Top 5 Tax Residences in Europe for Freelancers

(Sources: official tax summaries and Numbeo/UN/World Happiness data as of 2024-2025. Cost index: lower = cheaper. Quality of Life index: higher = better. Happiness on scale 0-10.)

Tax system:

Bulgaria offers a simple flat tax of 10% on personal income, one of the lowest in Europe. This flat rate applies to self-employed profits after expenses. In our scenario of €40k profit, that’s only about €4,000 in income tax – a steal compared to Swiss rates. Social security contributions are mandatory but also relatively low by Western standards. The total social + health insurance rate is around 32% of income, but importantly, it’s applied to a capped base. Self-employed people declare an income for contributions with a minimum (~€5,000/year) and maximum (~€24,000/year) threshold. In practice, many freelancers pay on the lower end of the scale. Roughly BGN 1077 monthly is the minimum base in 2025 (about €6600/year) and the max is BGN 4130 monthly (about €25k/year). The result: even if you earn more, your annual social contributions top out around €5,000–€6,000. Adding the 10% flat tax, a freelancer making €40k profit faces about €10,000 total tax+social – an effective burden ~25% of income. Compare that to nearly 30% just for Swiss health insurance and pension alone!

Healthcare:

Social contributions include public health insurance (8% of income), granting access to Bulgaria’s state healthcare. Many expats still opt for some private care which is affordable. There’s also a 20% VAT, but as a freelancer you only charge/register if your turnover exceeds BGN 100k (≈€50k).

Quality of life:

Bulgaria is a bit of a hidden gem in terms of livability vs cost. It’s an EU member with a low cost of living index ~45 (meaning everyday costs are less than half of Western European norms). Renting an apartment or eating out is very cheap. Numbeo’s Quality of Life Index scores Bulgaria around 145, which is quite solid. Big cities like Sofia and Plovdiv offer a vibrant lifestyle at a fraction of Zurich’s prices. Safety is decent and improving, and infrastructure, while not Swiss-level, is satisfactory for most. Bulgaria’s Human Development Index (HDI) around 0.80 is high for a middle-income country, reflecting good education and lifespan. It ranks mid-table in happiness (score ~5.5 out of 10), on par with some wealthier neighbors. In short, you’ll spend less and still enjoy modern European living – though expect some bureaucracy and learning a Cyrillic alphabet!

Ease of moving:

As an EU/EFTA citizen, you can reside and freelance in Bulgaria with minimal fuss (registering as self-employed and getting a local ID card). The country actively courts IT freelancers and entrepreneurs with its low taxes. Language shouldn’t be a huge barrier – younger Bulgarians often speak English, and there are growing expat communities.

Tax system:

Romania is another EU country with a flat 10% income tax for individuals. Simple and low – you keep 90% of your profit. Social contributions for freelancers consist of 25% pension (CAS) and 10% health (CASS), mirroring the rates for employees. However, these are subject to minimum thresholds and caps, which significantly reduce the hit on a €40k profit. Essentially, if your self-employed net income exceeds about RON 48,600 (~€9,800), you pay a fixed pension contribution of 25% of that threshold (≈RON 12,150 ≈ €2,450). For health insurance, earnings above RON 24,300 (~€4,900) incur 10% of that amount (RON 2,430 ≈ €490) at minimum, and above ~RON 24k you contribute 10% of actual income until a higher cap at 60× minimum wage (which our €40k does not reach). In plain terms: with €40k profit (~RON 200k), a freelancer would owe roughly RON 20k in health (10%) and hit the capped RON 24.3k for pension. That totals about RON 44k (~€8,900). Add the flat income tax (~RON 20k, €4k), and we get ~RON 64k (~€12,900) total. However, many freelancers can opt for simplified regimes. Romania offers a lump-sum tax option (“normă de venit”) for certain professions where you pay 10% on a predetermined income regardless of actual earnings – a boon if your expenses are low. Moreover, if your earnings are below certain thresholds, you might not be required to pay the full social contributions (for example, pension is optional below ~€9.8k profit). Realistically, a savvy freelancer might structure to pay around €9,000 total (income tax €4k + social ~€5k) on €40k profit – about 22.5% effective. That’s in line with Bulgaria or even lower.

Healthcare:

The 10% health contribution grants access to Romania’s national health system. Public healthcare in Romania is universal but can be hit-or-miss in quality – private clinics are widely used by expats and are still cheap by Swiss standards. Many expats carry private insurance for better service, but even paying out of pocket is affordable (a basic dentist visit might be €20, for instance). In short: mandatory health insurance ~€500/year (given the minimum contribution), and you can top up with private coverage if desired.

