Greek, Romanian firms find tax haven in Bulgaria

More and more Greek and Romanian companies register in Bulgaria, one of three EU countries with the lowest corporate taxes in the European Union

More than 272 Romanian companies are registered in Bulgaria and file their tax declarations there.

In 2006, one year before Romania and Bulgaria’s EU accession, only 33 Romanian firms were registered in Bulgaria.

Bulgaria’s low corporate tax rate of 10% has apparently encouraged this trend as Romania’s own rate reaches 16%.

But the number of Greek companies registered in Bulgaria appears to be much higher. Over the last year, 2,072 Greek firms have filed their tax declaration in Bulgaria.

The corporate tax rate in Greece is 25%.

According to the Romanian tax office, the fact that many firms decide to establish their headquarters in Bulgaria is due to the low tax rates, but also less burdensome procedures for setting up a business.

Experts say another factor could be the macroeconomic stability in Bulgaria and the fact that the national currency is pegged to the euro at a fixed rate.

Bulgaria’s lower wages and rents are also valuable attractions for investors.

However, Bulgarian Finance Minister Simeon Djankov believes this will not last for long, saying he expected income levels in Bulgaria to exceed Romania’s over the next two years.