Which EU country has the lowest corporate tax rate in 2026?

Hungary has the lowest headline corporate tax rate in the EU at 9%, plus a 2% local business tax in most municipalities. However, Hungary's dividend tax is 15%, bringing the combined rate to approximately 24.5%. Bulgaria has the lowest combined rate when you factor in both corporate tax and dividend tax: 10% CIT + 5% dividend = 15% total.

Is Cyprus still a good option for EU companies?

Cyprus has a 15% CIT rate (increased from 12.5% to meet the OECD Pillar Two minimum). Its strength is the IP box regime (effective rate approximately 3% on qualifying IP income) and the non-domiciled status that eliminates dividend tax for up to 17 years. However, registration costs are high (EUR 1,000+), annual compliance is expensive, and you need genuine substance. Cyprus is best for IP-heavy businesses, not for general trading or services.

Cheapest EU Country to Register a Company in 2026 (Real Costs)

Q: What is the cheapest EU country to register a company?

Bulgaria is the cheapest EU country for company registration in 2026. The government registration fee is EUR 28, minimum share capital is EUR 1 (for an EOOD), and total first-year costs including legal fees, accounting, and registered address are among the lowest in the EU. Estonia and Lithuania have comparable registration costs but higher annual running costs.

Q: Is Estonia's 0% corporate tax really free?

No. Estonia charges 0% on retained (reinvested) profits, but 22% on distributed profits. When you add the 24% personal income tax on dividends received by non-Estonian residents, the effective combined rate at distribution is approximately 22%. Estonia is excellent if you plan to reinvest profits long-term, but not cheaper than Bulgaria if you want to take money out of the company.

Q: How much does it cost to register a company in Bulgaria?

The government registration fee for a Bulgarian EOOD (single-member LLC) is EUR 28 when filed electronically. Minimum share capital is EUR 1. Legal fees for full formation (articles of association, bank account, registration, tax registration) typically range from EUR 500-1,500. Total first-year costs including accounting start at approximately EUR 1,500-2,500.

Q: Can I register a company in Bulgaria without living there?

You can register a company remotely using a Power of Attorney — a lawyer can handle the entire Commercial Register filing on your behalf. However, if you want to become the company's tax resident director and benefit from the 10% flat tax, you need to establish physical presence in Bulgaria (residence card, 183+ days). A company without a resident director may face substance challenges from other tax authorities.

Q: What about Romania's 1% micro-company tax?

Romania's micro-company regime taxes revenue (not profit) at 1% for companies with turnover under EUR 100,000. This is extremely low for high-margin businesses. However, Romania increased its dividend tax from 10% to 16% effective 2026 under Law 141/2025, and the standard CIT rate is now 16%. For businesses above the micro threshold, Bulgaria's 10% CIT + 5% dividend (15% combined) beats Romania's 16% CIT + 16% dividend (approximately 29.4% combined).

Q: Which EU country is best for a one-person online business?

For a one-person online business taking regular distributions, Bulgaria offers the lowest combined tax burden at 15% (10% CIT + 5% dividend), the lowest registration and running costs, and since January 2026 operates in euros. Estonia is better only if you plan to reinvest all profits for several years. Romania's micro-company (1% on revenue) can be cheaper below EUR 100,000 turnover if margins are high, but annual compliance costs are higher and the dividend tax is now 16%.

The answer depends on what "cheapest" means to you. If you mean the lowest registration fee, several EU countries charge under EUR 100. If you mean the lowest headline corporate tax, Hungary wins at 9%. But if you mean the lowest total cost of getting money from your company into your personal account — the combined corporate tax plus dividend tax — then Bulgaria wins at 15% (10% CIT + 5% dividend), with a government registration fee of just EUR 28 and a minimum share capital of EUR 1.

This guide compares ten EU jurisdictions on the metrics that actually matter: registration costs, combined tax rates, minimum capital, annual running costs, and practical considerations. No affiliate links. No sponsored rankings. Just the numbers, verified for 2026, written by a law firm that registers companies across the EU.

15%

Bulgaria combined rate

EUR 28

Bulgaria reg fee

EUR 1

Bulgaria min capital

Countries compared

The Quick Comparison Table

Here is every country at a glance. Scroll right on mobile for the full table.

