Relocating to a new country can be both exciting and overwhelming—especially when it comes to navigating tax systems, legal requirements, and everyday logistics. Bulgaria has become an increasingly attractive destination for freelancers, entrepreneurs, and remote workers thanks to its flat tax rates, low cost of living, and growing digital infrastructure. But making the move isn’t as simple as just hopping on a plane.

This FAQ is designed to give you clear, practical answers to the most common questions about moving to Bulgaria and becoming a tax resident. Whether you’re weighing the benefits of freelancing versus setting up a company, wondering how to register for social contributions, or curious about VAT obligations, this guide will walk you through the essentials—without the fluff or the fine print. If you’re serious about making Bulgaria your new base, this is where your planning should begin.

Personal income tax for freelancers in Bulgaria

If you are looking to relocate to Bulgaria for tax purposes, you need to be aware of the concept of tax residency. Both individuals and companies are subject to tax residency rules and being a resident of Bulgaria does not always mean that you are a tax resident of the country.

What is tax residency and why does it matter?

Tax residency determines which country has the right to tax your worldwide income. If you’re a tax resident in Bulgaria, you pay Bulgarian taxes only. If you’re resident elsewhere, that country may still tax you – even if you’re registered as a freelancer here.

How do I become a tax resident in Bulgaria?

The main ways are: spending more than 183 days in Bulgaria during the calendar year, or proving that your “centre of vital interests” is here. This means your business, property, family, or economic life is primarily based in Bulgaria.

Do I automatically stop being a tax resident in my home country?

No, at least not always. You must take steps to break ties – deregistering from tax, health, and social security systems there. Speak to a tax advisor in your country to do it properly. This is also the most important part of your entire process of relocation. Spend time and effort on it accordingly.

Residency and Physical presence

Perhaps the question that we are asked the most by foreigners looking to benefit from the Bulgaria tax system is whether one needs to physically be in Bulgaria in order to pay taxes here.

Do I have to spend 183 days in Bulgaria to be a tax resident?

Not necessarily. That’s just one of the options. You can also become a tax resident if your “centre of vital interests” is in Bulgaria – but the 183-day rule is the most secure and easiest to prove.

I was told I can register as a freelancer and pay taxes without even coming to Bulgaria. Why do you say this isn’t true?

You can only pay taxes here if you’re a tax resident. If you’re a tax resident elsewhere, you can’t just choose to pay in Bulgaria – and you may face legal consequences in your home country.

Do I need to be physically present for the set-up?

Only to apply for a residence permit and sign a power of attorney. Everything else can be done remotely.

How much time do I need to set up?

Once your housing documents are ready, residence can be arranged within a week. After that, company or freelancer registration can be completed remotely in about a week. Total: one week here, one week remote.

Do I need to spend time in Bulgaria physically?

Yes, if you want to rely on the 183-day rule or prove vital interests. If you just run a company that has substance here and you don’t need residency, then no.

Do I need a Bulgarian address to register as a freelancer or open a company?

Yes. It can be your rented apartment or a rental desk – they don’t have to be separate.

Do I need to rent or own an apartment in Bulgaria to become a tax resident?

Not legally required, but in practice – yes. You’ll need an address to get a residence permit. Without one, it would be close to impossible to claim and prove you are a tax resident here.

Can I keep my tax residency in Bulgaria if I travel most of the year?

Yes, if your centre of vital interests is clearly in Bulgaria – but this may be challenged by other countries.

Is Bulgaria in the Schengen zone?

Yes, as of January 1, 2025 Bulgaria is fully member of the Schengen area.

What’s the healthcare situation if I register here?

You pay into the public health system as a freelancer. You’ll have access to state care. Private insurance is also widely available.

Will I need to learn Bulgarian for bureaucracy?

Most forms and systems are in Bulgarian, but your accountant or lawyer can handle this for you.

What documents do I need for my residence permit?

Your rental contract and a notarized statement from the owner giving permission for registration are the most important documents. Everything else can be arranged by us or remotely.

I need to register and start working as soon as possible, even before the residence permit, is this possible?

Yes, but you will need to get it eventually.

Freelancer or Company

When moving to Bulgaria you will likely face the question of whether to register a company or operate as a freelancer. The answer is that it depends and here is why.

What is the difference between a company and a freelancer?

Freelancers are individuals. It’s simpler, cheaper, and has a lower effective tax rate when you don’t have many expenses. Companies are legal entities – they can deduct actual expenses, but they also come with more bureaucracy and accounting costs.

If you don’t have big costs – start as a freelancer. If you want flexibility, investors, or if you have a scalable business – consider a company.

My friend moved to Bulgaria years ago and has a single-member limited liability company (EOOD), but you are recommending a single-member variable capital company (VCC) – why?

The newly introduced VCC is more modern, flexible, and cheaper to maintain in some cases. It also allows you to open the company without opening a Bulgarian bank account, which was the main hurdle for foreigners in the past. It’s tailored for the new economy and will become the de facto standard with time.

I am still not sure what to choose, what should I do?

Then start as a freelancer. If the need arises, you can easily switch to a company.

Freelancer registration & taxes

OK, let’s now jump straight to the point with the legal and taxation issues.

If I come to Bulgaria and register as a freelancer with a single client, can this be considered hidden employment?

