holding company

Bulgarian legislation enables the investor to utilize the most favorable EU tax regime

Dutch sandwich

Do you remember the famous “Dutch sandwich“? No, don’t think about your lunch today. We mean the famous company structure that was so actively used in the years prior to when Bulgaria joined the EU (2007). It was basically a corporate business unit that was used internationally, mostly by US and Israeli multinationals to move untaxed profits to non-EU tax havens. For ultimate legal compliance, these profits were then re-routed to EU corporate oriented financial centers, such as Luxembourg and Ireland.

It was in fact, the Dutch ex-minister Joop Wijn, who invented and introduced the “Dutch Sandwich” to the world. And it worked like a charm, for many years. Until the world decided that anything that is related, even the slightest, to the offshore world, needs to be banned.

The offshore world couldn’t sink in one day only though. The business struggled to keep, at least some of its freedoms, afloat. To no avail. Cyprus had to “haircut” its clients deposits. Many say it was just a nominal price to pay for being an “old timer” in the offshore world. Then there were the “offshoreleaks”, the Panama papers”, etc. Everyone who has ever did anything “offshore” had a reason to be scared. The EU and USA tax authorities started the war against the offshore business.

The result of the war was easy to predict

The war was short-lived. The offshore business simply died. And the world needed a new solution, for quite some time….

The solution – the year is 2009

The solution came in 2009 when Bulgaria, already a member of the EU has lowered its corporate and personal tax rate to the unprecedented level of 10%. This in fact, placed Bulgaria next to the ex-offshore centers, but as fully fledged EU member state. Many considered the 10% tax on profits to be as low as non-existent. And we fully agree with that.

The Bulgarian holding Company

N. Minkova
Neli Minkova – legal compliance

The Bulgarian holding company is not restricted from doing business in Bulgaria. On the contrary, it enjoys the same liberties and low tax treatment and easy accountancy and administration as every other Bulgarian trading company. The added value is however that it is used as holding company of a foreign (ie, American, Israeli, EU and non-EU companies) entities. The result is much lower tax on dividends and much better tax administration. The result is ultimate legal and tax compliance alongside with much lower tax bill.

For the particularities of the arrangements for the Bulgarian Holding Company, we urge our readers to contact Euroformat – the leader in Company formation in Bulgaria.

Utilizing Bulgarian holding company for residence permit in Bulgaria

The Bulgarian Holding company can be of course utilized to arrange residency permit in Bulgaria. Either for its owners, in case they hire 10 Bulgarian employees, or for the employees, after obtaining work permit from the Ministry. For more information, please visit http://www.posolstvo.eu/

2 Comments

  1. same procedure while TRO as possibilities for Permanent residency please explain me TRO through a same process

    1. Author

      Hello,
      Registration of TRO is different than HOLDING. If you need more assistance, please call our office telephone lines.
      Regards,
      Bulgarian-citizenship.org

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