Create a company in Cyprus — or move your company from Bulgaria

Bulgaria taxes company profit at 10% and dividends at 5%, which is 14.5% on money taken out — below Cyprus. That is the first thing an honest page for a Bulgarian founder has to say, because you already know it. What follows is the part nobody writes: where Cyprus still wins, and where the Bulgarian rules bite on the way there.

Updated for 2026 Cyprus tax law and regulations.

One partner for the Bulgarian exit and the Cyprus company you land in

Sumly is the one-stop, fully digitalized way to create a company in Cyprus, move a Bulgarian business onto it, and operate it from the first day it exists. We incorporate, open the books the day you order, prepare every Cyprus return box by box, and run the Yellow Slip and the tax residency and non-dom registration as fixed-price services. One dashboard, one provider, four published prices — rather than an адвокатска кантора for the incorporation, a счетоводна къща for the books, and nobody for the part where two tax systems hand over to each other.

This is Sumly — and what we actually do for you

Sumly is the fully digital provider for founders moving a company to Cyprus. You do not need to learn Cypriot company law, find a local auditor, or work out which form goes where. You get in touch, and we do the rest.

And we stay with you on both sides of the move. The Cyprus side we own outright. For the side you are leaving, we put you straight in front of an adviser or lawyer from our network who works on exactly your problem — company law, exit taxation, inheritance, employment — and we hold the thread between them and us. One point of contact for the whole move, however many specialisms your case turns out to touch. If your case is simple, we do all of it for a fixed price.

Part 1: What leaving actually costs you

Your home country does not let go the moment the plane does. What still runs after you have left, and in which order it has to be handled.

Is a Cyprus company cheaper than a Bulgarian one?

No, and pretending otherwise would waste your time. Bulgaria has the lowest headline corporate tax in the European Union and the arithmetic through to the shareholder's pocket is not close enough for a rate argument to carry this page.

The two rates are both current and both verifiable. НАП states the corporate rate directly: 10 per cent, under article 20 of ЗКПО. On distributions, the tax on income under чл. 194 — dividends and liquidation shares — is 5 per cent, and for an individual recipient the final tax rate on dividends is likewise 5%, under чл. 46, ал. 3 ЗДДФЛ.

Run €100 of profit through each system. Bulgaria takes €10 at the company, then €4.50 of the €90 distributed, leaving €85.50 in hand — a combined 14.5%, which is arithmetic derived from the two published rates rather than a figure either authority prints. Cyprus takes 15% from tax year 2026 at the company, and a non-dom shareholder then pays the health levy on the distribution. Bulgaria wins that comparison, and it wins the personal-income comparison too: the Bulgarian rate is 10% flat, and 15% for sole traders, against a Cypriot scale that reaches 35%.

So the rest of this guide is not an attempt to argue the number. It is the four places where the decision is actually made.

So where does Cyprus genuinely win for a Bulgarian founder?

In four places, and each of them is narrower and more conditional than the marketing suggests. Set out honestly, they are also more useful than a rate comparison, because they turn on your own facts rather than on a table anyone can copy.

Qualifying intellectual property. The IP Box brings the effective rate on qualifying income to 3% from tax year 2026, against Bulgaria's flat 10%. That is a factor of three, and it is the only rate on this page where Cyprus is ahead. It is also, as the next section explains, the one that Bulgaria's controlled-foreign-company rule is calibrated to catch.

The shareholder's own position. A Cyprus tax resident who is not Cyprus-domiciled pays no Special Defence Contribution on dividends for 17 years of Cyprus residence, and dividends sit outside personal income tax entirely. What is left is GeSY at 2.65% on income up to €180,000 a year — a ceiling of €4,770 whatever you distribute. That is not cheaper than 5% at small numbers. Above roughly €180,000 of distribution it becomes so, and it keeps becoming so.

A structure built for a future exit. Cyprus generally does not tax gains on the disposal of shares. But read the treaty section below before you build anything on that, because Bulgaria keeps its taxing right over gains on shares in Bulgarian companies, and no amount of Cyprus residence changes that.

The way the company is administered. English as the working language of business, banking, contracts and professional services; a broad treaty network for a founder building a multi-country group; and a residence route — the 60-day rule — that fits a founder whose Bulgarian residence has cleanly ended. On Bulgarian banking specifically we make no comparative claim: we found no official Bulgarian source on it, so there is nothing here to compare.

Why does the Cyprus IP Box collide with Bulgaria's CFC rule?

