Bulgaria, a New Asset-Building Lever for a Leader Seeking to Move 100% Out of France

Published on June 16, 2026 and written by Cyril Jarnias

Leaving the all-French framework without falling into risky tax exile has become one of the major headaches for wealth managers. Between a brutally effective exit tax, the IFI (French real estate wealth tax), heavy taxation on dividends and capital gains, and a political climate less favorable to high net worth individuals, many are seeking an exit door that remains within the European framework, with a solid but fiscally breathable environment. Bulgaria today checks several boxes that few countries combine: a 10% flat tax, no wealth tax at all, a very low cost of living, still affordable real estate, a European legal framework, a double tax treaty with France, and now, membership in the Eurozone and Schengen.

A Tax Environment Radically Different from France

The first break between France and Bulgaria is disarmingly simple: in Bulgaria, virtually all income and corporate tax is based on a single rate of 10%. No progressive scale, no stacking brackets, no “hidden” social contributions on capital income.

The business leader who compares the two environments quickly finds themselves facing two different worlds.

Income, Profits, Dividends: A Clash of Models

In Bulgaria, personal income tax is a proportional tax: 10% on all taxable income, whether salaries, professional income, self-employment profits, or capital gains from securities. This same 10% rate applies to corporate income tax for legal entities. Dividends received by an individual are subject to a final withholding of 5%, regardless of the amount.

To measure this gap, simply compare a dividend distributed from an operating company.

In a classic holding structure, a Bulgarian operating company subject to 10% distributes its results to a Bulgarian or European holding company: the distribution is exempt from withholding tax if European conditions are met, then the flow up to the business leader, a Bulgarian resident, bears only 5%. The same leader remaining a French resident would see these same dividends subject to the flat tax of 30%, with, admittedly, a tax credit for the Bulgarian withholding, but in an overall much heavier environment.

No Wealth Tax: A French Blind Spot That Disappears

Bulgaria levies no wealth tax, neither on individuals nor on companies. There is no annual tax on net wealth. In contrast, France simply renamed its ISF to IFI, refocused on real estate, with a progressive rate starting at 0.5% rising to 1% then 1.5% on large fortunes (> €10M taxable base). A French resident becomes taxable on all their worldwide real estate assets above €1.3M in net value, while a non-resident only bears this tax on assets located in France.

For a business leader whose wealth holding company owns buildings, securities, and cash, simply switching residence, if properly structured, can eliminate a significant annual levy.

Capital Gains and Inheritance: 10% vs. Progressivity and IFI

In Bulgaria, the general rule for capital gains (aside from a few stock exchange exemptions) is clear: 10%, whether for a resident or a non-resident on Bulgarian-source gains. Capital gains from the sale of listed securities on a regulated EU/EEA market are exempt, as are those from government bonds traded on a regulated market.

In practice, a business leader anticipating the transfer of their wealth can build a structure in which:

– their tax residence shifts to Bulgaria;

– their movable assets are positioned in Bulgarian companies or in vehicles located in the EU/EEA benefiting from capital gains exemptions;

– the succession is materialized in a country where direct-line transfers are outside the scope of taxation.

Euro, Schengen, OECD: A Small Rate in a Big Zone

Beyond rates, a business leader seeks stability, compatibility with international standards, and the ability to do business in Europe without friction. From this perspective, the Bulgarian trajectory is strategic.

Eurozone Integration and Monetary Security

Bulgaria has pegged its currency at a fixed rate of 1.95583 leva to 1 euro and has initiated a full process of adopting the single currency, with a complete shift of taxation to the euro. From 2026, all taxes and public obligations are calculated, declared, and paid in euros; previous declarations remain in leva, but conversion occurs at the official rate.

Schengen, Mobility, and Image

Bulgaria is now integrated into Schengen for travel, facilitating the movement of executives, teams, and families within the EU. Added to this is the fact that it is a full Member State, integrated into EU directives (interest-royalty, parent-subsidiary, etc.) and possessing a dense network of double taxation treaties, including, of course, one with France (signed in 1987).

For a French business leader, this means it is not an “exotic” or perceived non-cooperative jurisdiction, but a country aligned with OECD standards, subject to automatic exchange of information, while maintaining low taxation.

