Bulgaria vs Romania: Company Tax, Real Cost and Which Is Cheaper in 2026
Romania halved its micro-company threshold and raised dividend tax to 16% in January 2026. Bulgaria kept 10% corporate and 5% dividend. This comparison shows what that does to the money the owner actually keeps, with the arithmetic on the page and a source for every rate.
Quick answer
Is Bulgaria or Romania cheaper for a company in 2026?
On €100,000 of profit taken out as dividends, a Bulgarian EOOD leaves the owner with about €85,500 and a Romanian SRL with about €68,706 — a gap of roughly €16,800 per year. Romania’s 1% micro-company tax is still the lower headline number, but it is charged on turnover rather than profit, and from January 2026 it stops at €100,000 of revenue. Romania is cheaper while profit stays inside the company; Bulgaria is cheaper the moment the owner takes the money out.
Bulgaria — corporate tax
10%Flat, applied to tax-adjusted company profit from the first euro.
Bulgaria — dividend tax
5%Unchanged in 2026. No health contribution applies on dividends.
Romania — corporate tax
16%Standard rate for companies outside the micro regime.
Romania — dividend tax
16%Raised from 10% in January 2026, plus a capped 10% health contribution.
The rules changed this year, and several comparisons have not
Two years ago Romania’s micro-company regime allowed up to €500,000 of revenue at 1% or 3%, and dividend tax was 10%. A founder could reasonably conclude Romania was the cheaper EU base. Articles still ranking for this question describe exactly those rules. They no longer exist: from 1 January 2026 the threshold is €100,000, the 3% bracket is gone, and dividend tax is 16%.
Side by side
Bulgaria and Romania compared, item by item
| Item | Bulgaria (EOOD / OOD) | Romania (SRL) |
|---|---|---|
| Corporate income tax | 10% flat | 16% |
| Small-company regime | None — 10% applies from the first euro | 1% of turnover, revenue up to €100,000, minimum one employee |
| Dividend tax | 5% | 16% |
| Health contribution on dividends | None | 10% CASS once dividends reach RON 24,300; base capped at RON 97,200 |
| Social contributions on salary | 32.7%–33.4% total, capped at €2,300 per month since 1 August 2026 | Employee 25% CAS + 10% CASS; employer 2.25% work insurance |
| Minimum share capital | €1 in practice | RON 1 |
| Registration time | 3–7 business days once documents are notarised | 3–10 business days |
| Accounting currency | EUR since 1 January 2026 | RON — conversion overhead for euro-invoicing businesses |
| Annual running cost | €1,200–€3,000 for a small company | €1,500–€3,500 |
| Banking for non-residents | Workable in 2–4 weeks, in person or by power of attorney | Workable, generally slower for non-resident owners |
| Domestic market | 6.4 million | 19.1 million |
| EU status | Member, eurozone since 2026 | Member, own currency |
The table already shows the shape of the answer. Romania has the lower entry rate and the larger market. Bulgaria has the lower rate on everything above a small revenue line, and a much cheaper route for moving money from the company to the owner.
The real number
What happens on €100,000 profit?
Many founders compare only headline corporate tax. That is not enough. Real cost comes from three layers: company tax, the tax on getting profit out, and the contributions attached to it. Below is a founder-managed company generating €100,000 of annual profit, fully distributed to a single owner.
Bulgaria — EOOD
€85,500Corporate tax: €100,000 × 10% = €10,000
Profit after corporate tax: €90,000
Dividend tax: €90,000 × 5% = €4,500
Health contribution on dividends: none
Total tax: €14,500
Effective rate: 14.5%
Romania — SRL (standard regime)
€68,706Corporate tax: €100,000 × 16% = €16,000
Profit after corporate tax: €84,000
Dividend tax: €84,000 × 16% = €13,440
CASS: 10% on capped base of RON 97,200 (€18,540) = €1,854
Total tax: €31,294
Effective rate: 31.3%
How we calculate
Single owner, profit fully distributed, no salary drawn, no treaty relief applied. RON converted at the ECB reference rate of 5.2427 RON/EUR on 14 August 2026. Romanian CASS is charged at 10% on a base capped at 24 minimum gross salaries (RON 97,200 for 2026), so it is a fixed ceiling rather than a percentage that grows with the dividend. Bulgarian figures assume dividends only; a salary would add contributions up to the monthly cap in both countries.
