France
Bulgaria
Bulgaria's 10% corporate tax looks attractive from France, where companies pay 25%. For a founder who stays tax resident in France, the comparison is misleading: France taxes the dividends at its own rate, and it can tax the company itself if it is run from France.
What Bulgaria offers a French resident is an EU company with low running costs and a simple tax system, not a lower tax bill. This guide explains the treaty, the arithmetic and the risks.
What Bulgaria asks of a French founder
- No visa, no permit: an EU citizen can own, manage and live in Bulgaria.
- One owner and one manager, EUR 1 of capital.
- Apostilled documents with certified Bulgarian translations, or a trip to Sofia.
- A capital account at a Bulgarian bank before registration.
The steps are in how to register a company in Bulgaria.
What the 1987 treaty says
| Income from Bulgaria to a French resident | Treaty ceiling | Bulgarian domestic rate | What applies |
|---|---|---|---|
| Dividends to an individual | 15% | 5% | 5% |
| Dividends to a French company holding 15% or more | 5% | 0% for EU companies | 0% |
| Interest | No withholding | 10% | 0% |
| Royalties | 5% | 10% | 5% |
Relief in France: for dividends and royalties, France gives a tax credit equal to the Bulgarian tax withheld, capped at the French tax on that income.
Tax estimate
How much tax could you save?Three questions, then the yearly difference between your current rate and three jurisdictions.
The arithmetic for a French resident
| On 100 of Bulgarian profit | Amount |
|---|---|
| Bulgarian corporate tax, 10% | 10.00 |
| Dividend paid | 90.00 |
| Bulgarian withholding, 5% | 4.50 |
| French flat tax, 31.4% of 90 | 28.26 |
| Treaty credit for the Bulgarian 5% | -4.50 |
| Total tax on 100 of profit | 38.26 |
The lower Bulgarian corporate tax only helps while profit stays in the company, and that only works if the company is genuinely Bulgarian.
Risk one: the company is managed from France
Under French law and the treaty, a company whose management is in France is a French resident company. An EOOD run day to day from Lyon can be taxed in France at 25% on its whole profit.
- Decisions in Bulgaria: a manager who works there, minutes signed there.
- Substance: an office or staff, a Bulgarian accountant, a Bulgarian bank.
- A permanent establishment in France is a second risk if you work for the company from home with authority to sign contracts.
Risk two: Article 123 bis
Article 123 bis taxes a French individual on the profit of a foreign entity in which they hold 10% or more, if it is under a privileged tax regime and its assets are mainly financial. Bulgaria's 10% is less than half of France's 25%, so it counts as privileged. But:
- The rule does not apply to an entity established in the EU, unless the arrangement is artificial and aims to avoid French tax.
- An operating company with real activity in Bulgaria is outside its target in any case.
- A Bulgarian holding of investments owned from France is exactly what the rule watches.
- 1Where are decisions taken?In France: risk of French corporate tax
- 2Do you work for it from France with authority?Risk of a French permanent establishment
- 3Are its assets mainly financial?Article 123 bis is in view
- 4Is it a real EU business?The EU exception protects a genuine company
Filings in France
- Dividends in your French return, with the Bulgarian tax credit.
- Foreign accounts: form 3916 for accounts you hold or use abroad; check with your adviser whether your signing power on the company account is covered.
- Social security: if you live and work in France, you remain in the French system; see tax for non-residents.
When Bulgaria really changes the picture
The calculation changes if you move. A French citizen who becomes Bulgarian resident pays 10% personal tax and 5% on dividends, but leaving French tax residence has its own rules, including exit tax on large shareholdings. Plan that with a French adviser; living in Bulgaria is covered in non-resident founders.
The bottom line
For a French resident, a Bulgarian EOOD costs little to run but does not cut the tax on profit you take out: about 38 on 100, close to a French company. It makes sense for a real activity in Bulgaria or the region, managed there, or as a step towards moving. As a remote shell run from France, it risks French corporate tax.
corpsec registers the EOOD and provides its registered address. See the Bulgaria formation service, or read how Bulgarian corporate tax works.
Frequently asked questions
Can a French citizen open a company in Bulgaria?
Yes, with no visa or permit. An EOOD needs one owner, one manager and EUR 1 of capital.
Is there a tax treaty between France and Bulgaria?
Yes, signed on 14 March 1987 and in force since 1 May 1988. It caps dividends at 15% for individuals, removes withholding on interest and caps royalties at 5%.
How are Bulgarian dividends taxed in France?
At the flat tax, 31.4% from 2026, with a credit for the 5% withheld in Bulgaria. On 100 of company profit, the total is about 38.
Does Article 123 bis apply to a Bulgarian company?
Not to an entity established in the EU, unless the arrangement is artificial. It targets mainly financial entities under a privileged regime.
Can I run my Bulgarian company from France?
You can, but if management is in France, the company may be French resident and taxed at 25% in France.
Sources
- BOFiP, BOI-INT-CVB-BGR: France and Bulgaria tax convention signed in Sofia on 14 March 1987, in force on 1 May 1988; dividends 5% or 15%, no withholding on interest, 5% on royalties, credit equal to the tax withheld
- Actu-Juridique, La CSG en hausse sur les revenus du capital: social security law for 2026 raises CSG on capital income, bringing the flat tax to 31.4%
- CMS, Article 123 bis of the French Tax Code: holdings of 10% or more in foreign entities under a privileged tax regime, and the exception for entities established in the EU absent an artificial arrangement
- Richelieu International: the 1987 convention as modified by the multilateral instrument, including an anti-abuse clause, for withholding taxes from 1 January 2023
- Deloitte, Bulgaria Highlights 2026: 10% corporate income tax, 5% withholding on dividends, company residence based on registration
Official, read on 26 October 2026: the French tax administration's commentary on the France and Bulgaria convention (BOI-INT-CVB-BGR, version of 12 September 2012). Secondary: the 31.4% flat tax from the 2026 social security law as reported by Actu-Juridique and banks, whose transitional rules by type of income should be checked; Article 123 bis of the French Tax Code as summarised by CMS, not read on Legifrance on the day of writing. Our calculation assumes the flat tax and a full credit of the Bulgarian 5% against French income tax; the treatment of social contributions should be confirmed with a French adviser. This is not legal or tax advice.