Bulgaria or Cyprus for company and residency?

[ilpablo]

Being in both countries for many years. You are doing a mistake out of ignorance , because all the others are doing the same mistake. Dividents in cyprus are not taxable for no residents or get a 1 year exemption if you take a cyprus tax residency. That means that dividents are taxable in your own country and that country especially if EU when desires will take this information gladly from Cyprus and sh@t will hit the fan. Secondly , Cyprus is a tourists island so everything, especially real estate is inflated so in order to fix your domicile you pay a premium. Both Sofia and Cyprus (especially Limassol, paphos, larnaka) are villages but in Cyprus you will be completely landlocked. take this in mind if you have any special issues with your existence) . Bulgaria everything is cheaper but you will have a better understanding from people in your special needs, something for which you will have to spend $$$$$ in Cyprus because everybody is spoiled.

Hi! Thanks for sharing. So after these experiences what is your way to go? Is still one of these two or did you move somewhere else with a better setup?

I'd just like to add two observations about Cyprus:
- The climate is hot - very hot. This year it was above +32C still in mid-October. For people of e.g. Mediterranean origin, that might be completely OK, but many North Europeans/Scandinavians like this kind of weather only in small doses. Cyprus is like this almost six months/year.
- Cyprus city planning adheres to Anglo-Saxon model, where cities are built for cars, not pedestrians. Outside of very tiny old city quarters in Limassol, Paphos and Larnaca, you can't really walk anywhere. Streets are very wide; traffic is crazy and there's lots of it; parked cars block pavements; public transport options are weak. Most of European cities from West to East are quite walkable - Cyprus just isn't so, except for Nicosia. Many foreigners aren't bothered by this at all, some others are.

In my opinion the cities, lifestyle, climate, food etc. in Cyprus are inferior to what can be arranged in e.g. Spain/Portugal/Canaries. I've lived in Cyprus for 1½ years now, and looking for an exit already.

Hi, i was considering Cyprus for myself. So Thanks for sharing. Where would you move next?

hello from the...shithole as some members write. Cyprus accountants and lawyers are full of s**t, bulgarian accountants ate full of s**t too. Difference is that in Cyprus they ask for 3-4 times more than in Bulgaria and even if you confront them will real clues for what is going on and what the tax law really writes, they will stick to their story, because this is what they are really selling, bulls**t...An other thing, If you go to an accountant s office and has this table for board meetings as all in Cyprus do ( and a few in bulgaria) RUN away !!! For all your needs residency, tax residency, house etc in Cyprus they are going to ask for an arm and leg because their bellies are full and one client less they wouldn t care. Language is a barrier in Bulgaria, so it s more convenient for people of russian speaking countries and there are a lot of them here. It is not Monaco nor Andorra , but trust me you are not chained here, when you finish your business you are free to go. Last but not least bulgarians love to hang out , there are a lot of nice cafes, clubs and restaurants .

May i ask you why did you choose Bulgaria instead of Romania for example?

Lydras basically it s where all the action is but you can walk in all the other towns also I mean Larnaca has a great promenade at the beach. What I think our friend wants to write is that cyprus lacks serious public transportation. There are no trains, few public buses and few taxes that are expensive. And it s a small place after 2 weeks you already know everybody except tourists that come and go. My 2 c

Yes but in Cyprus you need to stay for 60 days a year in order to keep the tax residency. It's not kind of a big deal.

 

[CyprusLaw]

Hi! Thanks for sharing. So after these experiences what is your way to go? Is still one of these two or did you move somewhere else with a better setup?


Hi, i was considering Cyprus for myself. So Thanks for sharing. Where would you move next?


May i ask you why did you choose Bulgaria instead of Romania for example?


Yes but in Cyprus you need to stay for 60 days a year in order to keep the tax residency. It's not kind of a big deal.

The fact that compared Limassol to Sofia is bizzare. Also, Ledras ‘is whete all the action is’, Ledras is considered dangerous, it’s where all the drugs and prostitutes are, so I am curious why would someone make this comment...
Limassol is full of luxury hotels ans restaurants, great beach bars, with a casino opening this year. Larnaca is getting upgraded at the moment and the region has beautiful beaches.

 

[ilpablo]

The fact that compared Limassol to Sofia is bizzare. Also, Ledras ‘is whete all the action is’, Ledras is considered dangerous, it’s where all the drugs and prostitutes are, so I am curious why would someone make this comment...
Limassol is full of luxury hotels ans restaurants, great beach bars, with a casino opening this year. Larnaca is getting upgraded at the moment and the region has beautiful beaches.

They will open a casino in Limassol? When? They will organize poker tournaments?

 

[CyprusLaw]

They will open a casino in Limassol? When? They will organize poker tournaments?

It will probably be delivered bt the end of the year - City of Dreams Mediterranean

 

[CyprusLaw]

Another point is that even after becoming a Cyprus tax resident you are exempted from sdc/tax on dividends for 17 years, not 1 year as has been mentioned in a previous post.