Because the CFC trigger is calibrated at exactly the level the IP Box produces. This is the most useful paragraph on this page and the one no competing comparison carries, so it is worth reading slowly.

ЗКПО чл. 47в treats a foreign entity as a controlled foreign company where the taxpayer, alone or with its associated enterprises, holds directly or indirectly more than 50 per cent of the voting rights or of the capital, or the right to receive more than 50 per cent of the profit, and where the corporate tax actually paid on those profits is lower than the difference between the tax that would have been charged under Bulgarian rules and the tax actually paid. That second limb is the same half-the-rate test used across the ATAD implementations. Half of Bulgaria's 10% is 5%.

So the tension is exact. The one feature that would make a Cyprus company beat a Bulgarian one on rate is the feature most likely to be pulled back into a Bulgarian taxable result. If you are caught, чл. 47г adds the entity's undistributed profit for the period, computed under Bulgarian rules, in proportion to your participation — and чл. 47д imposes a standing register obligation covering participations, attributed profits, losses, tax results and the tax actually paid in the foreign jurisdiction, produced to НАП on request. That register is a real, recurring compliance cost and it belongs in any honest comparison of running costs.

Does a Cyprus company run from Sofia become Bulgarian?

No — and this is the point where Bulgaria is unusually permissive, and where it differs sharply from most of its neighbours. It is worth stating clearly because founders arrive expecting the opposite answer.

ЗКПО чл. 3 defines local legal persons as those established under Bulgarian legislation, plus European companies with their seat in the country and entered in a Bulgarian register — and taxes them on their profits from all sources in Bulgaria and abroad. There is no place-of-effective-management limb in that definition. A Cyprus Ltd is not a Bulgarian resident because its director sits in Sofia.

The treaty reinforces it rather than undoing it. Where a person other than an individual is a resident of both states, the Bulgaria–Cyprus convention treats it as a resident of the state under whose laws it was incorporated. Incorporation again, not management.

That is not an all-clear, and we are not going to sell it as one. Чл. 4 of ЗКПО taxes foreign legal persons on profits realised through a place of business activity in Bulgaria and on Bulgarian-source income, and the treaty itself lists a place of management as the first example of a permanent establishment. Running the Cyprus company from Sofia is close to the textbook case of one. The difference is in what gets taxed: the profit attributable to that establishment, rather than the company's worldwide income. Cyprus's own view of whether the company is Cyprus-resident does turn on management and control, so the sensible answer on both sides is the same — genuinely manage it from Cyprus. Our guide to nominee directors in Cyprus covers where nominees help with that and where they do not.

Does Bulgaria charge an exit tax when you move to Cyprus?

The company-level charge is real and verified. On an individual charge we are not going to claim anything, in either direction, and the reason is stated below rather than hidden.

ЗКПО чл. 155 applies where the Republic of Bulgaria loses the right to tax the result of a subsequent disposal of transferred assets or activity, and one of the listed triggers is expressly a transfer of assets or activity on a change of the jurisdiction in which the taxpayer is resident for tax purposes, other than assets that remain effectively connected to a place of business activity in the country. The charge under чл. 155а increases the accounting result by the positive difference between market price and tax value at the moment of transfer, and that uplift bears the ordinary 10%.

Two features soften it. Чл. 155в carves out transfers of no longer than twelve months connected with securities financing, collateral, or prudential capital and liquidity management — with the charge applying if the assets do not come back. And чл. 155г allows the corporate tax due as a result of an incidental or irregular transfer to be deferred in instalments where the destination is an EU Member State or an EEA state, which Cyprus is. We are not printing a number of years for that deferral: the later paragraphs of чл. 155г were not read during this research, and a five-year figure borrowed from another country's implementation is exactly the sort of thing that turns out to be wrong.

On an individual exit charge, the honest position is this. The exit machinery in ЗКПО is a corporate regime by its own terms, and we found no personal equivalent — but the personal income tax act could not be opened directly during this research, so "Bulgaria has no individual exit tax" is not a statement we are prepared to publish as verified. Ask your Bulgarian adviser to confirm it against ЗДДФЛ before you rely on it.

How does Bulgarian tax residency end, and what is the постоянен адрес trap?

Through ЗДДФЛ чл. 4, which has four limbs, any one of which is enough on its own. The first of them is the reason otherwise careful founders stay Bulgarian tax residents for years after moving, and it has nothing to do with days.

