Whether you're a startup or an established company looking to expand to the Europe, setting up your headquarters for European operations in one of the European countries is a sound strategic move. The big question is, which country should you choose as your headquarters?
There are actually several choices that make sense, such as the United Kingdom and Cyprus. The former is one of the biggest economies in the world with a strong reputation, and the latter is one of the upcoming economies in the EU.
But are there any other options that may be suitable for your business? The answer is yes. One of the recommended jurisdictions is Bulgaria.
Bulgaria: Strong economic growth, attractive benefits for businesses
Bulgaria is a country in the south-eastern part of Europe that's bordered by Romania, Serbia, Macedonia, Greece, and Turkey. Together with Romania, Bulgaria joined the EU on 1 January 2007.
The 16th largest country in Europe experienced an economic set back in 2007-2008, and back on track in 2010. The main driving factor of the recovery is the government's focus in curbing corruption, as well as incentivizing economic activities by lowering the tax rates – the lowest in EU for both personal and corporate income tax rates.
All the above makes it an ideal jurisdiction for business activities across the Europe.
Offshore company HQ: Why Bulgaria?
Bulgaria is an attractive offshore destination for several reasons, as follow:
1. Stable political climate and an emerging economy
The economic outlook has been positive: The 2017 growth is estimated to exceed 3.7 percent, which is an improvement compared to 3.4 percent last year. To bolster the economy, Bulgaria is keen to join the Eurozone. Boyko Borisov, Bulgaria's PM, expressed confidence for the possibility of the country to become the 20th member of Eurozone.
When Bulgaria is eventually becoming a member of Eurozone, the country would be the smallest in the group in term of GDP – which isn't really a problem since it has a lot to offer, especially in science and technology sectors.
2. Low corporate tax rates
Corporate income tax is at a flat rate of 10 percent – the lowest in EU and amongst the lowest in Europe. To compare, Cyprus' is 12.5 percent, Ireland's is 12.5 percent (for trading income; 25 percent for non-trading income), and United Kingdom's is 20 percent.
There's one more upside when compared Bulgaria with other EU countries; Bulgaria is leading Europe when it comes to taxation for both companies and individuals: Bulgaria's flat income tax rate of 10 percent is applicable for both, which means that the jurisdiction is attractive as company headquarters and country of residence/citizenship (source).
Learn more about taxation in Bulgaria here.
3. Great for business activities in Europe
Doing business in Europe is not possible without an Intra-Community VAT number. You have to apply for it, obviously.
Now, applying for a VAT number typically requires you to have a physical presence in an European country. To have a physical presence, you have to set up a company and own/rent a property in the country.
That's not the case with Bulgaria. If you set up a company in Bulgaria, you can acquire the VAT number without the need to own or rent a commercial property.
4. Company formation and bank account – all in one jurisdiction
In establishing your presence offshore, you need these two: Company structure and bank account. Bulgaria can offer you both. Indeed, just like Cyprus, you can open a bank account in Bulgaria easily as a non-resident/citizen.
The combination of both makes Bulgaria an ideal jurisdiction that offers convenience to companies, specifically eCommerce companies, as well as other types of online business.
Another perk of setting up your HQ in Bulgaria is the fact that the jurisdiction is in the SEPA zone. SEPA (Single Euro Payments Area) makes cross-border payments more efficient and effective. Moreover, it enables customers to make cashless euro payments, which is another plus point for a Bulgaria-based eCommerce business serving European customers.
5. Remote company formation and account opening
When you choose Bulgaria as the basis of your business operations, you can set up the company and open the bank account remotely.
Using services like us, you'll only need to prepare the required documents, and we'll take care the formation and account opening. The whole process takes up to about two weeks (seven working days for company formation and two weeks for bank account opening).
Bulgaria is one of the emerging European countries. Strong economic growth, along with supportive financial sectors, makes the jurisdiction an attractive option for your European HQ.
If you want to learn more about the jurisdiction, consult with us. We can offer you professional advice regarding Bulgaria to help you decide whether the jurisdiction is the right one for your business.
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