 

[uplana]

Another point is that even after becoming a Cyprus tax resident you are exempted from sdc/tax on dividends for 17 years, not 1 year as has been mentioned in a previous post.

You need to move to Cyprus correct?

 

[CyprusLaw]

You need to move to Cyprus correct?

Dividends are always exempt at Cyprus level for non dom individuals, but you may be liable to pay income tax on the dividends in the jurisdiction of your tax residency. But if you get the Cyprus tax residency (through the 183 days or 60 days rule) you maintain the non dom status for 17 years.

 

[PaulKruger]

Dividends are always exempt at Cyprus level for non dom individuals, but you may be liable to pay income tax on the dividends in the jurisdiction of your tax residency. But if you get the Cyprus tax residency (through the 183 days or 60 days rule) you maintain the non dom status for 17 years.

thank you for refreshing the tax rules in Cyprus. I read from a few guys around here that it wasn't the case. Once I asked some accountant in Cyprus he said it is still as you say.

 

[CyprusLaw]

thank you for refreshing the tax rules in Cyprus. I read from a few guys around here that it wasn't the case. Once I asked some accountant in Cyprus he said it is still as you say.

Unfortunately a lot of people are spreading false information either because they have been misinformed or because there incentives lie elsewhere

 

[drspak]

Unfortunately a lot of people are spreading false information either because they have been misinformed or because there incentives lie elsewhere

Hello
you can contact me privately i am interested in cyprus

 

[Maolaoadviser]

you meed to fix your residency and tax residency to be 100% foolproof against the tax office. Bulgaria would be a cheaper , easier, more discrete solution. I will disagree on one point though, real estate especially in Sofia is in a very bad state and extremelly invflated prices. You can find something just for the papers, but not something a normal westerner can live. All other places are almost deserted, everybody left for Sofia or abroad.

Hi, do you know anything about Bulgaria's 183 day stay resident requirement? How can i avoid that and still be considered a resident of Bulgaria for tax purposes

 

[Vampp]

1% Income on company (up to 1 mil E yearly / company), 5% dividends in Romania.

For a fee, I can setup your residency (remote) and you don't even have to live here if you don't want to.

Hit me up if interested.

 

[Vampp]

Hi, do you know anything about Bulgaria's 183 day stay resident requirement? How can i avoid that and still be considered a resident of Bulgaria for tax purposes

Romania is way better, you can live here if you want or not. The country does not track your movements.
Hit me up with details so I can offer a more personalized solution.

Yes, some of the businesses are standard, but some require more attention depending on nature of your business.

 

[Ade]

Hello, I'm an EU citizen and considering of Bulgaria or Cyprus for a company and having residency there. My clients are in the EU, I'm currently billing them with a UK company (consulting services).
Let me list some pros and cons of each country, feel free to add to this list and with personal experiences (I have seen many people in the forum mentioning Cyprus, but not a lot Bulgaria).

Bulgaria:
+ : 10% company flat tax + 10% personal tax for distributing income from the company.
+ : You can have European insurance for really cheap, and then you can add private insurance if you wish.
+ : You can have a very cheap residency, outside of Sofia. You can even buy a flat in the mountains if you like skiing, for less than 300Eur/m2.
+ : Close to Europe with planes, plus you can say you were visiting with a car in case of control for the 6-month residency.
- : Official language is Bulgarian, do you need to translate the documents?
- : Trustful banks? Euro is not the official currency, which may cause issues.
- : Regulation and what if there are some unknown rules/taxes etc.

Cyprus:
+ : 12.5% company tax, no tax on distributed dividends.
+ : Can provide more options for secrecy.
+ : Euro is the official currency.
+ : English is an official language.
- : More expensive for residency, especially if you want to buy property
- : Weird situation with Turkey and neighbors
- : Far from Europe, lack of planes from main EU cities
- : Untrustful banks (see what happened in 2012-13)
- : If you want insurance, you need a salary which can be more expensive than Bulgaria

If anyone has personal experiences, please share them!

Hey, I know this thread is quite old but I was wondering how you decided and whether you are happy with your choice as I'm in the same situation.

To add to your list from what I read so far:
- Cyprus requires a minimum stay of 60 days per year while Bulgaria seems to be quite easy on this (if you'd like to travel a lot that would be beneficial)
- Company formation and taking tax residency is a lot more expensive in Cyprus compared to Bulgaria (I would say in average around 5-6x as much)
- cost of living seems to be higher in Cyprus
- Sofia has a better connection to Western Europe compared to Cyprus (close, more flights and cheaper)
- Air pollution seems to be an issue in Sofia, on the other hand Bulgaria seems to offer a wonderful nature
- debt to GDP (2023) in Bulgaria is extremely low with ~20% | in Cyprus its ~80%
- Bulgaria charges 5% tax on dividends, Cyprus charges 0% tax but 2,65% for Gesy

In my opinion the cities, lifestyle, climate, food etc. in Cyprus are inferior to what can be arranged in e.g. Spain/Portugal/Canaries. I've lived in Cyprus for 1½ years now, and looking for an exit already.