The Achilles’ Heel of Large Groups: The 15% Minimum Tax

Large groups, those with consolidated revenue exceeding €750M in at least two of the last four fiscal years, fall within the scope of the so-called OECD “Pillar 2” rules in Bulgaria. For these entities, Bulgaria has introduced a domestic top-up tax aimed at bringing the minimum effective rate to 15%. The logic is simple: if the Bulgarian subsidiary of a French group only paid 10%, France could, in the absence of a local top-up, levy the missing 5%. Bulgaria has therefore chosen to apply this surcharge itself to capture this resource.

Creating Your Bulgarian Structure: EOOD, OOD, Holding, and No Barriers for Foreigners

To turn Bulgaria into a real wealth lever, it is not enough to buy an apartment there. For a business leader, it involves deploying a legal architecture: operating company, holding, asset ownership, even group structure.

EOOD and OOD: The Bulgarian LLCs

The flagship vehicle for foreign investors is the limited liability company, in its single-member (EOOD) or classic (OOD) form. In practice, this is the equivalent of the French SARL or the German GmbH: shareholders’ liability is limited to their contributions, and they are not, in principle, personally liable for the company’s debts.

The minimum share capital has been reduced to a symbolic level: 2 BGN, just over one euro. At least 70% of the subscribed capital must be paid up before registration, making creation very simple, including for a pure holding structure.

An EOOD or an OOD can be 100% owned by a French individual or legal entity. No nationality or residence criteria are required for either shareholders or directors. For foreigners, registration is done in a few days via the Commercial Register, often through a local advisor with a power of attorney.

AD and Variable Capital Companies: Tools for Larger Projects

When projects are larger in scale – stock exchange listing, larger capital raises, financial market operations – the appropriate structure is the joint-stock company (AD), for which the minimum capital is set at 50,000 BGN, around €25,000. ADs can issue ordinary or preferred shares, bearer or registered, and raise capital by issuing bonds.

Bulgarian Holding Company: Managing French and International Investments

The concept of a holding company is clearly defined in Bulgarian law. It is a capital company (AD, OOD, or partnership limited by shares) where at least 25% of the capital is invested in equity interests in other companies. The holding’s main activity is acquiring, managing, evaluating, and disposing of investments, bonds, patents, or financing its subsidiaries.

Some structuring rules apply:

Tax-wise, the Bulgarian holding company benefits from a CIT rate of 10%. Dividends received from subsidiaries located in the EU/EEA are tax-exempt, with no holding period or participation threshold conditions, subject to anti-abuse clauses. Additionally, capital gains on the sale of subsidiary shares are generally exempt when the subsidiary does not hold real estate located in Bulgaria. This gives us an effective capitalization tool, capable of receiving flows from French and international subsidiaries in a low-tax environment within the EU.

Acquiring Real Estate via a Company for Non-Nationals

Another practical aspect: a foreign individual may face certain limits when purchasing land. The solution is to hold the assets through a Bulgarian company (EOOD/OOD), which removes restrictions and allows the acquisition of all real estate, including land. For a business leader wanting to back their wealth exit with a real estate portfolio, this setup is standard.

Banks, Accounts, and KYC Constraints: An Accessible Country, but More Selective Than Before

One of the often-underestimated points in a wealth relocation strategy is access to the local banking system. Bulgaria is not exempt from growing requirements in anti-money laundering (AML) and know-your-customer (KYC) compliance.

The major banks present – UniCredit Bulbank, DSK, Postbank, UBB, Raiffeisen, First Investment Bank, TBI Bank, Citibank, etc. – require for account opening:

For companies, the bank will additionally require the articles of association, the Kbis extract or equivalent, the list of beneficial owners, and any applicable licenses depending on the activity. Foreign documents generally need to be translated into Bulgarian and, absent an exemption convention, apostilled.

Since 2018-2019, several Bulgarian banks have toughened their stance towards “purely banking” non-residents: opening a personal or professional account without any real economic ties (permanent residence, serious investment project, introduction by a reputable firm) is significantly more complicated. For a business leader who wants to structure a real project (business creation, significant investments, medium-term residence), these conditions are, however, met fairly naturally.

Bulgarian Tax Residence: Criteria, Shift, and Coordination with France

Turning Bulgaria into a wealth “center of gravity” requires, beyond companies, addressing the issue of personal tax residence. Bulgarian law, like French law, uses a set of objective criteria.