Quality of life:

Romania has been trending upward in both economic development and livability. It’s a country of 19 million with bustling cities like Bucharest, Cluj, and Timișoara that have become tech and digital nomad hubs. Cost of living is very low (index ~40) – your Swiss francs go a long way here. Safety is generally good, and crime rates are low (outside of petty theft). Romania scores 0.83 on HDI, indicating high human development, and a happiness score around 6.4 which is above the world average. Locals are friendly, many speak English (especially the younger generation and in IT sectors). You get four seasons, beautiful nature (the Carpathian mountains, Black Sea coast), and rich history. Internet and mobile infrastructure are excellent (Romania often ranks in the top 10 for internet speed worldwide), which is great for freelancers. One thing to be prepared for is bureaucracy – tax filing and administration can be convoluted (e-filing is required, documents in Romanian), so you might want an accountant’s help, but the taxes themselves are low. Overall, Romania offers a compelling mix of low costs, low taxes, and improving quality of life.

Residency ease: As an EU/EFTA national, you have the right to live and work in Romania; you’ll just need to register your residence after 3 months. Many freelancers open a PFA (authorized sole trader) which is straightforward if you meet certain qualifications. The country also has a digital nomad visa now, but EU folks won’t need it. English is widely spoken in business and there are active expat communities especially in Bucharest and Cluj.

Tax system:

Hungary runs on a flat-tax model as well. The personal income tax is 15% flat on all income – so €40k profit incurs €6,000 tax. Where Hungary really shines is its unique small-business tax options that can dramatically cut your social contributions. The standard social security contributions include an 18.5% social insurance (covers pension, health, etc.) and a 13% social tax (usually paid by employers). A regular employee thus sees ~33.5% of gross go to social funds. However, freelancers in Hungary have special regimes. One popular scheme (for those who qualify) was the KATA flat tax – historically ~€100/month flat payment including taxes, though it was reformed in 2022 and now limited in scope. Another is the “flat-rate” self-employment taxation where you deduct a fixed percentage of income as expenses and pay tax on the rest (similar to Czech’s system). Regardless, even if on standard terms, a self-employed person typically pays only the 18.5% personal contribution and can often base it on minimum wage. As of 2025, minimum wage is HUF 290,800/month (~€750). That means you could declare that as your base for contributions, paying roughly HUF 53,000/month (18.5%) into social security – about HUF 636k/year, which is around €1,700/year. Indeed, many reports show freelancers’ social contributions capped around €2,000 annually if they keep to minimum bases. Healthcare is included in this contribution (Hungary has national health service coverage for contributors). So in our €40k profit scenario, effective taxes ~20% (€6k income tax + ~€2k social). Even if you ended up paying some employer social tax on top, the total would still be far lower than Western Europe. And note: Hungary’s VAT is high (27%, the EU’s highest), but as a small freelancer you might remain below the registration threshold (~€48k revenue) and avoid charging it.

Healthcare and benefits:

By contributing, you’re covered by Hungary’s public healthcare, which is quite decent (Hungary has a long medical tradition, though hospitals are sometimes underfunded). Many expats use a mix of public for emergencies and private clinics for routine care (which are affordable). Being in the EU, you also get an EHIC card for coverage when traveling in Europe.

Quality of life:

Hungary has a lot to offer culturally and socially. Budapest, the capital, is one of Europe’s most beautiful and vibrant cities – and still cheaper than Western capitals. Hungary’s cost of living index is ~50 (so about half the cost of Switzerland on average). Groceries, transport, and services are inexpensive, though Budapest housing costs have risen (still, you can rent a city-center flat for perhaps a third of Zurich’s rent). The country ranks 0.85 HDI (very high development) and its happiness score is about 6.0 – people report a good quality of life, though challenges remain in areas like political freedom or healthcare funding. For a freelancer, daily life is comfortable: cafes with Wi-Fi, great public transportation, and plenty of networking opportunities (Budapest has many expat entrepreneurs). Safety is good; Budapest is as safe as any big European city (just watch out for pickpockets in tourist zones). Another benefit: Hungary sits in Central Europe, so travel to other countries is easy – Vienna is 2 hours by train, Prague 5 hours, etc. If you enjoy thermal baths, classical music, or a robust nightlife, you’ll be happy here. On the downside, the language (Hungarian) is famously difficult – but in Budapest you can get by with English/German quite well. Smaller towns are more language-challenged but also very affordable and charming.

