1. What are the comparative advantages of a Bulgarian company compared to a Greek company?
A Bulgarian company ensures that 90% of net profits are distributed to the shareholder as dividends, while a Greek company distributes only 60% of net profits.
Bulgarian companies are not subject to a series of extra taxes such as advance tax for the next year, , ENFIA (Unified Property Ownership Tax), special property tax (EFA), property transfer tax, business tax, and many other taxes and stamps.
Finally, in the process of bookkeeping and record-keeping, the system is very simplified, without my data, interconnection of POS with cash registers, etc.
2. Is Bulgaria a safe Tax Advantageous Destination for an entrepreneur, or does it pose risks?
Bulgaria is a member state of the European Union and offers an entrepreneur developing business activities in the country the opportunity to rely on international accounting standards, interbank data exchange, the principle of worldwide income taxation, cooperation with other states and tax authorities for combating money laundering, and tax authorities that detect violations and impose fines on offenders.
So, there are rules, like in other EU member states, that make Bulgaria an equivalent state and not a risky tax advantageous destination.
3. If I want to proceed with the purchase/transfer of real estate in Greece through a Bulgarian company, am I exempt from paying taxes in Greece?
The purchase/transfer of real estate by a Bulgarian company is subject to all taxes applicable in Greece since the property is located within Greek territory. All foreign companies, including Bulgarian ones, therefore have the same obligations as Greek companies.
4. Do e-shops based in Bulgaria charge VAT when selling to Greece or other countries abroad?
E-shops based in Bulgaria that target private customers are subject to VAT on their transactions, both within Bulgaria and when selling abroad. Indeed, with the OSS system, there are conditions and terms for VAT reporting in the countries where they operate.
5. How can I acquire and drive a car with Bulgarian plates in Greece? Do I risk seizure by Customs or Tax Authorities if they stop me for an on-site inspection?
Of course! It’s a very serious violation and can result in the vehicle being seized when the driver is not a tax resident abroad, meaning they belong to the two categories of foreign residents as a natural person. Otherwise, a registration tax and VAT on the vehicle will be imposed.
There are fraudulent individuals who lease vehicles from companies or obtain authorization from other individuals, but these actions carry the same risk in on-site inspections.
6. My insurance, if I establish a Bulgarian company, is it mandatory to be with the Insurance Fund in Bulgaria, or can it be done with EFKA in Greece? Can I have full coverage for retirement and medical care in Greece?
The process exists and is supported by legislation from our company to our clients. We have the entire salary structure for covering insurance obligations with EFKA in Greece on behalf of your Bulgarian company. You simply request it from us, and we connect you to the EFKA system, providing you with full coverage for retirement and medical care in Greece.
7. Is it possible to expand my Greek company to Bulgaria by establishing a branch there? Can the opposite also be done? Which are the differences?
Expanding your business from Greece to Bulgaria can be done safely by establishing a branch from Greece and the parent company (headquarters).
Of course, the reverse proposal can also be supported, with the headquarters being in Bulgaria and the branch of the Bulgarian company in Greece.
Our relationship above gives us the opportunity to have a combined tax legislation as the company in Greece will have a higher tax rate (22%) whereas the company located in Bulgaria will have a lower tax rate (10%).
In any case, the consolidated financial statements between the two companies allow us to have different representations in taxation, capital movement, and decision-making by the management.
8. Can I transfer the money I earn with my company in Bulgaria to a personal account as dividends in Greece? Through which process? Will the profits and dividends of my Bulgarian company be subject to taxation in Greece if I am not a Tax Resident Abroad?
The funds originating from the profits of the Bulgarian company can be repatriated both tax-wise and banking-wise to Greece through the process of issuing a dividend distribution certificate without any risk or fear of re-taxation in Greece, as the double taxation avoidance agreement between our two states allows us to avoid any extra tax.
9. What is the process of establishing a Bulgarian company? How much bureaucracy is involved and what difficulties will I face during the establishment of the company and the opening of the corporate bank account?
The process of establishing a Bulgarian company requires as documentation your identification and a tax-related document that includes your VAT number. By completing an application and being physically present in Bulgaria, a Bulgarian company can be established within two days, allowing it to operate worldwide with unrestricted transactions.
10. Do I need to have some substance in Bulgaria to avoid my company being classified as a virtual or "ghost" company as tax authorities refer to it?
Certainly! Substance is very important, and you should ensure that your company has a physical presence (not just a tax address, accountant’s or lawyer’s office) but actual establishment with electricity, water, telephones, internet, utilities, furniture, equipment, employed personnel, website, etc.
We undertake to guide you through all of the above to ensure that your company in Bulgaria is not characterized as virtual or a “shell” company as tax authorities refer to it.
At EPIDOSIS, our experienced executives are Tax Experts and we ensure ZERO accounting and auditing errors for our clients! Contact us immediately to arrange a meeting at our offices in Athens, Thessaloniki, and Larissa in Greece, or in Sofia, Bulgaria.
You can send us a message on the Contact FormFormor you can call at our offices in Athens 2106810690 or in Thessaloniki 2310477725 to analyse all the above.