Country	CIT	Dividend tax	Combined rate	Min capital	Reg fee	Key note
Bulgaria	10%	5%	15%	EUR 1	EUR 28	Euro member Jan 2026
Hungary	9% (+2% local)	15% PIT	~24.5%	~EUR 100	~EUR 100	27% VAT
Estonia	0%/22% distributed	24% PIT	~22% at distribution	EUR 0.01 (liability to EUR 2,500)	EUR 265	e-Residency EUR 150
Poland (small)	9%	19% PIT	~26.3%	PLN 5,000 (~EUR 1,100)	~EUR 50	<EUR 2M revenue
Romania micro	1% revenue	16%	Varies	RON 500 (~EUR 100)	~EUR 150	<EUR 100K turnover
Romania standard	16%	16%	~29.4%	RON 500 (~EUR 100)	~EUR 150	Law 141/2025
Cyprus	15%	0% (non-dom) / 5% SDC	15-19.25%	EUR 1,000+	EUR 1,000+	IP box ~3%
Lithuania (small)	7% (0% first 2 yr)	15%	~20.95%	EUR 2,500	~EUR 50	<EUR 300K / <10 employees
Latvia	20% distributed	0% PIT	~25% effective	EUR 2,800	~EUR 150	Similar to Estonia model
Ireland	12.5%	Up to 52-55% marginal	Very high combined	None	EUR 50	KDB 10% for IP

How to read "combined rate": This is what you pay to earn EUR 100 in your company and move it to your personal bank account. Bulgaria: 10% corporate tax + 5% dividend tax on distributions = 15% combined rate. This is the metric that matters for owner-operators taking regular distributions.

Bulgaria: Lowest Combined Rate + Lowest Costs

Bulgaria is the clear winner for entrepreneurs who want to minimise total tax on distributed profits. The combined CIT plus dividend rate of 15% (10% + 5%) is the lowest in the EU for money that actually reaches your pocket. Since January 1, 2026, Bulgaria is a Eurozone member, eliminating currency risk for EUR-denominated businesses.

Registration is fast and cheap. The government fee for an EOOD (single-member LLC) is EUR 28 when filed electronically via the Commercial Register. Minimum share capital is EUR 1 — yes, one euro. The entire process takes 3-5 business days. Annual accounting costs are among the lowest in the EU, typically EUR 100-200/month for a small company.

The tax environment is simple: 10% flat CIT on profit, 5% dividend withholding, 20% VAT (threshold EUR 51,130). No local business taxes, no surcharges, no hidden levies. Freelancers pay an effective 7.5% after the automatic 25% expense deduction.

Best for: Solo entrepreneurs, freelancers, service companies, e-commerce, SaaS, consulting, remote workers. Anyone who wants simplicity, low cost, and low tax — and plans to take regular distributions.

Estonia: 0% If You Never Take Money Out

Estonia's tax system is unique in the EU: 0% corporate tax on retained profits, 22% on distributed profits. This means if you reinvest everything back into your company — hiring, marketing, product development — you pay zero tax. The moment you distribute a dividend, the company pays 22% CIT (reduced to 14% for regular distributions under certain conditions).

The e-Residency program (EUR 150 for the digital ID card) allows anyone to register and manage an Estonian company remotely. Registration costs EUR 265 via the e-Business Register. Minimum share capital is EUR 0.01, with a contractual liability to contribute up to EUR 2,500 (you do not need to deposit it upfront).

The catch: when you distribute, the 22% CIT plus 24% personal income tax on dividends (for non-residents) creates an effective combined rate of approximately 22% at the corporate level alone. If you are not an Estonian tax resident, your home country will typically tax the dividend receipt as well. Annual compliance costs in Estonia are higher than Bulgaria — expect EUR 200-400/month for accounting through a service provider, plus EUR 60-120/year for a registered address.

Best for: Tech startups reinvesting all profits for 3-5+ years. Venture-backed companies that will not distribute dividends. If you plan to take money out regularly, Bulgaria is cheaper.

Hungary: Lowest Headline CIT (But High Dividends)

Hungary's 9% corporate tax rate is the lowest headline CIT in the EU. However, most municipalities levy a 2% local business tax (iparuzesi ado), bringing the effective CIT to approximately 11%. The real issue is dividends: personal income tax on dividends is 15%, plus a 13% social contribution tax applies in certain cases (capped). The effective combined rate for a small owner-operator is approximately 24.5%.