The difference is €16,794 per year on identical profit. Over five years, on a business that does not grow at all, that is roughly €84,000 — enough that the choice of jurisdiction is not a rounding error in the business plan. You can run your own figures in our Bulgaria tax calculator.
Check the numbers against your actual business
The comparison above assumes full distribution and no salary. Your margin, your residence and how you take money out change the result. A paid consultation puts your figures into the same calculation.
The detail most comparisons miss
Why Romania’s 1% is not what it looks like
The Romanian micro-company tax is 1% of turnover. It is not 1% of profit. That single distinction decides who can use the regime at all.
A company with €100,000 of profit almost certainly has revenue well above €100,000 — and from January 2026, revenue above €100,000 means the company leaves the micro regime and moves to 16% corporate tax from the quarter in which the threshold is crossed. In other words, the 1% rate and a €100,000 profit are close to mutually exclusive.
Where micro does apply, the arithmetic changes with margin. Take a consulting company with €100,000 of revenue and €80,000 of profit:
| Romania (micro) | Bulgaria | |
|---|---|---|
| Company tax | 1% × €100,000 turnover = €1,000 | 10% × €80,000 profit = €8,000 |
| Distributable | €79,000 | €72,000 |
| Dividend tax | 16% = €12,640 | 5% = €3,600 |
| Health contribution | €1,854 | — |
| Owner keeps | €64,506 | €68,400 |
Romania wins the company-tax line by €7,000 and still loses by €3,894, because the extraction layer costs three times more. That is the pattern across almost every distribution scenario: Romania is cheaper while the money stays in the company, Bulgaria is cheaper the moment it comes out.
The honest part
When Romania actually wins
There are real cases where Romania is the better answer, and pretending otherwise would make this comparison useless.
You retain profit instead of distributing it
This is the strongest case and it is not close. A micro company with €100,000 of revenue and €80,000 of retained profit pays €1,000. The Bulgarian equivalent pays €8,000. If you are reinvesting into stock, equipment or hiring for the next three to five years and taking only a modest salary, Romania’s micro regime is genuinely cheaper — as long as revenue stays under €100,000.
You already live in Romania
If you are Romanian-resident and running the business from Bucharest or Cluj, a Bulgarian company creates a management-and-control problem rather than solving a tax one. Romania may treat the company as tax resident there because that is where effective management sits. The €16,800 saving assumes the company is genuinely managed from Bulgaria.
You are selling to the domestic market
Romania’s internal market is three times Bulgaria’s — 19.1 million people against 6.4 million. If your customers are Romanian consumers or Romanian businesses, local presence, local invoicing and local language support matter more than an eleven-point tax difference. Tax should not be the only driver.
You need to hire at scale
Romania has a deeper labour pool, particularly in IT and shared services, and the employer side is structurally lighter: for normal working conditions there is no employer social insurance contribution, only 2.25% work insurance, with 25% CAS and 10% CASS falling on the employee. Bulgaria splits 32.7%–33.4% between employer and employee. For a company with fifteen employees, that matters more than the dividend rate.
2026 changes
What changed this year
Both systems moved in 2026, in opposite directions.
Romania tightened
The micro-company revenue threshold fell from €250,000 to €100,000, the 3% bracket was abolished leaving a single 1% rate, and dividend tax rose from 10% to 16%. A company comfortably inside the regime in 2025 on €200,000 of revenue is now outside it, paying 16% corporate tax plus 16% on distributions.
