgarian shareholders' agreement
• Vesting, leaver provisions, ROFR, drag-along, tag-along — all enforceable
• Keep a single source of truth (Capdesk, Carta) reconciled to the Bulgarian share register

Exit readiness

A Bulgarian operating company is a familiar entity to EU acquirers. For US acquirers, having a Delaware or Dutch top-co with Bulgarian operating sub at the time of LOI usually accelerates close.

Bottom line

Incorporate as an EOOD or OOD, register for VAT immediately, structure IP cleanly, hire locally, and add a holding company only when an investor or acquirer requires it.