Hungary also has the EU's highest VAT at 27%. Registration is relatively straightforward: minimum capital for a Kft. (LLC equivalent) is approximately EUR 100, and the registration fee is around EUR 100. Accounting costs are moderate.

Best for: Companies with high revenue and low distribution needs. Manufacturers and traders who benefit from the low CIT on retained profits. Not ideal for solo entrepreneurs who distribute most of their income.

Romania: The 1% Micro-Company Trap

Romania's micro-company regime taxes revenue (not profit) at 1% for companies with turnover under EUR 100,000. For high-margin businesses (consultants, software developers), this is extraordinarily cheap: on EUR 80,000 revenue, you pay just EUR 800 in tax.

However, Romania's tax landscape changed significantly with Law 141/2025. The dividend tax increased from 10% to 16% (effective 2026), and the standard corporate tax rate rose to 16%. VAT increased from 19% to 21%. For companies above the micro threshold, the combined CIT + dividend rate is now approximately 29.4% — nearly double Bulgaria's 15%.

Minimum share capital is RON 500 (approximately EUR 100). Registration costs around EUR 150. Annual compliance is more complex than Bulgaria due to frequent legislative changes and a more aggressive tax authority (ANAF).

Watch out: The micro-company regime has strict conditions: turnover under EUR 100,000, at least one employee (or pay the 16% standard rate), and specific activity restrictions. Many entrepreneurs set up Romanian micro-companies without understanding these conditions, then face unexpected tax bills when they exceed the threshold or fail to hire an employee.

Poland: 9% CIT for Small Companies

Poland offers a 9% small-company CIT rate for businesses with revenue under EUR 2 million. Above that threshold, the standard rate is 19%. Dividend tax is 19% PIT, making the combined rate approximately 26.3% for small companies and 34.4% for larger ones.

Minimum share capital for a Sp. z o.o. (LLC equivalent) is PLN 5,000, approximately EUR 1,100 — significantly higher than Bulgaria or Romania. Registration costs are around EUR 50 via the electronic system. The Polish tax system is complex, with multiple reliefs (IP Box at 5%, R&D deductions) that can reduce the effective rate for qualifying companies. Compliance costs are moderate to high.

Cyprus: The IP Jurisdiction

Cyprus's CIT rate is 15% (increased from the historic 12.5% to align with OECD Pillar Two minimum). The real attraction is the IP box regime, which can reduce the effective rate to approximately 3% on qualifying intellectual property income. Combined with the non-domiciled status (no dividend tax via SDC exemption for up to 17 years), Cyprus is powerful for IP-heavy businesses.

However, costs are high. Company registration starts at EUR 1,000+ in government fees alone (Registrar of Companies). Annual compliance — accounting, audit (mandatory for all companies), and secretary fees — runs EUR 3,000-6,000/year minimum. Minimum share capital is typically EUR 1,000+. You also need genuine local substance (office, employees, directors) to satisfy the tax authority and EU anti-abuse rules.

Best for: Software companies, licensing businesses, and holding structures with qualifying IP income. Not cost-effective for small service businesses or solo entrepreneurs.

Lithuania: 0% CIT for First Two Years

Lithuania offers 0% CIT for the first two years for small companies (under EUR 300,000 revenue, fewer than 10 employees). After that, the small-company rate is 7%. The standard CIT rate is 15%. Dividend tax is 15%.

For the first two years, the effective combined rate is just 15% (dividends only). From year three onward, the small-company combined rate is approximately 20.95%. Minimum share capital for a UAB (LLC equivalent) is EUR 2,500. Registration costs around EUR 50. Lithuania has a well-developed digital infrastructure and English-language services for company formation.

Latvia: Estonia-Lite

Latvia adopted an Estonia-inspired system: 0% tax on retained profits, 20% CIT on distributed profits. No additional dividend tax at the personal level (for Latvian residents). The effective rate on distributions is therefore 20% — higher than Bulgaria's 15% but with the benefit of tax-free retention.

Minimum share capital for an SIA (LLC equivalent) is EUR 2,800 — the highest among the low-cost jurisdictions. Registration costs approximately EUR 150. Latvia receives less attention than Estonia but offers a similar model with lower compliance costs.

Ireland: Great for Big Tech, Expensive for Everyone Else

Ireland's 12.5% CIT rate is well-known, and the Knowledge Development Box (KDB) reduces the rate to 10% for qualifying IP income. However, Ireland's personal tax system is punitive for owner-operators: dividends are taxed as income at marginal rates of up to 52-55% (including USC and PRSI). There is no separate, lower dividend tax rate.