НАП states the test plainly, and irrespective of citizenship. A person is a resident individual if they have a permanent address in Bulgaria; or reside in Bulgaria for more than 183 days in any 12-month period, counting the day of entry and the day of exit separately; or have been sent abroad by the Bulgarian state, its bodies or Bulgarian enterprises; or have their centre of vital interests in Bulgaria, assessed on family, property, place of work and the place from which property is managed. НАП adds that it makes a comprehensive assessment of the specific circumstances.

Read limb one again. It is not a factor weighed against the others. On the face of the text, a permanent address in Bulgaria is sufficient by itself — so a founder who moves to Limassol, spends three hundred days a year there, works there and pays there can still be caught, because the постоянен адрес was never deregistered. It is a civil-registration matter handled by the municipality rather than by НАП, which is precisely why nobody files it under "tax" and why it is the single most overlooked item in a Bulgarian departure.

We are going to be careful about the rest of the procedure. Bulgaria has no direct equivalent of the departure questionnaire some neighbouring countries use, so there is no single form to describe. Whether any notification obligation to НАП arises on ceasing residence, how the постоянен адрес is actually changed or removed, and whether Bulgaria applies any continuing-residence tail after departure, were not established against official sources in this research — so we describe none of them. What is verified and immediately usable is the consequence of getting it wrong: while you are still a Bulgarian resident, worldwide income is taxable, and a Cyprus dividend received in that window carries the 5% Bulgarian final tax, self-assessed in Приложение № 8 of the annual return, filed between 10 January and 30 April, with the tax paid by 30 April of the following year. Cyprus non-dom status does nothing for you until Bulgarian residence has genuinely ended.

What does the Bulgaria–Cyprus treaty actually give you?

Less on dividends than every comparison page implies, and something distinctly unhelpful on share sales. The instrument is the convention ratified in December 2000 and in force from 3 January 2001, and it is worth reading for what it takes away as much as for what it gives.

On dividends, nothing you need. Article 10 caps the source state at 5% where the beneficial owner is a company holding directly at least 25% of the paying company, and 10% in all other cases. Bulgaria's own domestic rate is already 5%, and a treaty never raises tax, so an individual Cyprus-resident shareholder of a Bulgarian ЕООД simply pays the domestic 5%. For a Cyprus company holding the shares there is a better answer than the treaty entirely: НАП confirms the withholding obligation is removed for dividends distributed to a foreign legal person that is tax resident in an EU Member State or in another state party to the EEA Agreement, subject to the anti-abuse provisions. Zero beats five. Anyone selling you the treaty on dividends has quoted the worse of the two routes.

On share sales, the treaty works against you, and this has to be disclosed. Article 13(4) provides that gains derived by a resident of one state from the transfer of shares or interests in a company resident in the other contracting state, other than those quoted on a recognised stock exchange, may be taxed in that other state. Only the residual rule at 13(5) — gains on any other property, which includes the shares of the Cyprus company itself — is exclusive to the state of residence. So a Cyprus-resident founder selling the Bulgarian ЕООД is still within Bulgaria's reach. The "move, then sell" plan does not work here. It works considerably better for a Romanian founder, whose treaty has no such clause, and if you have been reading a Romania page do not assume it transfers.

And the individual tie-breaker, which does work. Article 4(2) gives the ordered cascade: permanent home, then closest personal and economic ties, then habitual abode, then nationality, then mutual agreement. That is a genuine safety net for a dual-resident year.

One caveat we will not paper over: whether this treaty is a covered tax agreement under the multilateral instrument, and whether a principal purpose test now overlays articles 10 and 13, was not verified. Plan on the assumption that it does, because that test is an OECD minimum standard, and a real relocation is not what it was written to catch.

What happens to your existing ЕООД?

Three routes, and one verified fact that kills the most common assumption about the third.

Keep it and move only the shareholder. No чл. 155 charge, because nothing moves. Bulgarian profits stay at 10%. Distributions to you personally carry the domestic 5% withheld at source; distributions to a Cyprus company holding the shares carry nothing, under the EU and EEA exemption. The catch is the one above: treaty article 13(4) keeps Bulgaria's right to tax a later sale of those shares.

Migrate the ЕООД's tax residence to Cyprus. That is the чл. 155 trigger, charged on the market-value uplift at 10%, with the чл. 155г instalment deferral available because Cyprus is in the EU. Cheaper in rate terms than several neighbouring exit regimes, but it is still a real charge computed at market value, and on a valuable software or brand portfolio it is the largest line in the move.

