Jurisdiction comparison · 2026
For a European-facing business a Bulgarian EOOD is cheaper and structurally simpler than a US entity. For a US citizen who has not left the US tax net, GILTI and Form 5471 usually cancel the advantage.
| Bulgaria 🇧🇬 | the United States 🇺🇸 | |
|---|---|---|
| Corporate tax | 10% flat | 21% federal + 0-9.8% state |
| Dividend tax | 5% | 0-20% qualified + 3.8% NIIT |
| VAT rate | 20% (0% intra-EU B2B) | No VAT; state sales tax 0-10% |
| Min. share capital | BGN 2 (≈ €1) | None (LLC or C-corp) |
| Setup time | 3-7 business days | 1-5 business days (state), weeks for EIN and banking |
| EU membership | Yes (since 2007) | No |
| Social contributions | ~32% (capped at BGN 4,130/mo) | 15.3% self-employment tax up to the wage base |
The comparison depends almost entirely on the founder's tax residence, not the company's. A Bulgarian EOOD taxed at 10% plus 5% on dividends beats a US LLC or C-corp on paper, and it comes with an EU VAT number that a US entity can never have. But the United States taxes its citizens and green card holders wherever they live, so a US person owning an EOOD holds a controlled foreign corporation: Form 5471 every year, GILTI inclusions on retained profit, and no automatic credit for the 10% Bulgarian tax against the personal layer. Non-US founders serving European customers, and US persons who have genuinely expatriated or who structure carefully around FEIE and salary, are the two groups where Bulgaria clearly wins. Everyone else should treat the US filing burden as the real cost.
Read the Bulgaria tax residency guideA step-by-step walkthrough of the remote registration, the documents you sign at home, exit-tax points and how VAT works on sales back into the United States.
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