08 July Investment

Comparing Company Formation in Germany, the Netherlands, and Bulgaria

Mehmet Akif Özmen | Sworn-in CPA | Founder, CEO

Establishing a company abroad offers significant opportunities for entrepreneurs but also comes with its own set of challenges. Germany, the Netherlands, and Bulgaria are three key countries in Europe that attract entrepreneurs due to their advantages and favorable business environments. However, before setting up a business in these countries, it is crucial to consider various factors such as tax rates, legal regulations, cultural differences, and market dynamics.

When deciding whether to establish a company in Germany, the Netherlands, or Bulgaria, what criteria should you pay attention to, and what advantages should you look for? Sometimes a single advantage may suffice, while at other times, it is more prudent to consider multiple advantages together and make a decision based on a comprehensive evaluation.

In this article, we will discuss practical information and strategies you need to consider during the company formation process in Germany, the Netherlands, and Bulgaria, so you can build your business on a solid foundation in the international arena.

A Comparative Application Example When Making an Investment Decision

Comparative Tax Rates

From a corporate tax perspective, Bulgaria is advantageous with a rate of 10%. In the Netherlands, tax rates are 15% on earnings up to 200,000 Euros and increase to 25% thereafter. In Germany, both local and central taxes total between 30-40%.

If tax rates are important to you but the location of your company headquarters is not, Bulgaria, the Netherlands, and Romania may be suitable options.

Language Options in Meetings

It is easier to communicate in English in the Netherlands. In Germany, knowing German is a priority. In Bulgaria, you can easily conduct your business by finding a Bulgarian Turk.

Invoicing and Logistics Alternatives

While the regions where your customers are concentrated can determine your focus, sometimes this may not be crucial. You can ship goods from Turkey to Singapore and issue invoices from the Netherlands or Germany.

Sometimes you can source raw materials from where your customers are concentrated, process them in a customs area, and ship them duty-free to different countries, thereby increasing your power by adding value.

Alternatively, you can transfer goods to a warehouse in Bulgaria and circulate them within the Schengen area as European Union goods without paying customs duties.

Residence-Holding Managers and Partners

The most challenging and meticulous stage when establishing a company is opening a bank account for your company. We have observed that there are no issues in opening a company bank account if the partners or managers hold residence permits in that country. The tax office, especially in Germany, pays close attention to this matter.

In Bulgaria, you need to have 5 employees to obtain residence. In Germany or the Netherlands, you can obtain these opportunities later by employing 3 employees with an investor visa.

Manageability of Logistics

The location of your logistics center often provides you with an advantage. From a cost perspective, Bulgaria sounds appealing.

Countries with Sector-Specific Advantages

For software developers, Estonia and the Netherlands are more suitable in terms of tax rates and incentives.

For manufacturing companies, Germany may be the center due to ease of management, while the Netherlands may be more suitable for real estate investments. For hospital and healthcare investments, the UK and Germany are significant centers.

What Can We Do For You?

As MHR & Partners, we are directly and indirectly active in more than 20 countries worldwide. We aim to operate with 10 branches in 100 countries in 10 years. We offer you end-to-end consultancy and support services in establishing a company, obtaining a residence permit, and in all operational processes abroad, primarily financial issues.

Our priority is to provide consultancy services to companies with a growth vision and business strategy abroad. We attach particular importance to the uninterrupted continuation of our services with the assurance of MHR & Partners (Mühür YMM AŞ) after the company establishment stages. Our core mission is to be a safe harbor and provide sustainable services.

We want to be a bridge to our customers’ business plans for growth and development, even in the most remote parts of the world.

To establish a business in Turkey or Europe (Germany, The Netherlands, Belgium, UK, Romania, Bulgaria, Montenegro), you can contact Sworn-in Certified Public Accountant Mehmet Akif Özmen directly (+90 542 830 3408 or akif.ozmen@mhrpartner.com).

Okuma Tavsiyesi

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