Bulgaria held
Bulgaria joined the eurozone on 1 January 2026 at the fixed rate of 1 EUR = 1.95583 BGN, so accounting and filings are now in euro. A proposal to double dividend tax from 5% to 10% appeared in the draft 2026 budget and was dropped from the revised draft in December 2025. The rate remains 5%.
If you read that Bulgaria now charges 10% on dividends
That figure came from the draft budget, not from the law. Several comparisons published this year repeat it. The dividend rate in force in 2026 is 5%, and the gap between the two jurisdictions widened this year rather than narrowing.
What the rate tables leave out
Banking reality and substance risk
Registration is the easy part in both countries. The bank account is where timelines actually slip.
In Bulgaria, expect 2–4 weeks for a business account as a non-resident owner, and expect the bank to ask what the company does, who the customers are, and where the money originates. Accounts can be opened in person or through a power of attorney; we hold banking powers of attorney with UBB and UniCredit for exactly this reason. Banks decline applications where the business model is unclear, where the owner has no connection to the region, or where the stated activity does not match the documents.
Romania is broadly comparable and often slower for non-resident owners, with more banks preferring the director to appear in person. Neither country is a jurisdiction where an account appears automatically because the company exists. Budget for the delay in both, and do not sign customer contracts that assume an account on day one.
Substance and permanent establishment
A Bulgarian company does not make Bulgarian tax apply to you. Where the company is actually managed determines where it is taxed, and a registered address with no decisions taken behind it is the weakest possible position in an audit.
The practical test is simple: if the director lives in Romania, signs contracts in Romania and makes every commercial decision in Romania, Romanian authorities have a reasonable basis to treat the company as Romanian tax resident under place-of-effective-management rules. The fact that two countries have a treaty does not mean every arrangement automatically receives the lower rate — treaty relief usually requires proof of residence and beneficial ownership, and procedural steps taken in advance.
Real substance means a real office or a genuine service agreement, decisions documented as taken in Bulgaria, a local bank relationship used for actual operations, and accounting maintained to Bulgarian standards. That typically costs €20,000–€40,000 per year for a properly resourced small structure. Below a certain profit level that cost exceeds the tax saving, which is the honest reason not every business should move. Our note on Bulgarian tax residency covers the documentation side.
If you take a salary
Payroll works in opposite directions
Most owner-managed companies pay some salary, and the Romanian micro regime forces the question because it requires at least one employee. Take a gross salary of €2,000 per month — €24,000 per year — paid to the owner-director in each country.
| Bulgaria | Romania | |
|---|---|---|
| Contribution base | Capped at €2,300 per month, so the full €2,000 is charged | No equivalent cap on the employee side |
| Employer cost on top | 18.92%–19.62% ≈ €4,540–€4,709 per year | 2.25% work insurance ≈ €540 per year |
| Employee contributions | 13.78% ≈ €3,307 per year | 25% CAS + 10% CASS ≈ €8,400 per year |
| Income tax | 10% flat | 10% flat |
| Total cost to company | ≈ €28,540–€28,709 | ≈ €24,540 |
Romania is cheaper for the company and more expensive for the person. Bulgaria loads the employer and caps the base, which is why Bulgarian payroll gets structurally cheaper as salaries rise above the cap — a director on €5,000 per month pays contributions on €2,300, not on €5,000. In Romania the 25% and 10% keep applying.
The practical consequence: Bulgaria is the better structure for a well-paid founder, Romania for a low-paid workforce. If your plan is one director on a high salary, Bulgaria wins twice — once on the cap and again on dividends. If it is fifteen people on modest salaries, Romania’s employer-side structure is the lighter one.
Ongoing obligations
Cost of running the company, entity type and VAT
Company tax is annual and visible. Compliance cost is monthly and easy to underestimate.