Not really. It depends on the contract and the real relationship. Hidden employment rules are designed to protect workers – unless you’re making a claim yourself, nobody is going to raise this.

Is there a maximum I can make with the low freelancer tax?

No. Your income is taxed at a flat 10% rate, no matter how much you make.

This sounds too good to be true, are you sure?

Yes.

Can I get additional expenses as a freelancer above 25%?

No. If you have significant expenses, you might consider switching to a company.

Is the tax law on freelancers going to change soon?

No confirmed changes are planned. Nothing serious is currently being discussed in parliament.

Why are social securities so high in Bulgaria and can I legally optimise them?

They’re only high for freelancers. It’s the cost of accessing the low freelancer tax rate. Company owners pay much lower socials, but at a higher effective tax rate. It’s a question of mathematics, not legality.

Do I need an accountant? It’s a basic job, right?

In theory, yes – but in practice, everything is in Bulgarian and the software and NRA systems are hard to navigate. Most people work with an accountant.

VAT rules

The VAT rules are important especially if you will be working with clients from the EU.

Do I need to register for VAT?

If you invoice business clients within the EU – yes. You will not be paying VAT, but your set-up and monthly accounting fees will increase slightly.

I read that there is a threshold of EUR 50 000,00. Is that true?

Yes, but unless you provide services to people/business clients in Bulgaria or to non-business client, your income will not be counted towards this threshold.

Can I register for VAT voluntarily?

Yes, but it would bring you no benefits.

If I work with non-EU clients, do I need to register for VAT?

Usually not.

Tax system and Compliance

What is the tax and how do you pay it?

What’s the total effective tax rate if I register as a freelancer?

Income – 25% (deductible expenses) – ~30% socials = tax base. Then pay 10% income tax on that. The effective rate is around 9-10% depending on income level.

What’s the total effective tax rate if I have a company?

Income – actual expenses (socials included) = profit. Then 10% corporate tax + 5% dividend tax. Socials are usually the minimum (~€150/month). The effective rate is around 15-16% depending on income level.

What are the mandatory social contributions and what do I get for them?

Pension, health, sickness, and (optional) unemployment. You get access to the public healthcare system and basic coverage.

Do I need to pay taxes in my home country too?

If you relocate properly and cut ties, then no. But check with a tax advisor at home to ensure you don’t trigger dual residency.

Can I be a tax resident in Bulgaria and still keep my EU health insurance (e.g. EHIC)?

Only if you’re insured in another EU country. If you pay socials in Bulgaria, you get a Bulgarian EHIC.

Do crypto gains get taxed in Bulgaria?

Yes – 10% flat tax with 10% deductible expenses (effective 9%) for individuals. For companies, normal rules apply. However, tax is applicable only on your profits from selling or exchanging your crypto assets, the increase in value is not taxable.

Can I use a foreign bank account for my Bulgarian company/freelancer income?

Technically yes, but not ideal. Use Revolut, Wise, or similar. Avoid using personal or home country accounts. Try to separate personal and business activity.

Do I need a Bulgarian bank account?

Not strictly. You can use fintech platforms Revolut or Wise. Just make sure the account isn’t linked to your country of origin if you’re trying to cut ties.

What documents do I need to start the registration?

It depends on which option you choose. However, starting with finding a place to live and concluding a rental agreement and a written statement from your landlord will almost always be the first step.

How often do I need to file taxes or declarations?

Monthly for socials and (if applicable) VAT. Quarterly for prepayments, and annually for income tax.

Professional help

Do you really need professional services to relocate to Bulgaria? In theory no but in practice… yes.

Do I need a lawyer to register?

No, but it will save you an enormous amount of time. No more, no less.

Can you recommend an accountant?

Yes – we can handle your accounting or refer you to one of our partners.

Can someone else (e.g. accountant, lawyer) handle everything on my behalf?

Yes, with a power of attorney.

Non-EU citizens

We are not going to be sugarcoating it. It’s not easy.

How do I get a residence permit if I am not from the EU?

Options include registering a trade representative office or using the newly introduced digital- nomad route. Ask us – we’ll guide you based on your situation.

Can I register a company or as a freelancer if I’m on a tourist visa?

You can register a company without a visa, but you need a long-term permit to live and pay taxes here.

Will Bulgarian residency give me access to other EU countries?

Not automatically. You need to become a long-term EU resident to gain full mobility rights.

Risks and Grey areas

Is this going to get me in trouble with my home country tax authorities?

Again, this is probably the most important part of the whole FAQ. If you want to stop paying taxes in your home country, you need to do it properly – and that means working with a local tax advisor there. This isn’t about finding a loophole or switching flags. It’s about understanding what rules apply to you, and how to follow them.

A local advisor will help you figure out what exactly needs to change – your residence registration, bank accounts, broker accounts, Revolut address, health insurance, voter registration, etc. These are just examples, not an exhaustive list. Get advice early – it saves you money and stress.

What happens if another country claims I am still a tax resident there?

You’ll need to provide a tax residency certificate from Bulgaria. But if you don’t really live here, you may not get one – and you may be taxed elsewhere.

Tax Monkey Services

What services does the Tax Monkey team offer?

Everything that you need to be compliant. We cannot offer you accounting for your company, but we can help you find a good accountant. We can even recommend a real estate agent to help you find a place to live or even work with them directly to do it for you.

Can you register a company for me, nothing else?

Yes, you can simply contact us.