Residency:

Hungary is in Schengen and EU, so Swiss citizens can move freely. You’ll register an address and show income means. Setting up as a freelancer (“EV” sole proprietor) is straightforward and low-cost. One thing to note is that the Hungarian tax authority offers a very attractive “Small Business Tax” (KIVA) and other incentives for those who incorporate – but even as an individual, the low flat tax makes life simple. And with a bit of accounting advice, you might pay even less via special regimes. Hungary in 2025 still strives to be competitive tax-wise (they have the lowest corporate tax in EU at 9%). Bottom line: easy setup, simple low taxes, and a lively, culturally rich environment.

Tax system:

The Czech Republic combines low taxes with generous deductions for the self-employed. The standard income tax is 15% on income up to a rather high ceiling (~CZK 1.68 million, approx €68k), beyond which a 23% rate applies for the portion above (a “solidarity tax” on high earners). In practice, most freelancers will just pay 15%. But here’s the kicker: Czechia allows lump-sum expense deductions by law for freelancers (known as paušální výdaje). For many service businesses and professions, you can deduct 60% of your revenue as expenses regardless of your actual costs. For example, if you made €60k from freelancing, you could claim €36k as “expenses” without needing receipts, leaving only €24k taxable – and then pay 15% of that, about €3,600 in tax. That effectively is just 6% of your gross revenue, or 9% of your actual €40k profit – very low. Even if your actual expenses are small, the tax law lets you assume that flat 60%. This lump-sum scheme greatly reduces the tax paid by freelancers (and yes, it’s totally legal and common – it’s meant to simplify things). On top of that, since 2021 Czechia introduced an optional flat-tax scheme for self-employed (“paušální daň”), where you pay a single monthly amount that covers income tax, social and health – in 2025, the basic band is CZK 8,716 per month (about CZK 104k/year, ~€4,200) and it covers everything if your revenue is under CZK 1 million (about €40k). In other words, many small freelancers can just pay €4k a year total and have no additional filings – which is only 10% of a €40k profit! Even outside that flat-tax program, the social contributions are moderate. Social security (pension+unemployment) is 29.2% of a self-assessed base, and health insurance is 13.5%. But crucially, the assessment base for self-employed is typically only 50% of your taxable profit (by default rule). So if after the 60% expense deduction your taxable profit is, say, €24k, you might only pay social on €12k. At 29.2%, that’s ~€3,500/year for social security. Health insurance minimum in 2025 is CZK 3,399/month (~€140/mo), about €1,680/year, unless your half-profit base dictates a bit more. All told, the freelancer in our scenario might pay on the order of €2,400 income tax + €5,000 social/health ≈ €7,400 total, which is about 18.5% effective. Some pay even less via the flat-tax package. The Czech tax system actively favors freelancers relative to employees, which is one reason the country is brimming with independent consultants.

Healthcare and social benefits:

By paying into the system, you receive public healthcare coverage. Czech healthcare is quite high-quality, one of the best in CEE. The universal health insurance funds cover most treatments with small co-pays. Many doctors speak English, especially in Prague. Social security contributions entitle you to a state pension (Czechia has a fairly good pension system) and unemployment support if needed. If you opt for the flat-tax regime (8,716 CZK/mo in Band 1), it includes a predetermined contribution to social and health as part of that amount. Note that Czechia has a maximum annual social security base of 48× average wage (over CZK 2.2 million, ~€90k) – not a concern for €40k profit, but it caps contributions for high earners.

Quality of life:

Czech Republic consistently ranks well for quality of life. It’s a Central European EU country with a stable economy and democratic institutions. It scores 0.895 on HDI (very high development), similar to say Austria. Prague, the capital, is renowned for its beauty, history, and liveability – and is a major expat hub. Brno and other cities are also popular with remote workers (Brno has a big tech scene). The Quality of Life Index is ~175 – one of the highest in the region, reflecting excellent safety, healthcare, education, and infrastructure. The cost of living is moderate (index ~55) – higher than Bulgaria or Romania, but still much cheaper than Switzerland. For example, Prague rent might be €700 for a nice one-bedroom (a third of Zurich’s), and a beer is $2. The Czech Happiness score ~6.8 is relatively high; Czechs report good life satisfaction (perhaps all that beer and beautiful architecture helps!). The country is very safe, with low crime rates. As a freelancer, you’ll find plenty of co-working spaces, cafes, and a supportive expat community. English is commonly spoken in Prague; elsewhere you might need some Czech, but many young people know English. Culturally, it’s a fantastic place to live – rich in arts, music, and outdoor activities (the countryside castles and hikes are lovely).

