Bulgaria Investment Hub Guide 2026
Bulgaria offers the lowest corporate tax rate in the EU (10%), a generous 150% R&D super-deduction, a competitive holding company regime, full EU single market access, and a strategic location at the crossroads of Europe and Asia.
Why Bulgaria as an Investment Hub
Bulgaria combines the lowest CIT in the EU (10%) with EU membership, offering investors full access to the EU single market of over 450 million consumers. The country is a member of the EU, NATO, and the WTO, and is pursuing OECD accession. The currency (BGN) is fixed to the EUR at 1.95583 under a currency board arrangement, providing monetary stability.
R&D Super-Deduction — 150%
Companies can deduct 150% of qualifying R&D expenses from taxable income. This provides an effective tax saving of 15% on every BGN 100 spent on eligible research and development activities. Qualifying expenses include salaries of R&D personnel, materials, equipment depreciation, and outsourcing to research institutions.
High-Value Employment — 50% Deduction
Employers can claim a 50% deduction on gross salary costs for employees in high-value-added positions (IT, engineering, scientific research, and innovation roles). This reduces the effective cost of employing skilled talent.
Holding Company Regime
Bulgaria offers an attractive holding company framework:
- 95% exemption on dividends received from EU/EEA subsidiaries
- Exemption on capital gains from disposal of EU/EEA subsidiary shares
- 0% WHT on dividends paid to EU parent companies
- No CFC rules for active business income
- No thin capitalisation rules (interest limitation under ATAD only)
IP Regime
Income from intellectual property (patents, software copyrights, know-how) is taxed at the standard 10% CIT. Royalties paid to EU companies qualify for 0% WHT under the Interest and Royalties Directive. The R&D super-deduction further supports IP creation.
Key Advantages
- Lowest CIT in the EU: 10%
- Micro-enterprise rate: 5%
- R&D super-deduction: 150%
- Full EU single market access
- BGN fixed to EUR (currency board)
- Over 70 DTTs
- No wealth tax, no inheritance tax
- Low cost of living and competitive labour costs