Portugal After NHR: Is Bulgaria the Better Option in 2026?

For a decade, Portugal was the default answer for location-independent founders in Europe. The non-habitual resident regime gave ten years of favourable treatment, and Lisbon and Porto filled up accordingly. That door closed to new applicants, and the replacement, IFICI (often called NHR 2.0), is far narrower: it targets scientific research, innovation and a defined list of qualifying activities, and it does not cover most consultants, agency owners or ecommerce sellers.

If you are in Portugal without NHR or IFICI, you are on standard rates. This guide sets out what that means in 2026 and how it compares to a Bulgarian EOOD.

Portugal standard rates in 2026

Item	Portugal	Bulgaria
Corporate income tax (IRC)	20% standard, 16% on the first EUR 50,000 for SMEs	10% flat
Municipal surcharge (derrama)	up to 1.5%	none
State surcharge on large profits	3% to 9% above EUR 1.5m	none
Dividend withholding	28%	5%
Top personal income tax	48% plus solidarity surcharge	10% flat
Social security for self-employed	21.4% on 70% of income	capped contributions

Worked example: EUR 120,000 of company profit

Portugal. IRC on an SME takes 16% on the first EUR 50,000 and 20% on the rest, roughly EUR 22,000, plus derrama. About EUR 97,000 remains. Distributing it as a dividend costs 28%, another EUR 27,200. The founder nets roughly EUR 69,800.

Bulgaria. 10% corporate tax is EUR 12,000, leaving EUR 108,000. A 5% dividend withholding is EUR 5,400. The founder nets EUR 102,600.

The difference is about EUR 32,800 a year on the same profit.

The catch: residence follows you

Portugal taxes residents on worldwide income. Owning a Bulgarian company while living in Portugal does not, by itself, change your Portuguese tax position:

• Place of effective management. A company managed day to day from Lisbon can be treated as Portuguese tax resident.
• CFC rules (Article 66 CIRC). Where a Portuguese resident controls a company in a jurisdiction with an effective tax rate below 60% of the Portuguese rate, profits can be attributed to the shareholder. Bulgaria's 10% falls below that line, so the escape route is proving genuine economic activity: real staff, real premises, real local decision-making.
• Dividends received. Even if the company is respected, dividends paid to a Portuguese resident are taxed in Portugal at 28% (or aggregated at marginal rates), with credit for Bulgarian withholding.

So the honest framing is this: a Bulgarian company is a genuine saving if you either move to Bulgaria, or you build a Bulgarian operation with substance and manage the tax position on both sides with advice.

What moving to Bulgaria actually costs

Bulgaria is cheaper than Portugal on almost every line that matters to a founder:

• Flat 10% personal income tax with no progressive bands
• Social contributions capped at BGN 4,130 of monthly insurable income in 2026
• Sofia and Varna rents materially below Lisbon and Porto
• EU membership, so no visa, no golden-visa fees, no minimum investment
• English widely spoken in professional services

Registering as an EU citizen means an address, a residence certificate and health insurance. There is no minimum stay purchase and no investment requirement, unlike the Portuguese golden-visa route.

Company setup practicalities

A single-member EOOD needs BGN 2 of share capital, a registered address in Bulgaria and a manager. If you cannot travel, a notarised and apostilled power of attorney allows remote incorporation. The registry entry typically takes five business days. Our documents guide lists exactly what to prepare and our timeline page breaks the stages down day by day.

Running costs are modest: accounting from EUR 50 a month, a registered address from EUR 200 a year, and an annual financial statement filing by 30 June with the tax return by 30 June. Our annual filing calendar has every deadline.

VAT if you keep Portuguese clients

Bulgaria's registration threshold is BGN 100,000 of taxable turnover in twelve consecutive months, but B2B services to other EU businesses require a VIES number immediately. Once registered you file monthly. B2C sales into Portugal fall under OSS after the EUR 10,000 pan-EU threshold. The VAT registration guide covers each trigger.

Frequently asked questions

Is NHR completely gone?

The classic NHR regime is closed to new applicants. Existing beneficiaries continue for the remainder of their ten-year period. IFICI replaced it for a narrow set of qualifying activities, mainly research, innovation and certain highly qualified roles, and most service-business owners do not qualify.

Can I stay in Portugal and just invoice through Bulgaria?

Not safely. Effective management and CFC rules are designed for exactly that. Either relocate or build genuine Bulgarian substance and take advice on both sides.

How does Bulgaria compare to Cyprus or Malta?

Bulgaria's headline 10% is lower than Cyprus's 12.5% and simpler than Malta's refund mechanism, which requires a holding structure to get the effective rate down. Bulgaria has no participation-exemption gymnastics and no annual refund cycle. See our EU tax comparison for the full table.

What about the Portuguese exit charge?

Portugal applies an exit tax on unrealised gains for individuals holding shares when they cease residence in defined circumstances. Get advice on timing before you deregister with the Portuguese tax authority.

Do I need to speak Bulgarian?

No. Filings are handled by your accountant, banks serve English-speaking clients, and all our correspondence is in English.

Next step

Model your own numbers with the tax calculator, then book a free consultation and we will map out what a compliant move looks like for your business.