One potential drawback: housing costs in Prague have risen fast, and availability can be tight. But compared to Swiss prices, it’s still a bargain. Also, Czech bureaucracy can be old-school (paper forms, office visits) though it’s improving with online systems. Still, relative to many places, Czechia is very welcoming for freelancers – it even has a special long-term visa for freelancers (“Zivno visa”) for non-EU folks. As a Swiss/EU citizen you won’t need that; you can register after arrival with ease.

Residency:

Thanks to bilateral agreements, Swiss citizens can reside in Czechia like EU citizens. You’ll need to get a local trade license (“živnostenský list”) if freelancing, then a simple residence permit for EU nationals. Plenty of relocation services exist, but the process is quite straightforward. Once set up, you’ll enjoy living in one of Europe’s most charming countries, with weekend trips to Vienna, Berlin or Budapest easily done. And your tax burden will be laughably low, especially if leveraging lump-sum expenses – many freelancers effectively keep ~85% or more of their earnings after taxes and social contributions.

Finally, an outlier that isn’t in the EU – Georgia. This small Caucasus nation often pops up in “digital nomad” and low-tax residency lists, and for good reason. Georgia has some of the most favorable tax schemes in the world for solo entrepreneurs, combined with a cost of living that’s among the lowest in Europe (if we count it as Europe geographically/politically, which many do for expat purposes).

Tax system:

Georgia’s crown jewel for freelancers is the “Small Business” status. If you register as an individual entrepreneur and your revenue is under a threshold (recently raised to ₾500,000 Georgian Lari per year, roughly €160k), you qualify for a 1% tax on your gross turnover. Yes, just 1% on revenue – effectively maybe 1–2% of profit in many cases. In our scenario of €60k revenue, €40k profit, you’d pay €600 in tax for the year – almost nothing. This is not a gimmick; it’s an official tax regime to attract entrepreneurs. Even if you don’t qualify as a “small business”, the standard personal income tax in Georgia is a flat 20%, still reasonable. But virtually all freelancers will opt for the 1% scheme (called Micro/Small Business status). There’s also a micro-business category (for very small operations) that can be tax-free up to a lower threshold, but the 1% small business route covers most needs up to ₾500k turnover which is very generous.

And it gets better: Georgia imposes no mandatory social security taxes on the self-employed. There is a pension scheme introduced in 2019, but it’s voluntary for self-employed and foreigners. If you’re under 40 and formally employed, you’d be auto-enrolled to contribute 2% (with employer 2% match and government 2%) – but as a foreign freelancer, you can simply not opt in (or opt in voluntarily at 4% of income if you want local pension benefits). Health insurance contributions are also not mandated by the state. Georgia has a basic universal healthcare program funded by general taxes, but it’s very limited and only for citizens below a certain income. As a foreigner, you’re expected to get private health insurance, which is readily available and extremely affordable. Local insurance plans for expats can cost around ₾800–₾900 per year for comprehensive coverage – that’s roughly $300 (€280) a year for a solid plan covering major medical needs. Even basic plans can be as cheap as ₾500/year (≈€170). Many expats choose to pay out-of-pocket for routine care since it’s cheap (an English-speaking GP visit for $20, dental cleaning for $15, etc.) and maybe hold a policy for emergencies. So, your “health tax” might just be ~€300–€500/yr for private insurance – far less than Swiss mandatory premiums (which are around CHF 378 per month on average). In summary, our €40k-profit freelancer in Georgia would pay about €600 in income tax + maybe €300 in health insurance = €900, let’s round up to €1,500 (4% effective) to include any miscellany. That is astonishingly low. It’s why Georgia has become a magnet for entrepreneurs from higher-tax countries.