Incorporate fresh in Cyprus and wind the ЕООД down. Here is the fact that surprises people: liquidation shares are inside the same withholding as dividends. НАП's statement that the rate on income under чл. 194 covers dividends and liquidation shares alike, at 5 per cent, means winding up the company is a taxable distribution event, not a tax-free unwind. On the mechanics of the liquidation itself — the Търговски закон procedure, the registry steps and the НАП deregistration sequence — we researched nothing against official sources and so describe nothing. Get that from a Bulgarian adviser.

What do Bulgarian social contributions cost, and what happens to your record?

Less than the percentages suggest, because the base is capped early — and that is a point for Bulgaria, not against it. A page that treated Bulgarian social security as a grievance would be arguing something false.

The ceiling is the thing to look at. НАП publishes the maximum monthly insurable income for 2026 as €2,111.64 from 1 January to 31 July, and €2,300.00 from 1 August to 31 December, with the minimum for a self-insured person moving from €550.66 to €620.20 over the same two periods, and НОИ confirms the same rebasing from 1 August 2026. Above roughly €27,600 of annual insurable income the marginal contribution cost falls away entirely. For a well-paid founder, Bulgarian social security is cheap in absolute terms.

The individual rates are published per fund rather than as a single figure, and we are going to leave them that way rather than adding them up for you: a self-insured person pays 19.8% for pensions if born before 1 January 1960 and 14.8% if born later, 3.5% for the general sickness and maternity fund, 5% to the universal pension fund for those born after 1959, and 8% for health insurance, paid in advance monthly on a chosen insurable income within the band and reconciled annually. Health insurance overall is 8% of insurable income, split 60:40 between the insurer and the insured, with a fixed monthly minimum for the self-insured of €22.03 to 31 July 2026 and €24.81 from 1 August.

On the pension record itself, НОИ distinguishes an independent pension from a proportional one, and states that where entitlement requires summing periods completed in another country, those periods are taken into account as if they had been completed under that country's legislation, counting only periods that do not overlap. Your Bulgarian years are not lost. What is worth planning is the health-cover handover: stop paying the self-insured minimum before Cypriot enrolment completes and you create a gap in rights, which is an ordinary administrative problem in March and a serious one in October. On the A1 certificate and the НОИ deregistration forms we did no research and make no claims.

Does the euro change the decision?

It removes one of the arguments for leaving, and a guide that skipped past that would be selling rather than explaining. Bulgaria adopted the euro on 1 January 2026, at the fixed conversion rate of 1.95583 leva to 1 euro. Currency risk, conversion cost and eurozone access were all real reasons a Bulgarian founder might once have looked at Cyprus. They are gone.

The transitional friction is genuine but temporary and worth naming as such. НАП's conversion methodology keeps obligations for periods ending before the changeover in leva, converts periods spanning the dual-circulation phase, and records all new obligations from 1 January 2026 in euro, with prescribed six-decimal division and rounding rules. Add the mid-year rebasing of the contribution thresholds on 1 August, and a founder running Bulgarian payroll across 2026 has two rebasings to handle in one year. That is a real cost of the year, not a reason to emigrate.

Part 2: What Cyprus gives you

This is the straightforward half, and the half we build end to end. What you actually get on the other side.

What does the Cyprus side look like for a Bulgarian founder?

One corporate rate, one relief that matters, and a shareholder layer that is nearly empty. The description is short, and after the section above the shortness is part of the point.

The company pays 15% on taxable profit from tax year 2026 — no bands, no turnover test, no regime to re-elect. Qualifying intellectual property is taxed at an effective 3% under the IP Box, subject to everything said above about the 5% CFC line. Then the distribution: a non-dom shareholder pays no Special Defence Contribution on dividends for seventeen years of Cyprus residence and no personal income tax on them, leaving only GeSY capped at €4,770. A domiciled shareholder would pay 5% on dividends from 2026 profits instead, which is why the non-dom registration is the step that carries the whole position.

Salary runs on a scale of 0% to €22,000 rising to 35% above €72,000 — worse than Bulgaria's flat 10%, which is a reason most relocating founders take a modest salary and distribute the rest. Compulsory VAT registration begins at €15,600 of taxable turnover, and the rate applied to standard-rated supplies is 19%. Cyprus levies no net wealth tax and no inheritance tax. If you want the two company types set against each other line by line rather than the departure process, that is a different page: Cyprus versus a Bulgarian company. The rest is in Cyprus non-dom status and Cyprus tax benefits for foreigners.