Thanks for sharing your experiences! May I ask where have you moved to?

 

[Dandyline]

Hey, I know this thread is quite old but I was wondering how you decided and whether you are happy with your choice as I'm in the same situation.

To add to your list from what I read so far:
- Cyprus requires a minimum stay of 60 days per year while Bulgaria seems to be quite easy on this (if you'd like to travel a lot that would be beneficial)
- Company formation and taking tax residency is a lot more expensive in Cyprus compared to Bulgaria (I would say in average around 5-6x as much)
- cost of living seems to be higher in Cyprus
- Sofia has a better connection to Western Europe compared to Cyprus (close, more flights and cheaper)
- Air pollution seems to be an issue in Sofia, on the other hand Bulgaria seems to offer a wonderful nature
- debt to GDP (2023) in Bulgaria is extremely low with ~20% | in Cyprus its ~80%
- Bulgaria charges 5% tax on dividends, Cyprus charges 0% tax but 2,65% for Gesy


Thanks for sharing your experiences! May I ask where have you moved to?

One plus with Bulgaria is that you can take money as monthly salary (from 10-20k/month) for the same rate as dividends, around 12-13%. So no need to wait 1+ year for dividends.

And it's now in Schengen, so you don't need to live there, just have your residence there and live for example In Spain.

 

[CyprusLaw]

One plus with Bulgaria is that you can take money as monthly salary (from 10-20k/month) for the same rate as dividends, around 12-13%. So no need to wait 1+ year for dividends.

And it's now in Schengen, so you don't need to live there, just have your residence there and live for example In Spain.

You do not need to wait for one year to take dividends in Cyprus

 

[JohnLocke]

You do not need to wait for one year to take dividends in Cyprus

How often can you take out the dividend in Cyprus if you now mind to enlighten us ?

And it's now in Schengen, so you don't need to live there, just have your residence there and live for example In Spain.

You mean the rule. living in the country where you pay tax at least 185 days don't apply because of the Schengen agreement ?

 

[polonieth]

Hey, I know this thread is quite old but I was wondering how you decided and whether you are happy with your choice as I'm in the same situation.

To add to your list from what I read so far:
- Cyprus requires a minimum stay of 60 days per year while Bulgaria seems to be quite easy on this (if you'd like to travel a lot that would be beneficial)
- Company formation and taking tax residency is a lot more expensive in Cyprus compared to Bulgaria (I would say in average around 5-6x as much)
- cost of living seems to be higher in Cyprus
- Sofia has a better connection to Western Europe compared to Cyprus (close, more flights and cheaper)
- Air pollution seems to be an issue in Sofia, on the other hand Bulgaria seems to offer a wonderful nature
- debt to GDP (2023) in Bulgaria is extremely low with ~20% | in Cyprus its ~80%
- Bulgaria charges 5% tax on dividends, Cyprus charges 0% tax but 2,65% for Gesy


Thanks for sharing your experiences! May I ask where have you moved to?

Debt to GDP could change very quickly if BG joins the Euro. Hopefully they don't.

 

[Dandyline]

You mean the rule. living in the country where you pay tax at least 185 days don't apply because of the Schengen agreement ?

You can move freely within Schengen, they dont keep track of days. And it's not only the Physical presense that makes you residence.

In Bulgaria, tax residency is determined based on the following factors, so you can make sure to satisfy any of these to mantain tax residency:

1. Physical presence: An individual is considered if they spend more than 183 days in the country within a calendar year.

2. Economic ties: An individual is also considered a tax resident of Bulgaria if they have a permanent address in the country, own or rent property, or have family members living in Bulgaria.

3. Center of vital interests: An individual is considered a tax resident of Bulgaria if their center of vital interests is in the country. This can include factors such as where an individual’s business is based, where they hold a bank account
.
Under point 1, you will be considered a tax resident of Bulgaria only in the year when you have resided in the country for 183 days. On the other hand, you are not required to satisfy the strict residence requirement if you justify that the center of your vital interests is in Bulgaria.

You do not need to wait for one year to take dividends in Cyprus

If you start the company on let's say January 1st and begin generating profits immediately, when would it be possible to distribute dividends? I assume that dividends can only be drawn from audited profits accumulated in preceding years?

 

[Ade]

@Dandyline That wil be helpful for some, I guess. For me personally its not sooo important though. However I consider it a Plus for Bulgaria to have two options. Low CIT and low PIT.
@JohnLocke Shengen should not impact the residency rules but I guess he means its more difficult to prove how long you've been at one place. However Bulgaria seems to be easier on this than Cyprus. The problem in general is not the country where you pay taxes but the country where you avoid them. If you stay in Spain for a long time of the year you might run into trouble with Spanish authorities.
@polonieth I don't know what impact the Euro would have. At the end the lev is already fixed to Euro...The low debt to me is a nice-to-have. It gives me hope that the state is able to work with the taxes they receive.