The document is particularly relevant for Italian companies facing high tax burdens, complex bureaucracy, and a limited domestic market. Its conclusions are universal—and when applied in practice, Bulgaria stands out as one of the most sensible destinations for internationalization in the EU.
Why This Report Matters for Entrepreneurs
The main message of the report is clear and practical: internationalization must begin with structure, not improvisation.
Many companies make the mistake of acting “operatively”—opening an office, hiring people, or selling online—without realizing they may inadvertently create:
- Permanent establishment (stabile organizzazione)
- Double taxation
- VAT issues
- Risks in transfer pricing
- Or even be classified as a shell entity
The report systematizes these risks and shows how they can be avoided by choosing the right model and country.
Five Models of Internationalization and Bulgaria’s Role
The report identifies five main ways for a company to enter a foreign market:
- Representation – Suitable for initial market contact, provided the activity remains preparatory and auxiliary.
- Permanent Establishment – Arises from actual business activity (office, warehouse, team, agents) and requires careful tax planning.
- Subsidiary – The purest model in terms of risk and control.
- Collaborations and Joint Ventures – Useful for complex industries and resource sharing.
- E-commerce – A rapidly growing model, but sensitive to VAT and territorial rules.
Bulgaria allows for the effective implementation of all these models without compromising compliance with European and Italian rules.
Taxes: The Deciding Factor
One of the main motives for internationalization mentioned in the report is the tax burden. Bulgaria offers a clear competitive advantage:
- 10% corporate tax – flat, transparent, and among the lowest in the EU
- 5% tax on dividends
- Double taxation agreement with Italy, allowing effective allocation of profits
- Clear rules for taxation of income from interest, royalties, and capital gains
This is legitimate and sustainable tax planning, fully in line with the report’s recommendations.
Permanent Establishments, Residency, and Shell Entities
The report emphasizes three sensitive issues:
1. Permanent Establishments (PE)
Many companies create them unintentionally—through agents, long-term projects, or local teams. Bulgaria offers a clear framework and low taxation, making PE management more predictable.
2. Fiscal Residency
Where are decisions made? Where is actual management? Bulgaria allows for the real establishment of business substance, rather than just a formal “change of address.”
3. Shell Entities
New European rules penalize empty structures. Bulgaria is not an offshore zone, but an economy with real people, offices, and activity—exactly what regulators look for.
E-commerce and VAT: Why EU Membership Matters
The report highlights that VAT is often more critical than corporate tax in e-commerce. As an EU Member State, Bulgaria offers:
- Common rules for intra-Community supplies
- Access to OSS regimes
- Reduced regulatory uncertainty
For online businesses, this is crucial.
Conclusion: Bulgaria as a Strategic Choice
The report “La fiscalità nell’internazionalizzazione delle imprese” does not promote tax “tricks.” It emphasizes sustainability, consistency, and long-term effectiveness. Bulgaria fits this logic perfectly:
- Low and clear taxes
- Effective international agreements
- EU membership
- Real economic substance
- Fast and flexible business environment
For Italian companies, this means: less risk, more control, and more room for growth.
If you need expert advice on relocating your business to Bulgaria or are looking for an experienced accounting team, Saad Consulting is your trusted partner.