Quality of life:

Here’s where the trade-offs come in. Georgia is a developing country (population ~3.7 million) at the crossroads of Europe and Asia. You cannot expect West European levels of infrastructure or public services. However, many expats find the quality of life very high in a personal sense. Tbilisi, the capital, is a vibrant city with a booming hipster and arts scene, plenty of cafes (great Wi-Fi), co-working spaces, and a low-cost, laid-back lifestyle. The cost of living index is ~35 – meaning it’s about the cheapest on this list. Rents in Tbilisi are rising but still perhaps €300 for a nice 1-bed. Groceries, dining out, transport – all very cheap (a metro ride $0.20, a decent meal $5). For a Swiss, daily costs will feel like pocket change. Georgia’s HDI is ~0.81 – a bit lower than EU states but in the “high” category, reflecting decent education and life expectancy for its income level. The happiness score is around 5.4, a bit below Bulgaria’s, potentially reflecting economic struggles for some locals. As an expat, you might experience higher satisfaction because your foreign income goes far here. Crime is relatively low; walking in Tbilisi feels safe, and hospitality toward guests (“supra” feasts and toasts) is legendary.

On the other hand, quality of infrastructure can be hit or miss: traffic is chaotic, sidewalks can be uneven, and dealing with bureaucracy or banking might test your patience (though Georgia is actually quite business-friendly with many services like banking and tax filing digitalized). Healthcare quality is improving – there are some international-standard hospitals in Tbilisi and Batumi, but for very serious conditions some expats prefer flying to Turkey or Western Europe. Environmentally, Tbilisi has an air pollution issue (from traffic) and the summers are very hot. But the country’s nature is stunning – from Caucasus mountain villages to Black Sea beaches and wine country (Georgia is the cradle of wine-making). If you enjoy adventure and don’t mind a bit of grit, Georgia can be incredibly rewarding.

Community and language:

A big plus is that Georgia allows visa-free entry for Swiss/EU citizens for up to 1 year straight – essentially a de facto digital nomad visa without paperwork. Many foreigners just come, live, and if they want to stay longer, do a quick border run to reset the 1-year timer. The expat/digital nomad scene in Tbilisi has grown a lot, so you’ll find meetups and peers. English is fairly widely spoken among younger Georgians and in tourist-facing places, though Russian is still a common second language for locals. Georgian language itself is very hard (and has its own unique script), but learning a few phrases is appreciated. High-speed internet is cheap and common.

In summary:

Georgia offers ultra-low taxes and cost – you keep virtually all your earnings – in exchange for adapting to a different culture and a developing environment. Many Swiss freelancers might find it a refreshing change (the country has a rich history, warm people, and did we mention 1% tax?). But it’s definitely further afield – not an EU member, though it aspires to closer ties. For those willing to step outside the EU comfort zone, Georgia can be a freelancer’s paradise where you can live well on a fraction of what you’d spend back home. Example perspective: one could easily live on $1,000/month in Tbilisi quite comfortably. And if you’re earning €40k, you’re relatively affluent there. Plus, travel is easy – direct flights connect Tbilisi to many EU cities and to Dubai/Istanbul hubs.

Now that we’ve covered the Top 5, let’s briefly compare these with Switzerland to put things in perspective.

As you can see, the differences between all those countries are stark. Georgia’s almost symbolic taxes stand out (it’s an order of magnitude less than Swiss burdens), but even the EU countries in Eastern Europe take under 1/4 of income in total obligations, versus about 1/3 in Switzerland. And living costs in those countries are 50–70% lower than in Swiss cities. The Czech Republic offers an excellent balance of moderately low tax and high livability, while Bulgaria and Romania maximize savings at the cost of a bit more cultural adjustment for some. Hungary hits a nice middle ground with its flat tax and low costs, in a country known for its hospitality and central location.

Final thoughts: If you’re a Swiss (or any Western European) freelancer, these five places are worthy of consideration for relocation or even just a temporary base. They allow you to significantly reduce your tax bill and thus potentially work less or save more, all while experiencing new cultures and lifestyles. You might trade the pristine Swiss orderliness for the colorful chaos of the Balkans or the medieval charm of Prague, but that could be an enriching trade. Importantly, all five options are freelancer-friendly: they have specific regimes or flat rates that simplify life for independent workers, and growing communities of expats and nomads to plug into.

Of course, do your due diligence: consult local tax advisors, consider language barriers, and visit if you can to feel out the environment. But with remote work on the rise, the world can truly be your office – and basing that office in a low-tax, low-cost country can be a smart move financially.

Whether you’re seduced by Sofia, recharging in Bucharest, hustling in Budapest, playing it cool in Prague, or going off-piste to Tbilisi – viel Glück on your freelancing journey or as they say in Georgian, Good luck! (წარმატებები! Tsarmatebebi!)