Single-Member Limited Liability Company (EOOD) in Bulgaria — Drop Servicing Formation Guide
Choose a jurisdiction with strong payment gateway support (Stripe, PayPal) and low withholding taxes on foreign contractor payments, as you will be paying freelancers globally.
Last verified: June 13, 2026
Corporate Tax
10.0%
State Tax
0.0%
Formation Cost
$30
Annual Fee
$16
Forming a Single-Member Limited Liability Company (EOOD) in Bulgaria as a Drop Servicing means a total tax burden of 10.0% and an official formation cost of $30. This guide covers the steps, tax breakdown, banking options, and compliance requirements — all from verified data.
First-year total cost
≈ $2,060
Ongoing (per year)
≈ $1,400
Why Single-Member Limited Liability Company (EOOD) for Drop Servicing?
Drop servicing (or service arbitrage) involves selling digital services to clients and outsourcing the fulfillment to freelancers or white-label agencies. As a founder, your main focus is on marketing, sales, and client relationship management, while the actual work is handled by third parties.
Ideal for
- Marketers and sales professionals
- Entrepreneurs with strong networking skills
- Founders looking for location-independent businesses
- Those wanting to start an agency without technical skills
Challenges to watch
- Maintaining quality control over outsourced work
- Managing cash flow between client payments and freelancer fees
- Handling cross-border contractor tax compliance
- Building trust and brand reputation
Key decision criteria
- Access to global payment processors (e.g., US LLC or UK LTD)
- Tax implications of hiring international contractors (W-8BEN for US)
- Clear B2B contracts and terms of service
- VAT/Sales tax rules for digital services in your clients' countries
Estimated breakdown (based on avg. $80,000 revenue)
Simulate with your own revenue →
VAT / Sales Tax
Standard rate 20%. Registration threshold: 51,130 EUR. Foreign providers of digital services to Bulgarian consumers must charge 20% VAT, which can be reported through the EU One-Stop Shop (OSS) scheme.
Single-Member Limited Liability Company (EOOD) formation steps
Choose and reserve a unique company name with the Bulgarian Commercial Register.
Draft the Founding Act (Articles of Association) and standard management declarations.
Notarize and apostille the Power of Attorney and specimen signatures in your home country (if forming remotely).
Courier the original apostilled documents to your legal representative in Bulgaria.
Open a capital accumulation bank account and deposit the minimum share capital of 2 BGN (1 EUR).
Submit the incorporation documents and pay the state filing fees to the Bulgarian Registry Agency.
Obtain the Unified Identification Code (UIC/EIK) upon successful registration (usually within 3-7 days).
Register for VAT (mandatory if turnover exceeds 100,000 BGN or for intra-EU B2B services) and open an operational corporate bank account.
Drop Servicing FAQ
Which country is best for a drop servicing company?
The US (LLC) and UK (LTD) are highly popular due to easy access to Stripe/PayPal, global credibility, and straightforward rules for paying international contractors.
Do I need to pay withholding tax when paying freelancers?
It depends on your company's jurisdiction and the freelancer's tax residency. For a US LLC, collecting a W-8BEN form from non-US contractors usually exempts you from withholding tax.
How do I handle VAT or Sales Tax?
You must track where your clients are located. If selling B2B, the reverse charge mechanism often applies. For B2C, you may need to register for VAT/Sales Tax in the client's jurisdiction once you cross specific revenue thresholds.
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Complete Single-Member Limited Liability Company (EOOD) guide
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Single-Member Limited Liability Company (EOOD) cost calculator
One-time and annual cost breakdown
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