This means the combined rate for a small business owner taking dividends in Ireland can exceed 55% — among the highest in the EU. Ireland makes sense for large multinationals with substantial operations, or for companies using the KDB on qualifying IP. For a solo entrepreneur, it is one of the most expensive EU jurisdictions.

Annual Running Costs Compared

Registration is a one-time cost. What matters more is the annual burn — accounting, registered address, compliance, and government fees you pay every year:

Country	Accounting (annual)	Registered address	Audit required?	Total annual min
Bulgaria	EUR 1,200-2,400	EUR 0-300	No (below threshold)	EUR 1,200-2,700
Estonia	EUR 2,400-4,800	EUR 60-120	No (small)	EUR 2,500-5,000
Hungary	EUR 1,800-3,600	EUR 200-500	No (small)	EUR 2,000-4,100
Romania	EUR 1,200-3,000	EUR 100-300	No (small)	EUR 1,300-3,300
Poland	EUR 2,400-4,800	EUR 200-600	No (small)	EUR 2,600-5,400
Cyprus	EUR 3,000-6,000	EUR 500-1,000	Yes (all companies)	EUR 5,000-10,000
Lithuania	EUR 1,800-3,600	EUR 100-300	No (small)	EUR 1,900-3,900
Latvia	EUR 2,000-4,000	EUR 200-400	No (small)	EUR 2,200-4,400
Ireland	EUR 3,000-6,000	EUR 200-500	Audit exemption available	EUR 3,200-6,500

Total First-Year Cost Comparison

Here is the all-in cost for year one — registration, legal fees, minimum capital deposit, accounting, and registered address:

Country	Reg + legal	Min capital	Annual running	Total Year 1
Bulgaria	EUR 500-1,500	EUR 1	EUR 1,200-2,700	EUR 1,700-4,200
Estonia (e-Residency)	EUR 400-1,500	EUR 0.01	EUR 2,500-5,000	EUR 3,050-6,650
Hungary	EUR 300-1,500	EUR 100	EUR 2,000-4,100	EUR 2,400-5,700
Romania	EUR 400-1,200	EUR 100	EUR 1,300-3,300	EUR 1,800-4,600
Poland	EUR 300-1,500	EUR 1,100	EUR 2,600-5,400	EUR 4,000-8,000
Cyprus	EUR 2,000-4,000	EUR 1,000	EUR 5,000-10,000	EUR 8,000-15,000
Lithuania	EUR 300-1,200	EUR 2,500	EUR 1,900-3,900	EUR 4,700-7,600
Latvia	EUR 400-1,500	EUR 2,800	EUR 2,200-4,400	EUR 5,400-8,700
Ireland	EUR 500-2,000	EUR 0	EUR 3,200-6,500	EUR 3,700-8,500

When Each Country Makes Sense

Bulgaria: You want the lowest combined tax on distributed profits (15%), lowest setup and running costs, and you value simplicity. You are a solo entrepreneur, consultant, freelancer, e-commerce operator, or SaaS founder. Since 2026, Bulgaria is in the Eurozone — no currency risk.
Estonia: You are building a tech startup, plan to reinvest all profits for 3-5+ years, and want a fully digital setup. You do not need to take dividends in the near term.
Hungary: You have a manufacturing or trading business with high revenue, low distribution needs, and benefit from the 9% headline CIT on retained profits.
Romania (micro): You have a high-margin service business earning under EUR 100,000, you can hire at least one employee, and you accept the 16% dividend tax when you distribute.
Cyprus: You have substantial IP income (software, licensing, patents) and can justify local substance. The IP box at ~3% effective is the real draw, not the 15% standard rate.
Lithuania: You are starting small, want 0% CIT for the first two years, and plan to scale within the Baltics.
Ireland: You are a large company with qualifying IP and substantial operations. Not suitable for solo entrepreneurs due to the punitive dividend taxation.
Poland: You have a Polish client base, need Polish-language operations, or benefit from the IP Box (5% on qualifying income).
Latvia: Similar profile to Estonia — reinvesting profits — but you prefer a less crowded jurisdiction with lower compliance costs.

