In short
- €80,000 paid out to a resident owner: €11,600 of tax in Bulgaria, €13,802 in Cyprus with non-dom status.
- Bulgaria withholds 5% on dividends to individuals and to companies outside the EU. Cyprus withholds 0%.
- Registration with us: €280 in Bulgaria, from €1,699 in Cyprus. Accounting from €150 and €290 a month.
- Every Cyprus company is audited or reviewed. A Bulgarian one is audited above two of three size limits.
In this guide
Bulgaria and Cyprus side by side
Both countries are in the EU, both use the euro and both let a foreigner own the whole company. The differences are the rate, the tax on dividends and the price of keeping the company. We register both. Company formation in Bulgaria costs €280 and takes 5 to 10 working days.
| Point | Bulgaria | Cyprus |
|---|---|---|
| Corporate tax | 10% flat | 15% from 1 January 2026 |
| Tax on dividends | 5% withheld from individuals and from companies outside the EU and EEA | 0% withheld on dividends paid abroad; an owner living in Cyprus pays 0% or 5%, and 2.65% health contribution |
| VAT | 20%, registration above €51,130 in a calendar year | 19%, registration above €15,600 in 12 months |
| Registration with us | €280 before VAT, 5 to 10 working days | €1,699 to €4,999 before VAT, 8 to 12 working days |
| Accounting with us | from €150 a month, €180 with a VAT number | from €290 a month |
| Bank account | Current account in 1 week to 2 months | 4 to 12 weeks; a payment account in 1 to 5 working days |
| Residence for the founder | No residence permit comes with the company | Through a company of foreign interests with €200,000 invested |
| Audit | Above two of three limits: €2,045,168 of assets, €4,090,335 of net sales, 50 staff | Every company; a review under €300,000 of turnover and €500,000 of assets |
| Who it suits | Service companies and online sellers that pay profit to the owner | Software and patent income, holding companies, owners outside the EU |
Cyprus or Bulgaria: which to choose in five cases
The kind of income and where the owner lives decide between the two:
- An agency, a consultancy or an online shop whose owner takes the profit out: Bulgaria, at 14.5% in all and €2,080 in the first year.
- A subsidiary of a group based in the EU: Bulgaria, at 10% on profit and nothing withheld on the dividend to the parent.
- A company that earns from its own software or patents: Cyprus, where the IP Box brings the rate to about 3%. On €80,000 of such profit that is €2,400 against €8,000.
- A holding company that will sell subsidiaries or pay dividends to owners outside the EU: Cyprus, which exempts the gain and withholds nothing where Bulgaria takes 10% and 5%.
- A founder from outside the EU who needs residence for the family: Cyprus, through a company of foreign interests with €200,000 invested.
From profit to the owner: €80,000 in each country
The corporate rate is the first charge. The second falls when the profit becomes a dividend, and it depends on where the owner lives. The table follows €80,000 of profit, paid out in full to an owner who is tax resident in the country of the company.
| Step | Bulgaria | Cyprus, non-dom owner | Cyprus, domiciled owner |
|---|---|---|---|
| Corporate tax | €8,000 | €12,000 | €12,000 |
| Dividend | €72,000 | €68,000 | €68,000 |
| Tax on the dividend | €3,600 | €0 | €3,400 |
| Health contribution | none | €1,802 | €1,802 |
| Owner receives | €68,400 | €66,198 | €62,798 |
| Tax in all | €11,600, or 14.5% | €13,802, or 17.25% | €17,202, or 21.5% |
In Bulgaria the company withholds a final 5% from the dividend. In Cyprus a resident owner who is domiciled there pays 5% Special Defence Contribution on dividends from profits of 2026 onwards. An owner who moved to Cyprus from abroad is non-domiciled for up to 17 years and pays none, on dividends and interest from any source. Both Cyprus owners pay 2.65% to the health system (GeSY).
That contribution is charged on up to €180,000 of income a year, so it stops at €4,770. On a profit of €400,000 the non-dom owner in Cyprus pays €64,770 in all, 16.2%, and the owner in Bulgaria €58,000. Bulgaria stays lower at every size: above that level the gap is 0.5% of the profit plus €4,770.
