Business type guide · 2026

Bulgarian company for freelance developers

Most freelance developers bill a handful of EU or US clients, hold almost no assets in the company and take profit out as dividends. That profile fits a Bulgarian EOOD unusually well: the tax stack is flat, the accounting is cheap and the whole setup runs remotely.

Corporate tax: 10% flat
Dividends: 5% withholding
Setup: Remote, 3-7 business days

Why it fits freelance developers

Client work is invoiced from a single EU VAT-registered entity, which agencies and enterprise procurement teams accept without extra paperwork.
10% corporate tax on profit plus 5% withholding on dividends means roughly 14.5% total on distributed profit, against 40-50% effective in most of Western Europe.
Development income has almost no local-source nexus, so it is easy to argue the profit belongs where the work and the management sit.
Costs that matter for developers (hardware, cloud, courses, co-working, travel to clients) are deductible against the 10% base.

VAT

Services to EU business clients are reverse-charged: you invoice without Bulgarian VAT and report the sale in the VIES recapitulative statement. Selling to a client outside the EU is outside the scope. B2C sales inside the EU are the exception that catches people out, especially for anything that qualifies as an electronically supplied service.

Substance and residency

A laptop and a registered address is a thin story if you still live full time in a high-tax country. The safe version is that management decisions, contracts and the bulk of your working days are outside your former residence, or that you formally move. Both are workable; the mistake is doing neither and hoping nobody looks.

Paying yourself

Directors of a Bulgarian company pay social contributions on a declared base. The usual pattern is a modest management salary that satisfies the contribution rules and covers health cover, with the balance distributed as dividends taxed at 5%.

What it costs

Formation from €890 one-off, then roughly €80-150 a month for accounting at freelance volumes.

Full pricing

Mistakes freelance developers make

Continuing to live and work from your old country while treating the EOOD as if it were tax-resident elsewhere.
Forgetting VIES filings on reverse-charged EU invoices, which triggers penalty notices even when no VAT is due.
Distributing everything as dividends and skipping the contribution base, which creates gaps in health cover.

Frequently asked

Can I keep my existing freelance clients when I move to a Bulgarian EOOD?

Yes. In practice you sign a new contract between the client and the EOOD and invoice from the new entity. EU business clients handle reverse-charge invoices routinely.

Do I need to live in Bulgaria to run the company?

No. Registration and ongoing management can be handled remotely. Where you personally are tax resident is a separate question and is the one worth getting right.

What does a developer typically pay in total tax?

On distributed profit the company-level stack is 10% corporate tax then 5% on the dividend, roughly 14.5% combined, before your own personal residency position.

Guides by home country Tax calculator What an EOOD actually is Country tax comparisons

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