How does a Bulgarian founder become Cyprus tax resident, and does the Yellow Slip apply?

Through the 60-day rule in most cases — and yes, the Yellow Slip is open to you, because a Bulgarian citizen is an EU citizen.

One route is simply to be physically in Cyprus for more than 183 days in the calendar year. The other asks for far fewer days but a good deal more commitment on the ground, and it became easier in 2026: the old fifth condition was removed from the 60-day rule, leaving four. At least 60 days in Cyprus. No more than 183 days in any other single state. Holding, right through the year, a business, an employment or an office in a Cyprus tax-resident person. And a permanent home in Cyprus you own or rent.

For a Bulgarian founder there is a specific trap in that improvement. Dropping the "not tax resident anywhere else" condition makes Cypriot residence easier to acquire — but it does nothing to end the Bulgarian one, and ЗДДФЛ чл. 4's permanent-address limb keeps running in the background regardless of how many Cypriot conditions you satisfy. Acquiring Cyprus residence and ending Bulgarian residence are two separate projects, and only the second one stops the 5% final tax on your Cyprus dividends. A directorship of your own Cyprus company can be the office the third condition asks for, and the Cypriot lease satisfying the fourth is also the evidence of a genuine centre of vital interests.

Then the Yellow Slip — the document that puts your Cypriot residence on the record under free-movement rules. It says where you live; it says nothing about how you are taxed, and our guide draws the line between the two while Sumly files the application for you. The tax residency and non-dom registration is a different step again, at €750 a person, with the day counting set out in the 60-day rule guide.

Why do people choose Cyprus over other tax havens?

Because it is a place people want to live, which most of the low-tax alternatives are not. For a Bulgarian founder the tax is emphatically not the whole argument, so the rest of it matters more here than almost anywhere.

Very little violent crime happens here by European Union standards. The island runs in English in practice — business, banking, contracts, professional services and most official dealings — which is a working-language change rather than a cultural one for anyone already operating internationally. People from all over the world are here already, so nobody is the only foreigner in the room. Business and real estate are booming. Officialdom is open to people who want to do business, rather than treating trade as something that first has to be licensed. Groceries — meat, fruit, vegetables — are affordable. And the coast: a Cyprus winter still leaves you able to spend an afternoon at the beach, while the summers are the ones people cross the world to book.

Now the push list, which for Bulgaria is short and we are not going to pad it. Bulgarian tax rates have been stable, the recent structural changes have been EU-driven implementations rather than domestic revenue grabs, and the administrative load is genuinely light: Bulgarian-source dividends need no taxpayer filing at all, because the payer withholds. What actually moves a Bulgarian founder is narrower and more specific: qualifying intellectual property that a 10% flat rate does not reward; a group being built across several countries where a Cyprus holding company earns its keep; a shareholder position where the non-dom exemption on a large distribution beats a 5% final tax with no ceiling; and the ordinary human reasons — language, weather, schools, and being somewhere the rest of the world already comes to.

If none of those is you, staying in Bulgaria is a defensible answer, and we would rather say so than sell you a move that does not pay for itself.

Can a Bulgarian e-commerce brand run through Cyprus?

Yes, and the framing is operational rather than about market access — Bulgaria and Cyprus are both inside the single market and both now inside the euro, so nothing is being unlocked. What changes is the treatment of qualifying income and how much of the compliance runs itself.

The Cyprus company gets an EU VAT number that is verifiable in VIES, zero-rating on intra-EU business sales where the usual conditions are met, and one-stop-shop reporting for consumer sales anywhere in the bloc. Nothing about that is visible to your Bulgarian customers.

Volume is what breaks a store's books. A few thousand small transactions a month, spread over currencies and payment processors, each carrying a VAT treatment that depends on who bought and where they were — and then the fees, refunds and payouts that never line up neatly with the sales behind them. Sumly's Shopify and WooCommerce plugins land every one of those in the books with its Cyprus VAT code attached, so the return is a by-product of trading rather than a reconstruction job in the last week of the quarter. The VAT feature shows it building as the quarter runs.

Part 3: How the move runs

From the decision to the first invoice out of the Cyprus company: the order, the mistakes people make before you, and two calculations worked through in full.

What does the move look like, month by month?