What each company costs to open and to keep
| Cost | Bulgaria | Cyprus |
|---|---|---|
| Registration with us, before VAT | €280 with the state fee and the Bulgarian notary | €1,699 with state fees, registered office and secretary for a year |
| Accounting, first 12 months | €1,800 at €150 a month | €3,480 at €290 a month |
| First year | €2,080 | €5,179 |
| VAT number | Free with accounting, which is then €180 a month | €350, and €149 for VIES |
| Audit | None below the size limits | €700 to €1,500 with the auditors we work with |
| Each later year | €1,800 | €3,480, the audit, renewal of office and secretary |
The first year costs €3,099 more in Cyprus, and each later year €2,380 to €3,180 more before the office and the secretary are renewed. The IP Box earns that back from about €50,000 of qualifying profit: seven points of tax saved against Bulgaria are €3,500.
The filing rhythm differs too. A VAT-registered Bulgarian company files a return by the 14th of every month, and its corporate tax return and payment are due by 30 June. A Cyprus company files VAT returns by quarter, pays provisional tax on 31 July and 31 December and audits its accounts before the yearly return. The Bulgarian dates are in corporate tax in Bulgaria.
We do this for you Company formation in Bulgaria €280
Dividends to an owner who lives in another country
Bulgaria withholds 5% from a dividend paid to an individual wherever that person lives, and from a dividend paid to a company outside the EU and the European Economic Area. A company that is tax resident in an EU or EEA state receives it in full. Cyprus withholds nothing in any of the three cases.
| Who receives the dividend | Bulgaria, tax at source | Cyprus, tax at source |
|---|---|---|
| An individual abroad | 14.5% | 15% |
| A company in the EU or EEA | 10% | 15% |
| A company outside the EU and EEA | 14.5% | 15% |
Cyprus has two exceptions for related companies: 5% is withheld when the recipient sits in a low-tax jurisdiction and 17% when it sits in one on the EU blacklist. In every row the owner's own country then taxes the dividend under its rules, and a tax treaty decides how the Bulgarian 5% is credited. Owning the shares does not make the owner tax resident in either country.
Where Cyprus costs less: software, holdings, sale of shares
| Income or event | Bulgaria | Cyprus |
|---|---|---|
| Profit from own software and patents | 10% | about 3% under the IP Box |
| Dividends received from EU and EEA companies | exempt | exempt |
| Dividends received from other countries | 10% | exempt in most cases |
| Gain on the sale of a subsidiary's shares | 10% | exempt |
| Losses carried forward | 5 years | 7 years |
The IP Box deducts 80% of the qualifying profit from patents and copyrighted software, so 15% is charged on the remaining fifth. On €80,000 of such profit a Cyprus company pays €2,400 and a Bulgarian one €8,000. The share that qualifies follows the development costs the company carried itself.
A Cyprus holding company pays no tax on dividends from abroad unless the paying company lives mainly on investment income and is taxed at under 7.5%. Bulgaria exempts dividends from companies in the EU and EEA and taxes other dividends at 10%. It taxes a gain on shares at 10% as well, unless the shares were traded on a regulated market. The steps are in how to set up a holding company in Cyprus.
Living where the company is: residence and personal tax
Bulgaria gives no residence permit for owning a company. That is a separate immigration procedure. The country has been in the Schengen area since 2024, and Cyprus is outside it. A person becomes tax resident in Bulgaria with a permanent address, more than 183 days in any 12 months or the centre of their interests in the country. Income tax is a flat 10%, and a salary carries 32.7% of social contributions: 18.92% from the employer and 13.78% from the employee. The figures for three salaries are in salaries in Bulgaria.
Cyprus registers a company owned mainly by non-EU nationals as a company of foreign interests once €200,000 is paid into its bank account from abroad. That company can employ its owners on residence and work permits. Tax residence starts after 183 days in the year, or after 60 days with a home on the island and work or a directorship in a Cyprus company. Income tax is 0% on the first €22,000 a year and rises to 35% above €72,000. Social insurance is 8.8% each from employer and employee.
Company formation and bank account in Bulgaria and Cyprus: steps and times
A Bulgarian company is an EOOD with one owner or an OOD with two or more, with share capital from €1. The director signs two papers before a notary, in Bulgaria or abroad with an apostille, and we file the rest with the Trade Register. A Cyprus private company needs an approved name, a memorandum and articles, a registered office and a company secretary on the island. Our packages include the last two for the first year.
In Bulgaria the bank opens a capital deposit account during registration and issues its certificate in about a day. The current account is a second application: it takes from 1 week to 2 months and usually needs one visit by the director or a notarised power of attorney. In Cyprus the three local banks open an account in 4 to 12 weeks, and a payment account with Wise or Revolut works from the first week.
We open both and keep their books in one account: registering a company in Bulgaria costs €280 and company formation in Cyprus starts at €1,699, before VAT. A company that will keep its profit for years has a third option, compared in Estonia vs Bulgaria vs Cyprus.