A small Bulgarian company with modest transaction volume typically runs €1,200–€3,000 per year in bookkeeping, annual financial statements and filings with the National Revenue Agency. Add VAT registration and EU sales reporting and the upper end rises. Romania is broadly similar at €1,500–€3,500, but the RON reporting currency adds conversion work for a business invoicing in euro — a real recurring administrative cost rather than a theoretical one.
Accounting cannot be an afterthought in either country. Bulgaria’s flat 10% is only useful if the books are clean enough to apply it without penalties. Our bookkeeping service is priced on transaction volume, and government fees, translations and notary costs are billed separately.
EOOD or SRL
Bulgaria’s single-member limited company is the EOOD; with two or more shareholders it is an OOD. Romania’s equivalent is the SRL. Both give limited liability, both can be owned by a non-resident, and both have effectively symbolic minimum capital.
The meaningful differences are operational. The EOOD now keeps its books in euro, which removes an entire layer of conversion for a business that invoices in euro. The SRL reports in RON. And the Romanian micro regime requires at least one employee, which means a payroll obligation and its contributions from the start — a fixed cost that a one-person Bulgarian EOOD does not carry.
VAT and EU trade
Both countries are inside the EU VAT system, so intra-community supply rules, reverse charge and OSS work the same way from either base. Bulgaria’s standard VAT rate is 20%; Romania’s is 21%, with an 11% reduced rate on food, medicines, books and accommodation.
For an e-commerce seller the more important question is where stock sits, not where the company is registered. Goods stored in Germany create German VAT obligations. Inventory in Romania creates Romanian ones. Neither a Bulgarian nor a Romanian company removes that — it only determines where your home filing sits. See our guide on VAT registration in Bulgaria.
If you already have an SRL
Moving an existing Romanian company
A company already registered in Romania cannot simply be relocated to Bulgaria. There is no button that changes the jurisdiction of an SRL. In practice there are three routes, and they are not equally sensible.
Incorporate and migrate
Form a new Bulgarian company and move the business into it — contracts, customer relationships and bank flows — then wind the Romanian company down once its obligations are settled. Clean, but a real project: customers must re-contract, and Romanian VAT registration and payroll must be closed properly rather than abandoned.
Cross-border conversion
Legally available under EU company-law rules, but slow and disproportionately expensive for a small company. It makes sense when there is genuine value inside the existing entity that cannot be recreated.
Keep both
Retain the Romanian company and add a Bulgarian one for specific functions — holding, IT, or a product line. This works when there is commercial logic for the split, and creates transfer-pricing questions when there is not.
Whichever route, timing matters more than founders expect: a Romanian micro company that crosses €100,000 of revenue mid-year moves to 16% from that quarter, so the trigger point is often the moment the comparison becomes urgent.
Who this comparison is not for
A Bulgarian company is not suitable if your customers, staff and operations are all in Romania and you have no intention of establishing anything real in Bulgaria — the structure will not hold up. It is not suitable if annual profit is small enough that €20,000–€40,000 of substance cost outweighs the tax difference; below roughly €60,000–€80,000 of distributed profit the arithmetic often stops working once real costs are counted. And it is not a solution to an existing Romanian tax problem — moving a company does not resolve liabilities that already exist.
Frequently asked questions
Bulgaria vs Romania — common questions
Is Bulgaria or Romania cheaper for taxes?
Bulgaria, in almost every case where profit is distributed to the owner. On €100,000 of profit taken as dividends, total tax is about €14,500 in Bulgaria against €31,294 in Romania. Romania is cheaper only while profit stays inside a micro company, where 1% of turnover can beat 10% of profit.
What is the corporate tax rate in Romania in 2026?
The standard Romanian corporate income tax rate is 16%. Micro-companies with revenue up to €100,000 and at least one employee pay 1% of turnover instead. Above that revenue, 16% applies from the quarter in which the threshold is exceeded.
Did Romania change the micro-company rules in 2026?