Bulgarian Criteria: Presence, Address, Center of Vital Interests

An individual is considered a Bulgarian tax resident if:

– they have a permanent address in Bulgaria;

– or they stay more than 183 days, over any 12-month period, in the country (entry and exit days count separately);

– or their center of vital interests (family, main home, professional activity, management of their wealth) is in Bulgaria.

Once a resident, they are taxed on their worldwide income at 10%, with all internal and treaty exemption regimes. A non-resident is only taxed on their Bulgarian-source income (rents, dividends, salaries, Bulgarian real estate capital gains, etc.), with withholding rates of 10% (interest, royalties, technical services, certain gains) or 5% (dividends).

France-Bulgaria Tax Treaty: Avoiding Double Taxation

The 1987 double taxation treaty between France and Bulgaria plays a central role in structuring. It provides tie-breaker rules for residence (following the OECD logic: permanent home, center of vital interests, habitual abode, nationality, mutual agreement), but most importantly, it allocates certain types of income to one or the other state, then organizes a tax credit mechanism.

Same logic for dividends: Bulgaria applies a 5% withholding on dividends distributed to a resident of the other state. The treaty caps this withholding, and France grants a tax credit equivalent to this withholding, to be applied against the 30% flat tax due in France. In practice, for a business leader who remains a French resident, passing through Bulgaria reduces the tax burden but does not eliminate it; the full effect only appears when they become a Bulgarian resident.

French Exit Tax: The Strategic Lock on Departure, and How to Approach It with Bulgaria

Leaving France with a portfolio of company shares immediately raises a question: the exit tax. This mechanism, rewritten several times, applies when a taxpayer who has been a French tax resident for at least 6 of the 10 years preceding their departure transfers their residence outside France, while holding:

– either securities with a total value of at least €800,000;

– or at least 50% of the rights in a company’s profits.

Then, unrealized capital gains on these securities, as well as certain deferred gains and receivables for additional consideration, are deemed realized on the day before departure. The applicable rate aligns with the tax on securities capital gains, i.e., a flat 30% (12.8% tax + 17.2% social contributions) for departures after 2018.

Deferred Payment and Extinction of the Exit Tax: The Role of Time

To mitigate this blow, French law provides for suspension and relief mechanisms:

– in the case of a move to an EU country (or a state with equivalent assistance and recovery conventions), payment suspension is automatic, without needing to provide guarantees;

– France then monitors the situation during a “tracking period”: 2 years if the value of the taxable securities is less than €2.57M, 5 years above that;

– if, at the end of this period, the securities are still held, the tax is discharged; if they are sold before, the suspension ends and the tax becomes due.

The business leader can then play on three levers:

– the holding period post-departure, to let the tracking period run until the potential exit tax claim extinguishes;

– managing disposals: selling highly appreciated securities outside this period, once the exit tax has been extinguished, preferably while already a resident in a milder tax environment (Bulgaria);

– upfront structuring, by transferring certain assets to a holding company or carrying out restructuring operations before departure (keeping French anti-abuse rules in mind).

Bulgarian Real Estate: Balancing Rental Yield, 10% Capital Gains, and Cost of Living

For a business leader seeking diversification, Bulgarian real estate offers three aspects: a tangible asset in a catching-up country, light taxation, and a very low cost of living that can support a semi-retirement or teleworking project.

Real Estate Taxation: Simple, Local, and Inexpensive

A property in Bulgaria is subject to an annual property tax set by the municipality, calculated on a tax value (often lower than market value). Rates typically vary between 0.15% and 0.30% of this value, with some texts mentioning a range expressed in per mille (0.1 to 4.5 per thousand), which remains very modest in practice. Very low-value properties (up to 1,680 BGN in tax value) are sometimes exempt.

Upon acquisition, the investor pays:

Compared to the 7–8% in total costs in France, this entry point is notably lower.

Regarding rental income, an individual is taxed at 10% on net income (revenue minus expenses). For a non-resident, a withholding tax of 10% on gross income may apply, without a standard deduction, but the treaty with France ensures elimination of double taxation via a tax credit.

As for capital gains, the basic rule is a rate of 10%, whether resident or non-resident, calculated on the difference between sale price and purchase price (with sometimes a flat 10% deduction for expenses for residents). Added to this are exemption regimes for listed securities, including on recognized SME markets (exemption from withholding on gains from the sale of shares on these markets, made permanent since 2026).