Why Bulgaria Wins for Most EU Entrepreneurs

For the majority of EU entrepreneurs — those running service businesses, consulting, e-commerce, SaaS, or freelance operations and taking regular distributions — Bulgaria offers the best package in 2026:

Lowest combined tax rate: 15% (10% CIT + 5% dividend). No EU country matches this for distributed profits.
Lowest registration cost: EUR 28 government fee + EUR 1 minimum capital.
Lowest running costs: Accounting from EUR 100/month, no mandatory audit for small companies.
Eurozone member since January 2026: No currency risk, no conversion costs, full credibility with EU partners.
Simplicity: One flat rate for everything. No local business taxes, no surcharges, no complex reliefs to navigate. The tax code fits on one page.
Freelancer alternative: If your income is under EUR 100,000, a freelancer registration at 7.5% effective rate is even cheaper than a company.

This is not to say Bulgaria is universally best. Estonia genuinely beats Bulgaria if you never distribute profits. Cyprus genuinely beats Bulgaria for IP income at 3% effective. Hungary's 9% CIT is lower than Bulgaria's 10%. But for the typical entrepreneur who earns profit, pays tax, and moves money to their personal account — Bulgaria's 15% combined rate is unmatched in the EU.

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Frequently Asked Questions

Which EU country has the lowest corporate tax rate? +

Hungary has the lowest headline CIT at 9%, plus a ~2% local business tax in most municipalities. However, the combined rate including dividend tax (~24.5%) is significantly higher than Bulgaria's 15% (10% CIT + 5% dividend). The lowest combined rate for money that reaches your personal account is Bulgaria at 15%.

What is the cheapest EU country to register a company? +

Bulgaria. Government registration fee is EUR 28, minimum capital is EUR 1, and total first-year costs (including legal, accounting, and registered address) start at approximately EUR 1,700. Romania and Lithuania are comparable on registration costs but have higher annual running costs or higher combined tax rates.

Is Estonia's 0% corporate tax really free? +

Only while profits remain in the company. The moment you distribute a dividend, Estonia charges 22% CIT on the gross distribution (or 14% for regular distributions under certain conditions). For non-residents, your home country may tax the received dividend as well. If you plan to reinvest all profits for several years, Estonia's deferral is valuable. If you plan to take regular distributions, Bulgaria's 15% combined rate is lower.

How much does it cost to register a company in Bulgaria? +

Government registration fee: EUR 28 (electronic filing). Minimum share capital: EUR 1. Legal fees for full formation (articles of association, bank capital deposit, Commercial Register filing, tax registration): EUR 500-1,500 depending on the service provider. Total first-year costs including accounting: approximately EUR 1,700-4,200.

Can I register a company in Bulgaria without living there? +

Yes, registration can be done remotely via Power of Attorney. However, if you want to be the company's tax-resident director and benefit from Bulgaria's 10% flat personal tax, you need a residence card and should spend 183+ days in Bulgaria. A company without a resident director may face substance challenges from your home country's tax authority.

What about Romania's 1% micro-company tax? +

Romania's micro-company taxes revenue (not profit) at 1% for companies under EUR 100,000 turnover. This is very cheap for high-margin businesses. However, Romania increased dividend tax to 16% (from 10%) under Law 141/2025, effective 2026. You also need at least one employee. For companies above the micro threshold, Romania's combined rate (~29.4%) is nearly double Bulgaria's 15%.

Is Cyprus still worth it for a small company? +

Only if you have substantial IP income. Cyprus's CIT is now 15% (up from 12.5%), and the real advantage is the IP box regime (~3% effective on qualifying income) and the non-domiciled dividend exemption. But registration costs EUR 1,000+, annual compliance runs EUR 5,000-10,000, and you need genuine local substance. For a small service business, Bulgaria is significantly cheaper on every metric.

Which EU country is best for a one-person online business? +

Bulgaria. The 15% combined tax rate (10% CIT + 5% dividend) is the lowest in the EU for distributed profits. Registration costs EUR 28, minimum capital is EUR 1, and annual accounting starts at EUR 100/month. Alternatively, if your income is under EUR 100,000, registering as a Bulgarian freelancer gives you an even lower effective rate of 7.5%. Since January 2026, Bulgaria is in the Eurozone.

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Disclaimer: This article provides general information about company registration and taxation across EU jurisdictions. Tax rates and regulations change frequently — all figures are verified as of April 2026 but may be superseded. This does not constitute legal or tax advice. Registration and tax planning should be coordinated with qualified advisors in each relevant jurisdiction. Last updated: April 7, 2026.