EOOD vs OOD in Bulgaria: Which Company Type Should You Choose?

If you are planning to register a company in Bulgaria, one of the first decisions you will need to make is whether to choose an EOOD or an OOD.

Both forms are limited liability companies and are among the most commonly used company structures in Bulgaria. They are suitable for small businesses, foreign entrepreneurs, consultants, e-commerce companies, service providers and international founders who want to operate through a Bulgarian legal entity.

Although EOOD and OOD are very similar, the difference between them matters. The right choice depends mainly on the ownership structure of your business, how many founders are involved and how you want decisions to be made.

What Is an EOOD in Bulgaria?

EOOD stands for Sole Owner Limited Liability Company.

An EOOD is a Bulgarian limited liability company owned by one person or one legal entity. The sole owner may be:

• an individual;

• a foreign individual;

• a Bulgarian legal entity;

• a foreign legal entity.

This structure is commonly used when one founder wants full control over the company. It is suitable for freelancers, consultants, online business owners, solo entrepreneurs and foreign investors who want to establish a Bulgarian company without partners.

In an EOOD, the entire capital of the company belongs to one owner. The company may be managed by the sole owner or by another appointed manager.

What Is an OOD in Bulgaria?

OOD stands for Limited Liability Company.

An OOD is a Bulgarian limited liability company with two or more shareholders, also called partners. The partners may be individuals or legal entities, Bulgarian or foreign.

This structure is suitable when two or more people want to start a business together, share ownership, contribute capital and participate in company decisions.

The partners do not need to hold equal shares. For example, one partner may own 70% of the company and another partner may own 30%. The ownership structure should be clearly defined in the Articles of Association.

Main Difference Between EOOD and OOD

The main difference between EOOD and OOD is the number of owners.

An EOOD has one owner.

An OOD has two or more owners.

In practice, this difference affects decision-making, internal governance, documentation and future changes in ownership.

If you are the only founder, an EOOD is usually the simpler and more direct choice. If you are starting the business with partners, an OOD is usually the appropriate structure.

Liability Protection

Both EOOD and OOD provide limited liability.

This means that the company is a separate legal entity and the owner or partners are generally not personally liable for the company’s obligations beyond their contribution to the company’s capital.

This is one of the main reasons why foreign entrepreneurs choose EOOD or OOD instead of operating as individuals or sole traders.

However, limited liability does not mean that owners and managers can ignore legal, tax or accounting obligations. Managers may still have responsibilities under Bulgarian law, especially in cases involving unpaid public obligations, wrongful actions or breaches of legal duties.

Minimum Share Capital

The minimum capital required to incorporate an EOOD or OOD in Bulgaria is very low: BGN 2, which is approximately €1.

This makes company formation in Bulgaria accessible for small businesses and start-ups.

Although the legal minimum is low, many founders choose to register a higher capital amount for practical or reputational reasons. A higher capital amount may look more serious to banks, clients or business partners, depending on the type of business.

Ownership and Decision-Making

In an EOOD, the decision-making process is simpler because there is only one owner. The sole owner makes decisions on matters such as:

• appointment of manager;

• change of registered address;

• capital increase;

• profit distribution;

• sale of the company;

• changes in the company documents.

In an OOD, decisions are made by the partners according to the Articles of Association and the rules of the Bulgarian Commerce Act. This means that the relationship between the partners should be carefully regulated from the beginning.

For an OOD, it is important to define:

• each partner’s share;

• voting rights;

• management powers;

• rules for admitting new partners;

• rules for transferring shares;

• profit distribution;

• procedures in case a partner wants to exit the company.

Management of EOOD and OOD

Both EOOD and OOD must have at least one manager.

The manager represents the company before institutions, banks, clients and third parties. The manager must be a natural person. This person may be the owner, one of the partners or an external person appointed to manage the company.

Foreign founders often choose to act as managers themselves, but in some cases they may appoint another person, depending on the business model, residency situation and practical needs.

Tax Treatment

From a tax point of view, EOOD and OOD are generally treated the same.

Bulgarian companies are subject to corporate income tax on their taxable profit. Bulgaria applies a flat corporate income tax rate of 10%.

If profits are distributed as dividends, dividend withholding tax may apply. Under Bulgarian domestic rules, the withholding tax rate on dividends and liquidation shares is generally 5%, although exemptions or different treatment may apply in certain cross-border situations, especially within the EU/EEA or under double tax treaties.