Read this as a shape rather than a schedule, because the pace depends entirely on your own circumstances. The Bulgarian half has no single deadline to plan around — which is easier in one sense and more dangerous in another, because nothing forces you to finish it.

• Before you go — and this is where we start. We settle with you whether the IP Box is actually part of the plan, and we put the чл. 47в question to a Bulgarian adviser from our network first. They model чл. 155 if assets are moving, and if a sale of the ЕООД is on the horizon they take article 13(4) before it happens, not after.
• Month 1. We form the Cyprus company, with books open the day you order, and start the Yellow Slip. You sign a Cypriot lease in your own name. Your Bulgarian adviser opens the постоянен адрес question with your municipality — it is the slowest item and the one everyone leaves last, so we put it first.
• Months 1–3. We complete the Cyprus VAT registration and, where they apply, the social insurance, employee and UBO ones, and we get banking and EU payments moving. You take up the directorship, and we minute the decisions in Cyprus, for the Cypriot management-and-control test rather than the Bulgarian one.
• Months 3–9. You live there, and we accumulate the evidence with you: days, utility accounts, the Cypriot social insurance registration, the centre-of-vital-interests picture. We watch the health-insurance handover between the Bulgarian self-insured minimum and Cypriot enrolment.
• After the first full year. We apply for the Cyprus tax residency certificate and register your non-dom status. Until Bulgarian residence has genuinely ended, your Bulgarian adviser keeps declaring foreign dividends in Приложение 8 — the 5% is due whether or not anyone reminds you.

What mistakes do Bulgarian founders actually make?

Four, mostly, and none of them is exotic.

Leaving the постоянен адрес in place and staying a Bulgarian tax resident while believing otherwise. Building the whole plan around the Cyprus IP Box without noticing that its 3% effective rate sits under Bulgaria's 5% CFC line, and without settling the substance question that used to be answered by a paragraph now repealed. Moving to Cyprus a few months before selling the Bulgarian company and expecting article 13(4) not to apply. And assuming that winding up the ЕООД is a clean way out, when liquidation shares sit in the same 5% withholding as dividends.

A fifth is quieter and costs less but happens more: taking a Cyprus dividend in the transitional year without declaring it in Приложение 8, because the Bulgarian payer-withholds habit means nobody has ever had to file a dividend before.

Two worked examples

A consultancy at €200,000 of profit. Bulgaria wins, and here is the arithmetic. The company pays 10% — €20,000 — and the €180,000 distributed carries 5%, another €9,000, leaving €171,000. Through Cyprus, the company pays 15%, or €30,000, and a non-dom founder distributing the remaining €170,000 pays GeSY at 2.65%, about €4,505, keeping roughly €165,500. Bulgaria is ahead by around €5,500 a year on identical facts. If your business looks like this and nothing else in the guide applies to you, the honest recommendation is to stay.

A software company at €400,000 of qualifying IP income. In Bulgaria that is 10% at the company, €40,000, then 5% on the €360,000 distributed, another €18,000 — leaving €342,000. In Cyprus, income qualifying under the IP Box is taxed at an effective 3%, or €12,000, and the health contribution is capped at €4,770 however much is distributed, leaving roughly €383,200. That is a difference of about €41,000 in one year, and it grows with the income. It is also the profile where every warning in this guide applies at once: the effective rate is under the 5% CFC line, the substance escape could not be verified, and the structure only works if the shares are held in a way that keeps ЗКПО чл. 47в out of the picture and if your own Bulgarian residence has genuinely ended.

Both examples assume full distribution and headline rates, and neither prices the cost of running real substance in Cyprus. Your own numbers change the answer, which is what a meeting is for.

Part 4: Who does the work

You can do all of this yourself. Below is what that costs in time and in money, against what it costs to let us do it.

Do it yourself — or have Sumly do it

Both of these routes are real, and a good number of Bulgarian founders take the first one. The self-service route is the Registrar's forms and fees, a registered office you arrange yourself, VAT and VIES registration, provisional tax twice a year, annual statements, and books your auditor will sign off — layered on top of a cross-border move you are already running. The Sumly route replaces all of that with three prices: formation from €950 one-time, the software from €39 a month, and a Sumly certified bookkeeper at €390 a month, with books that open the day you order and every return prepared box by box.

The software alone runs the whole company from Cyprus or from Bulgaria: invoicing, AI double-entry bookkeeping that books documents itself, live open-banking feeds, every VAT, VIES, provisional and corporate return prepared box by box, live reports, a document inbox with its own email address, mobile receipt capture that books itself, multi-currency invoicing, team roles and the AI assistant — plus payroll at €15 per employee per month, IP Box tracking at €50 a month, Projects at €10 a month, and the e-commerce plugins.