Cost of Living: A Factor of Freedom for a Business Leader

Bulgaria is among the cheapest countries in the EU. Cost of living indices place it around 40 on a scale of 100 (New York = 100), with an overall level roughly 50% lower than France. Rents in Sofia are 80% lower than in New York and well below major Western European cities.

For a business leader whose international compensation or capital income remains high, this differential mechanically creates significant flexibility: they can, at an equal cost of living, reduce the income needed by about one-third to half to maintain the same level of comfort as in France.

Other Pieces of the Puzzle: VAT, R&D Incentives, Investment Vehicles

For a business owner who also wants to establish an operational base in Bulgaria, several additional elements complete the picture.

The Bulgarian Parliament has also adopted or examined targeted measures to encourage R&D and certain green investments:

– additional 25% deduction for R&D expenses (on top of the normal deduction), provided these expenses are not subsidized;

– possibility of accelerated depreciation of electric vehicles at 50% per year for acquisitions after 2025/2026.

For a tech-industrial holding structure, these incentives, combined with the 10% rate, contribute to further reducing the effective tax rate.

Planning an Exit from France to Bulgaria: A Realistic Roadmap for a Business Leader

Turned into a strategy, Bulgaria can become a true “hub” for a French business leader who wants to disengage from 100% France without exposing themselves to disproportionate legal or tax risks. A pragmatic approach involves articulating several steps.

1. Map Out Assets and Exposure to the Exit Tax

Before any departure decision, it is essential to take inventory:

– valuation of significant holdings (threshold of €800,000 and/or 50% of rights);

– presence of securities subject to deferred taxation or receivables for additional consideration;

– nature of real estate assets in France (which are not directly within the scope of the exit tax, but weigh on the IFI as long as residence remains French).

This snapshot allows assessing the theoretical magnitude of an exit tax and possible room for maneuver: prior gifts, internal restructurings, partial disposals.

2. Create a Receiving Structure in Bulgaria

Setting up an EOOD/OOD or an AD holding in Bulgaria takes a few days. The form should be chosen according to objectives:

– operating company (consulting, IT, e-commerce, light industry) to invoice services and house part of the activity outside France, at 10% CIT;

– holding company for investments to centralize flows from international subsidiaries in a 10% environment, while remaining in an EU jurisdiction.

The company must have a local bank account, articles of association drafted in Bulgarian, and proper governance (manager or board).

3. Organize Your Physical and Tax Residence in Bulgaria

A business leader who truly wants to become a Bulgarian resident cannot just spend a week a year there. They will need to:

– rent or buy a home that constitutes their permanent home;

– transfer, at least largely, their family life there or, failing that, demonstrate that the center of their vital interests (wealth management, professional activity) is located there;

– spend more than 183 days per 12-month period there.

In parallel, they must comply with local formalities: address registration with the municipality, obtaining residence certificates for EU citizens after 3 months of stay, applying for an identification number (LNCH/EGN) if necessary, opening accounts, and possibly registering with the Bulgarian social security system.

4. Switch Residence and File the Exit Tax Declaration in France

The departure must be declared to the French tax authorities using the specific exit tax form (2074-ETD), ensuring deadlines are met (at the latest with the income tax return for the year following departure, with some sources mentioning an obligation up to 90 days before). If Bulgaria is the destination, the business leader can benefit from automatic payment suspension, without providing guarantees.

5. Gradually Exploit the Bulgarian Advantages

Once Bulgarian tax residence is stabilized and the tracking period is over, the business leader can:

– dispose of securities and realize capital gains under the Bulgarian 10% flat tax (keeping in mind the French source taxation rules on certain assets);

– receive dividends from Bulgarian holding companies with only a 5% withholding, without IFI on the holdings;

– invest in local real estate, with property and rental income taxation significantly lower than in France.

Over time, the weight of French taxation diminishes, treaty tax credit mechanisms play their role, and the wealth center of gravity shifts.

Conclusion: Bulgaria, a Lever to Be Handled as a Strategy, Not a Flight

Bulgaria offers the French business leader a rare combination: an EU country, in the eurozone, subject to OECD standards, but with a “flat tax” style taxation at 10%, no wealth tax, light taxation of dividends and capital gains, very low inheritance taxes, and a cost of living that allows maintaining a high level of comfort with lower income.

This move cannot be improvised. It requires accepting a real change in one’s center of life and wealth management. But for those ready to take this step, Bulgaria offers an equation that few European countries can provide today: staying within the framework while significantly reducing the pressure.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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