Business type guide · 2026

Bulgarian company for SaaS and digital products

Software revenue is portable, which is exactly why tax authorities look hard at where it is booked. A Bulgarian EOOD is a clean home for a SaaS business when the founders, the code and the decisions genuinely sit there or nowhere in particular.

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

Why it fits SaaS and digital product businesses

Retained profit is taxed once at 10%, which compounds fast for a business reinvesting into product and paid acquisition.
An EU entity satisfies enterprise procurement and data-processing reviews that reject offshore vendors outright.
Development salaries can be run on Bulgarian payroll at a cost far below Western Europe while staying fully compliant.
5% on dividends when founders eventually take money out, against 26-42% in most of the EU.

VAT

Digital services to EU consumers are taxed where the consumer is, reported through the OSS return. Sales to EU businesses are reverse-charged. Many founders avoid the whole problem by selling through a merchant of record, which becomes the seller for VAT purposes and pays you a net royalty; that is simpler, but the fee is usually higher than the compliance it replaces.

Substance and residency

Intellectual property is the asset regulators care about. If the code was written elsewhere and later assigned to the Bulgarian entity, document the transfer and price it properly. Building it inside the company from the start avoids the argument entirely.

Paying yourself

SaaS businesses usually retain most profit for growth, so the effective rate stays near 10% until a distribution or an exit. Founder salaries on Bulgarian payroll are deductible.

What it costs

Formation from €890; accounting from about €120 a month, plus payroll per employee.

Full pricing

Mistakes SaaS and digital product businesses make

Moving an existing product into the company without a valued IP transfer.
Selling B2C across the EU without OSS registration.
Running the whole team from a country that then claims the company is managed there.

Frequently asked

Does a Bulgarian company work for a US-facing SaaS?

Yes. Sales to US customers are outside EU VAT. You may still have US state sales-tax obligations depending on volume and state.

Should I use a merchant of record?

If most revenue is EU or global B2C and you do not want to run OSS, the fee often buys back real time. For B2B-heavy products, direct invoicing with reverse charge is usually cheaper.

How is an eventual sale of the company taxed?

That depends on the seller's residency, not on Bulgaria alone. It is worth modelling before you take investment.

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

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