Incorporation benefits

Incorporation can be viewed from many positive sides. We have put to your attention those our professionals consider to be the most important. Our goal is to show you a convenient vehicle to gain personal and business security, and monetary measurable benefits as well.

Limited liability - the major advantage for individuals when incorporate is the opportunity to protect their personal property (eg. home, car, family savings). Important feature of corporations and limited companies is that stakeholders are liable to the extent of their capital contribution to the business, compared to the unlimited liability of an individual.

Tax advantages - there is a substantial difference between corporation and personal income taxation in Bulgaria. Corporation tax is flat, set to 15% of the taxable profit, while the personal income tax is a progressive one and the percentage can reach a considerably greater number (three times), depending income bracket. Simple maths shows that it is more beneficiary to pay a corporate tax rather than a much higher personal income tax. Another important advantage is that Bulgaria tends to reduce corporate tax rate in order to support and encourage small and middle businesses to reinvest free cash.

Expenses deductability - business organizations can record and recognize in their accounting all expenses met. These expenses in most cases will reduce taxable profit thereafter. Contrary to companies individuals cannot reduce their income and have to pay tax on a larger basis. These legal principles can be used when different maintenance and depreciation expenses can significantly affect the real earning of the stakeholders.

In addition to those general advantages of incorporation, specifically for Bulgaria, this legal form is much more suitable for acquisition, maintenance and disposal of real estate.

Acquisition of real estate - the present legal framework in Bulgaria imposes regulations on real estate acquisition by foreign citizens. Foreigners can only buy buildings (eg. houses, apartments), but they cannot acquire rights over the land itself. Land can only be acquired by a Bulgarian legal entity, such as companies or Bulgarian nationals. Thus, the opportunity for foreign citizens to acquire rights over land spots is to register a company in Bulgaria and perform transactions through it.

Corporation property benefits - the procedures of acquisition and disposal of a company that is holding property are simpler than those for the property itself. Furthermore, the taxes paid for the transfer of ownership and local taxes are considerably lower for a company that is holding property than those for the property itself. Besides monetary benefits, companies are more easily transferred and inherited. In the long-run, future operations with company property are preferable to those with personal ownership.