Yes. From 1 January 2026 the revenue threshold fell from €250,000 to €100,000 and the 3% bracket was abolished, leaving a single 1% rate. Dividend tax rose from 10% to 16% at the same time, which affects every micro company that distributes profit.
What is the dividend tax in Bulgaria in 2026?
Dividend tax in Bulgaria is 5% in 2026. A proposal to raise it to 10% appeared in the draft budget and was removed from the revised draft in December 2025, so the 5% rate continues to apply to distributions to both residents and non-residents.
Can I open a Bulgarian company if I live in Romania?
Legally yes, but it may not achieve what you expect. If the company is managed from Romania, Romanian authorities can treat it as tax resident there under place-of-effective-management rules. The structure works when management, decisions and substance are genuinely located in Bulgaria.
How long does it take to register a company in Bulgaria?
Registration takes 3–7 business days once documents are notarised. The delay is usually the bank account, not the registry — expect 2–4 weeks for a business account as a non-resident owner.
Does a Romanian micro company have to have an employee?
Yes. The micro regime requires at least one employee, which creates a payroll obligation and contributions from the start. A single-member Bulgarian EOOD has no equivalent requirement, so a one-person business carries a lower fixed cost in Bulgaria.
Is Bulgaria in the euro?
Yes, since 1 January 2026, at the fixed conversion rate of 1 EUR = 1.95583 BGN. Company accounting and tax filings are now in euro, which removes currency conversion for businesses that invoice in euro. Romania continues to report in RON.
Verdict
Which one should you choose?
If you take profit out of the company, Bulgaria is the cheaper jurisdiction by a wide margin — roughly €16,800 per year on €100,000 of profit, and the gap grows with profit. If you retain profit inside a company with under €100,000 of revenue, Romania’s 1% micro tax is genuinely cheaper, and you should not be talked out of it.
The decision that actually matters is not the rate. It is whether your business can support real substance in the country you choose. A Bulgarian company managed from Romania is an expensive way to create a tax dispute.
Start with your figures, not with a headline rate
Send your profit, margin, residence and how you take money out. We will run the same calculation on your numbers and tell you whether the move is worth making — including when it is not.
Sources and methodology
Where every figure comes from
Every rate in this comparison was checked against a primary or Big-Four source on 15 August 2026. Where sources disagreed, the more authoritative one was used and the disagreement is stated in the text.
- PwC Worldwide Tax Summaries — Bulgaria, corporate income tax (10% rate)
- PwC Worldwide Tax Summaries — Bulgaria, withholding taxes (5% dividend, section reviewed 2 August 2026)
- PwC Worldwide Tax Summaries — Romania, corporate income tax (16% CIT; €100,000 micro threshold, previously €250,000)
- PwC Worldwide Tax Summaries — Romania, individual income (16% dividend tax; CASS thresholds RON 24,300 and RON 97,200)
- PwC Worldwide Tax Summaries — Romania, VAT (21% standard, 11% reduced)
- National Revenue Agency of Bulgaria (NRA)
- Romanian National Agency for Fiscal Administration (ANAF)
- Bulgarian Registry Agency — Commercial Register
- Romanian National Trade Register Office (ONRC)
- ECB euro reference exchange rate, RON — 5.2427 RON/EUR on 14 August 2026
- European Commission — Taxation and Customs Union
All comparisons assume a single owner, a founder-managed company, profit fully distributed unless stated, no salary drawn, and no double-tax treaty relief applied. Contributions are shown at statutory rates without industry risk loading. Figures are rounded to the nearest euro. These are worked examples for comparison, not tax advice for a specific business — the correct answer depends on where you live, where the company is managed, and what the company actually does.
Last updated: August 2026.
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Daniel Malbašić is a business expert with extensive experience in the field of business consulting, organization and business optimization. His expertise includes market analysis, strategic planning, and implementation of effective business solutions. Daniel is dedicated to helping companies grow and improve their operations, providing them with comprehensive support in making key business decisions.