Freelancers in Bulgaria: Self-Employed or EOOD?
Bulgaria has become a popular destination for freelancers and IT specialists. Low taxes, a stable legal framework, and access to EU markets make it attractive for digital professionals worldwide. But one question always comes up: Should you register as self-employed or set up an EOOD (single-owner limited company)? Stay with us to learn more.
Self-Employed (Freelancer)
This option is only available if you have residency in Bulgaria. EU, EEA, and Swiss citizens can usually register with a residence certificate. Non-EU citizens require a residence permit and, in most cases, a work permit as well.
Key features include:
- Taxes: 10% personal income tax, but only 75% of income is taxable since 25% is automatically recognized as expenses.
- Social contributions: paid monthly, based on legal minimum and maximum thresholds.
- Simplicity: registration is quick, cheap, and less demanding in terms of accounting.
- Restriction: ❌ without residency, you cannot register as self-employed.
Example: If a freelancer earns BGN 3,000 per month, only BGN 2,250 is taxable, while BGN 750 is automatically considered deductible expenses – no invoices required.
EOOD (Single-Owner Limited Company)
This is the most common choice for foreigners without Bulgarian residency. The law allows a foreigner to own and manage an EOOD without a residence permit. 🌍
Its main advantages are:
- Taxes: 10% corporate tax on company profit, plus 5% dividend tax if profits are distributed.
- Expenses: all real business expenses can be deducted – equipment, rent, software, travel, or marketing.
- Flexibility: profits can be reinvested in the company instead of being distributed.
- Social security: you can pay yourself a salary or register as self-insured through the company, often with minimum contributions.
- Professional image: many international clients prefer contracting with a company rather than an individual.
Example: If an EOOD generates BGN 30,000 annual profit, it pays BGN 3,000 corporate tax. If the owner distributes dividends, an additional 5% applies. Meanwhile, all expenses related to the activity are deductible, lowering the taxable base.
Comparison Table
| Criteria | Self-Employed | EOOD |
|---|---|---|
| Residency Required | Yes | No |
| Taxation | 10% income tax (after 25% deduction) | 10% corporate tax + 5% dividend tax |
| Expense Deduction | Fixed 25% | All real business expenses |
| Social Security | Monthly contributions | Salary or self-insured |
| Best For | Residents with limited expenses | Foreigners, IT experts, global clients |
How to Choose the Right Option
The decision depends on your personal situation. If you are a resident and your business has limited expenses, the self-employed model may be simpler and more cost-effective. If you are not a resident, then EOOD is the only option. 🚀
Beyond taxation, think about how clients perceive you. Many international businesses prefer working with registered companies. Having an EOOD not only allows tax planning but also builds trust with partners and clients abroad. On the other hand, if your work is primarily local and your costs are low, self-employment can save you both money and paperwork.
Ready to start your business journey in Bulgaria? T&G Consulting helps freelancers and register properly, choose the right model, and remain fully compliant with Bulgarian law.
Partner with T&G Consulting and take the first confident step toward building a successful career in Bulgaria in 2025 and beyond.
For more usefull information you can visit our partners’ channel here!