The Freelancer plan is for you if you're running a solopreneur business mostly based on providing a service and don't have to think about liability issues.
It's a great plan because you get a 25% tax cut "no questions asked" without submitting any expenses. No keeping track of receipts, not annoying questions from tax accountants about missing details on such receipts.
However, it's a bit more expensive and takes a little while to set up. Also you need to have long term residency in Bulgaria.
In our view this is the option you should go for if your business and your life plans allow it. You should be committed to Bulgaria as your base.
The Freelancer plan represents the self-employment status in Bulgaria. As a Freelancer you're truly independent. You're billing your clients completely on your own. You're not working on top of the co/company Business as a Service platform.
Although you're self-employed, though, you'll not only pay taxes, but are also making regular social security contributions. This might be unlike how freelance business is handled where you're coming from.
We think the Bulgarian tax system is smart in that it grants you a 25% tax reduction "no questions asked" if you waive the habit of try to reduce your taxes by deducting all kinds of expenses. Think of it: The low Bulgarian income tax of 10% gets even lower; as a Freelancer you only pay 7,5% income tax.
But that of course only makes sense if your expenses are lower than 25%. Or maybe even if they were somewhat higher it still would be a good deal because of less paperwork on your side.
You business will automatically get VAT registered.
You stay fully independent as a self-employed solopreneur. co/company does not impose any limitations on your business because you're not using it as a platform, but just as a service to get you going in Bulgaria.
With the self-employment status can focus more on your business because there's no paperwork regarding business expenses. If you're impression is that your expenses are lower than 25% anyway, then that's a real treat compared to how other countries handle it.
Being fully independent as a Freelancer has many advantages. We clearly encourage you to think about this plan for all its simplicity and tax benefits.
However... all this independence comes with the price of full liability. If something goes wrong in your business - you have to pay a contractual penalty fee or loose revenue and still have to pay a large expense - all of your private assets are on the line.
In many businesses that's not really a risk. But in some it is. Just think carefully about this: the self-employment convenience has its price.
The fee covers the monthly accounting service and all other co/company benefits.
Get in touchAt the end of the year an annual tax declaration has to be submitted. The co/company experts will do that for your.
Unfortunately for getting the self-employment status in Bulgaria some interaction with authorities is required. co/company is happy to provide that service for you and we're trying hard to save you any trips to the authorities or notary offices.
As a Freelancer you have to pay taxes and social security contributions every month. Registering as a Freelancer has the great advantage that you can deduct 25% of your income as expense. If you don't have expenses, you'd pay only 7.5% tax on your income effectively. To help you calculate what that means in terms of "money in your pocket", you can run your numbers through the calculator here.