Internationalization without tax surprises: what the Italian report tells us and why Bulgaria is the logical choice
Today, internationalizing a business no longer simply means “opening a company abroad.” It is a complex process in which tax planning, legal structure, and risk management are just as important as the market itself. This is precisely what is emphasized in the report “La fiscalità nell’internazionalizzazione delle imprese” or “Fiscal Policy in the Internationalization of Businesses,” prepared by Italian experts in international tax law.
The document is particularly relevant for Italian companies facing high tax burdens, complex bureaucracy, and a limited domestic market. But its conclusions are universal—and when we apply them in practice, Bulgaria stands out as one of the most sensible destinations for internationalization in the EU.
❓📘Why is this report important 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 that 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.
🧭The five models of internationalization – and where Bulgaria fits in The report identifies five main ways in which a company can enter a foreign market:
- Representation – suitable for initial contact with the market, provided that 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 more complex industries and resource sharing.
- E-commerce – a rapidly growing model, but with increased sensitivity to VAT and territorial rules.
Bulgaria allows for the effective implementation of all these models without sacrificing compliance with European and Italian rules.
💰Taxes: the deciding factor One of the main motives for internationalisation mentioned in the report is the tax burden. This is where Bulgaria has 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 for effective allocation of profits
- clear rules for the taxation of income from interest, royalties, and capital gains
This is not “aggressive optimization,” but rather legitimate and sustainable tax planning, fully in line with the recommendations of the report.
🧩Permanent establishments, residency, and shell entities The report pays particular attention to three sensitive issues:
1. Permanent objects (PE) Many companies create them unintentionally—through agents, long-term projects, or local teams. Bulgaria offers a clear framework and low taxation, which makes PE management more predictable.
2. Fiscal residency Where are decisions made? Where is the actual management? Bulgaria allows for the actual establishment of business substance, rather than a formal “change of address.”
3. Shell entities The new European rules penalize empty structures. Bulgaria is not an offshore zone, but an economy with real people, offices, and activity—exactly what regulators are looking for.
🛒📦E-commerce and VAT: why the EU matters The report clearly shows that VAT is more important than corporate tax in e-commerce. As an EU Member State, Bulgaria proposes:
- common rules for intra-Community supplies,
- access to OSS regimes,
- less regulatory uncertainty.
For online businesses, this is crucial.
🎯Conclusion: Bulgaria is not a “cheap option” but a strategic choice. The report “La fiscalità nell’internazionalizzazione delle imprese” does not seek tax “tricks.” It seeks sustainability, consistency, and long-term effectiveness. That is precisely why Bulgaria fits so well into his logic:
- low and clear taxes,
- working international agreements,
- EU membership,
- real economic substance,
- fast and flexible business environment.
For Italian companies, this means one thing: less risk, more control, and more room for growth.
👉 If you need adequate advice on relocating your business to Bulgaria or are looking for an experienced accounting team, Saad Consulting is your trusted partner.