Everything here is offered to everyone: a virtual address with PO box and digital mail scanning delivered wherever you happen to be; nominee director and secretary where the structure needs them; the Yellow Slip, which your EU citizenship makes available; tax residency and non-dom at €750 per person; and every registration — VAT, social insurance, employees, UBO — handled properly the first time.

Each of those is an extra, scoped to your case. Tell us what you need in the meeting and you get one clear package-deal offer covering all of it, the IP Box application included where it fits, since that is complex expert work and exactly the kind of thing that should be examined with you before anyone quotes it. No hourly billing, no surprises.

Sumly, a law firm, and a traditional bookkeeping firm

Law firm vs Sumly — and what happens when it gets complicated

Sumly is cheaper and faster, and we work WITH lawyers, not against them. When a case gets too complicated for what Sumly handles directly, we simply connect you with the right expert in exactly the legal field you need help in, and everything gets done according to best practice, always. Either way, it starts the same place: contact us.

For a Bulgarian founder that division of labour is especially important, because the two open questions on this page — the CFC substance escape and the individual exit position — are Bulgarian questions and need a Bulgarian answer. The Cypriot half is one provider, one dashboard and four prices we publish openly. That is what makes Sumly the best choice for Bulgarian founders creating a company in Cyprus and relocating their business to it.

Why is Sumly the best bookkeeping system for a Cyprus company?

Sumly is the best accounting software for a Cyprus limited company — because it is built for exactly one thing, Cyprus tax law: all 16 Cyprus VAT codes mapped to the official VAT return boxes, VIES and provisional tax native, not a localization. It is a claim we are happy to be held to, so here is the substance underneath it.

The two Cyprus-built alternatives a Bulgarian founder will be shown are Cybooks and Balabook. We meet their former customers every week, and what they tell us, again and again: workflows that made simple bookkeeping overly complicated, rough edges and glitches, support that left them waiting — a messy experience they were relieved to leave behind.

On every one of these checkable dimensions, Sumly leads. That is a factual comparison — not a matter of taste.

In plain words — best support, best bookkeeping software, best AI for bookkeeping, best bookkeeper, best prices, and all of it done easily. Rather than assert that, we publish it: Sumly vs Cybooks, Sumly vs Balabook, and, for the international tools, Xero, QuickBooks and Sage.

On the IP Box, one line is worth repeating, and for a Bulgarian founder it comes with the CFC caveat attached rather than as a headline: the IP Box is the largest single line in a Cyprus product company's tax position — and the easiest one to forfeit through bookkeeping that was never set up for it. The application starts as a conversation, which is one more reason the meeting comes first.

What happens when you get in touch

You do not need to have decided anything before you speak to us, and you do not need your paperwork in order.

1. The meeting. Fifteen minutes. You tell us what you own and when you want to move. We tell you which rules at home catch you, and what the Cyprus side costs.
2. We tell you what kind of case you have. If it is simple, we do all of it — company, books, residency, non-dom — at a fixed price. If it is not, we say so immediately and bring in the specialist it needs.
3. We start. The company is registered, your books open the same day, and you have one point of contact for the whole thing.

Questions Bulgarian founders actually ask

Frequently asked

Is a Cyprus company actually cheaper than a Bulgarian one?

On the headline rate, no. Bulgaria charges 10% corporate tax under ЗКПО чл. 20 and 5% on dividends under чл. 194, which is 14.5% on distributed profit. Cyprus charges 15%, and a non-dom shareholder then pays the health levy on top of that. The Cyprus case for a Bulgarian founder is not the corporate rate — it is the IP Box for qualifying income, the treatment of a future exit, the non-dom position for the shareholder, and the way the company is administered. We would rather open with that than have you find it in paragraph nine.

Does the Cyprus IP Box work for a Bulgarian founder?

It is the one place Cyprus beats Bulgaria on rate, and it is also the one place Bulgaria's CFC rule is aimed. ЗКПО чл. 47в catches a foreign entity where control exceeds 50% and the tax actually paid is below half the Bulgarian rate — half of 10% is 5%, and the IP Box effective rate of 3% sits under it. The genuine-activity escape that used to sit in чл. 47в, ал. 4 was repealed in February 2022 and we could not establish what replaced it. Check that with a Bulgarian adviser before relying on the IP Box.