The standard VAT rate in Bulgaria is 20%. VAT registration may be mandatory or voluntary depending on the company’s turnover, activities, transactions and clients.

Because tax rules depend on the exact business model, foreign founders should always consult a Bulgarian accountant or tax advisor before starting operations.

EOOD: Main Advantages

An EOOD is often the best choice for a single founder because it is simple, flexible and easy to control.

The main advantages include:

• one owner has full control;

• simpler decision-making;

• easier internal administration;

• suitable for freelancers and solo entrepreneurs;

• suitable for foreign investors with no local partner;

• easier to sell or restructure when there is only one owner.

For many foreign entrepreneurs, the EOOD is the most practical structure when they want to register a Bulgarian company quickly and operate independently.

EOOD: Possible Disadvantages

The main limitation of an EOOD is that it is designed for one owner only.

If you later want to bring in a business partner or investor as a shareholder, the company structure will need to be changed. In many cases, the EOOD may be transformed into an OOD by transferring part of the capital to another person or admitting a new partner.

This is possible, but it requires proper documentation, decisions, changes in the company documents and registration of the changes in the Commercial Register.

OOD: Main Advantages

An OOD is usually the better choice when there are two or more founders.

The main advantages include:

• suitable for partnerships;

• ownership can be divided between several people or companies;

• partners can contribute different amounts of capital;

• responsibilities and voting rights can be regulated in the Articles of Association;

• suitable for joint ventures;

• easier to reflect a real business partnership from the beginning.

An OOD is often preferred when the business is started by co-founders, family members, investors or international partners.

OOD: Possible Disadvantages

An OOD requires more careful planning because more than one person is involved.

Potential disadvantages include:

• decision-making may be slower;

• disputes between partners are possible;

• the Articles of Association must be drafted carefully;

• exit rules should be clear from the beginning;

• transfers of shares may require additional procedures;

• the relationship between partners must be legally structured.

For this reason, an OOD should not be registered casually. If several people are involved, it is important to clarify ownership, management and exit rules before the company is incorporated.

Which Company Type Should You Choose?

You should usually choose an EOOD if:

• you are the only founder;

• you want full control;

• you do not need partners at the beginning;

• you are a freelancer, consultant or online business owner;

• you want a simpler structure;

• you are a foreign entrepreneur setting up a Bulgarian company alone.

You should usually choose an OOD if:

• there are two or more founders;

• you are starting a business with partners;

• you want to divide ownership between several people or companies;

• you need a more formal partnership structure;

• you plan to involve investors or co-founders from the beginning;

• you want voting rights and partner relations to be regulated in the company documents.

Can an EOOD Become an OOD Later?

Yes, in practice an EOOD can become an OOD if another partner is admitted or part of the capital is transferred to another person.

This may be useful if a solo founder later decides to bring in a co-founder, investor or business partner.

However, the change must be properly documented and registered with the Bulgarian Commercial Register. It is important to prepare the necessary decisions, updated company documents and transfer documents correctly.

Can Foreigners Own an EOOD or OOD in Bulgaria?

Yes. Foreign individuals and foreign legal entities can generally own Bulgarian companies.

This is one of the reasons Bulgaria is popular among international entrepreneurs. A foreign founder can register an EOOD as a sole owner, while two or more foreign founders can register an OOD.

Depending on the founder’s country, documents may need to be notarised, legalised or apostilled, and translated into Bulgarian.

Documents Usually Required for Registration

The exact documents depend on the ownership structure, but the registration of an EOOD or OOD usually involves:

• company name;

• registered address and address of management;

• scope of business activity;

• amount of capital;

• ownership structure;

• decision to incorporate the company;

• Articles of Association or incorporation document;

• appointment of manager;

• notarised specimen signature of the manager;

• bank certificate for paid-in capital;

• declarations required by law;

• application to the Commercial Register;

• power of attorney, if the process is handled by a representative.

Foreign legal entities may need to provide additional documents proving their existence and representation.

Conclusion

EOOD and OOD are both practical and widely used company types in Bulgaria. They offer limited liability, low minimum capital and access to the Bulgarian and EU business environment.

The choice between them is mainly a question of ownership.

Choose an EOOD if you are a single founder and want a simple company structure with full control.

Choose an OOD if two or more people or companies will own the business together and you need a clear partnership structure.

Before registering a company in Bulgaria, it is important to consider not only the incorporation process, but also accounting, VAT, tax residency, dividend distribution, management, banking and long-term compliance.

Professional advice can help you choose the right structure from the beginning and avoid unnecessary changes later.