Does a Cyprus company run from Sofia become Bulgarian tax resident?

No, and this is a genuine structural advantage. ЗКПО чл. 3 makes a company Bulgarian resident only if it was incorporated under Bulgarian law, and the Bulgaria–Cyprus treaty's company tie-breaker at чл. 4(3) also points to the state of incorporation rather than to effective management. What you risk instead is a Bulgarian permanent establishment, since the treaty lists a place of management as a first example of one. That taxes the profit attributable to the establishment, not the company's worldwide income.

Does Bulgaria charge an exit tax when I move to Cyprus?

The corporate one is real and verified. ЗКПО чл. 155 applies where Bulgaria loses the right to tax a later disposal, including on a change of the jurisdiction of tax residence, and the charge is the difference between market price and tax value, taxed at the ordinary 10%. Чл. 155г allows the tax to be deferred in instalments for transfers to an EU or EEA state, and Cyprus qualifies. On an individual exit charge we make no claim either way: the personal income tax act could not be opened directly during this research.

Can I keep a Bulgarian permanent address after moving to Cyprus?

Not if you want Bulgarian residence to end cleanly. ЗДДФЛ чл. 4 makes you a Bulgarian resident individual if any single limb applies, and the first limb is simply having a permanent address in Bulgaria. It is not weighed against your day count or your family ties — on its face it is sufficient by itself. That is the most commonly missed item in a Bulgarian departure, because a постоянен адрес is a civil registration matter rather than a tax filing, and nobody thinks of it as tax at all.

If I move to Cyprus and then sell my Bulgarian company, where is the gain taxed?

In Bulgaria, unless the shares are listed on a recognised stock exchange. Article 13(4) of the treaty expressly preserves the right of the state where the company is resident to tax gains on the transfer of its shares. Only the residual rule at 13(5) — gains on other property, including the shares of the Cyprus company itself — is exclusive to the state of residence. Moving to Cyprus shortly before a sale of the Bulgarian entity does not move the gain out of Bulgaria's reach.

Does the treaty reduce Bulgarian withholding on dividends?

Not usefully, and most pages get this backwards. Article 10 caps Bulgaria at 5% for a company beneficial owner holding at least 25% directly, and 10% in all other cases. But Bulgaria's own domestic rate on dividends is already 5%, and a treaty never increases tax — so an individual shareholder simply pays the domestic 5%. For a Cyprus corporate shareholder the domestic EU and EEA exemption removes the withholding obligation entirely, which is better than the treaty rate. The treaty adds nothing here.

What happens to my Bulgarian insurance record if I move?

It is aggregated, not lost. НОИ distinguishes an independent pension, where entitlement arises without foreign periods, from a proportional pension, where periods completed under another country's legislation are taken into account as if completed under Bulgarian legislation, with only non-overlapping periods counted. Your осигурителен стаж continues to count towards entitlement and Bulgaria pays its proportional share. The practical risk is the gap in health-insurance rights in the middle of the move, not the pension.

Does Sumly advise on Bulgarian tax?

No. Sumly builds and runs the Cyprus side: formation, books from day zero, Cyprus VAT, VIES, provisional and corporate returns, the Yellow Slip, and the tax residency and non-dom application. This guide quotes НАП's own published material so you can see the shape of the decision, but how чл. 47в applies to your structure — and what replaced the repealed substance escape — belongs to a Bulgarian adviser. Where a case needs one, we connect you with expert lawyers from our network.

Keep reading

• Every country's route to Cyprus — the departure guide for wherever you are now
• Cyprus versus a Bulgarian company — the two company types side by side
• Cyprus non-dom status — the 17-year exemption in detail
• The Cyprus 60-day rule — day counting and the residency certificate
• The Yellow Slip explained — the EU registration certificate, step by step
• What changed in the 2026 Cyprus tax reform
• How to register a company in Cyprus and what it costs

The calculator on this page uses headline rates, an assumed 10% annual return and full distribution of profit, so it shows the shape of the difference rather than your own result. Bulgarian figures are stated for 2026 and cited to НАП and НОИ; the 14.5% combined burden is arithmetic derived from the published 10% and 5% rates rather than a figure either authority prints, and no aggregate social contribution percentage is given because the funds are published separately. Cyprus figures apply from tax year 2026. All Sumly prices exclude VAT, and government expenses on a formation are invoiced separately once your application is approved.