“We are heading to Sofia. Get ready!”
While this might sound like a group of friends deciding on the destination for their next trip, it is how bunq, a Campus X member, announced its expansion plans to the world back in 2020.
Isn’t it curious why a leading Dutch challenger bank, headquartered in the mesmerizing Amsterdam and serving clients across 30 European countries, decided to make Sofia its second home? It turns out there are lots of reasons (aside from the strategic location, good food, and weather that go by default).
On the one hand, the bunq team wanted a place where their culture could thrive - fun, friendly, open-minded, and just like them - a little crazy for freedom. On the other hand, Sofia was quickly shaping up as a booming startup destination with many innovative companies and high-skilled tech talent. Or, as the bunq team put it, people matching their values of “getting things done.”
Every year, dozens of tech companies follow in bunq’s footsteps, setting up shops in our lovely country. And so should you.
5 reasons to open a company in Bulgaria
We get it - the mesmerizing beaches, breathtaking mountain views, and picturesque camping areas across our endless rivers are enough of a temptation to want to visit Bulgaria. For many digital nomads, they have proved enough of a reason to relocate here. While they aren’t sufficient to motivate startups and scaleups from a strategic perspective, fortunately, our country offers solid business arguments to consider expanding here.
Bulgaria has everything you need to position your company for success, from its strategic location, low taxes, and favorable business environment to access to a skilled workforce and a booming tech scene.
1. Strategic location and EU market access
As part of the European Union, companies operating in Bulgaria have access to the world’s biggest single market, with 27 member countries, roughly 500 million people, 24 million companies, and uniform rules and regulations that increase transparency and de-risk the process of doing business.
By opening an office in Bulgaria, companies can take advantage of the “four freedoms” of movement, including goods, people, services, and capital, from one EU Member State to another.
Aside from accessing a market with a EUR 16 trillion GDP, businesses can also take advantage of Bulgaria’s partnership agreement with the European Commission on direct funding through several mechanisms, including the European Regional Development Fund, the European Social Fund+, the Cohesion Fund, the Just Transition Fund, and the European Maritime, Fisheries and Aquaculture Fund.
Furthermore, Bulgaria has adopted the EU Blue Card, allowing companies operating here to hire as many non-EU highly-qualified specialists as needed, easing the process of shaping your team as you deem fit (learn more in the dedicated guide of our partners, PwC).
The EU membership aside, Bulgaria is a tempting choice for many startups and scale-ups due to its strategic location between three continents. Sofia is well-connected with most major cities worldwide and is between one and three hours away from the biggest European tech hubs, such as Paris, Berlin, London, Amsterdam, and Stockholm.
2. Low taxes and favourable business environment
With a 10% income corporate tax, Bulgaria offers the second lowest rate in the EU (after Hungary with 9%). The dividend tax is 5%, while, alongside our lovely neighbor, Romania, we offer the lowest personal income tax rate in Europe by far - 10%. We also maintain tax treaties with over 70 countries, allowing for special tax treatment for international entrepreneurs like you.
As an employer, you are responsible for between 18.92% and 19.62% of the total social security and health insurance contributions, while your employee covers 13.78% applicable to both EU and non-EU residents (for further details, check out PwC’s detailed guide on the topic).
The VAT is 20%, and we don’t have any net worth taxes. Furthermore, our low debt-to-GDP ratio means we have low fiscal pressure to raise taxes in the future. All tax information is as of August 2024. But low taxes alone aren’t (and shouldn’t) be enough of a reason to choose Bulgaria as the home of your new office. Other factors are at play when evaluating how friendly the business environment is.
Fortunately, we shine there, too. According to a Euronews Business ranking, Bulgaria is the best place to start a new business among Central and Eastern European countries. The analysis notes that the institutional environment is open and welcoming to local and foreign investors and entrepreneurs. Furthermore, it singles out the comparatively low bureaucracy around opening a company and the option of doing it remotely. In fact, you can open a company in Bulgaria in less than a week without even being present at the moment of registration.
Wonder where to start? We can connect you with our partners at PwC Bulgaria, who can help you set up a Bulgarian legal entity, saving you time and resources and guiding you with tailor-made tax consultancy services.
3. Skilled talent pool and cost-efficient workforce
It is no surprise that our country was known as the "Silicon Valley" of the Eastern Bloc. From the invention of the first electronic digital computer in the 1930s to the first digital watch in the early 1970s, Bulgarians have been no strangers to innovations. Fortunately, the success story of our technology sector is not just a relic of the past; it continues to be written by a cohort of talented young professionals today.“If you want first-class mathematicians, try looking in Bulgaria,” notes William Fitzsimmons, Dean of Admissions & Financial Aid at Harvard College, in a 2011 opinion piece for the New York Times. Considering all the empirical evidence, how can one argue?
Bulgaria is in the top five countries in competitive programming medals won in the all-time ranking of the International Olympiad in Informatics. Our talented youngsters are also championing global mathematics and linguistics competitions regularly. Fortunately, Bulgarians' renowned academic success also translates into the business sector, especially in the IT industry. According to a Hacker Rank study, Bulgaria has some of the best programmers, ranking 12th globally and 8th in Europe. The talent pool is very diverse, too. Bulgaria is Europe's leader in terms of women employed in the ICT industry and among the top three nations with the highest number of women researchers.
Every year, over 6,500 individuals obtain degrees in fields suitable to the needs of the IT industry. Private software academies like Telerik Academy continuously raise the bar for producing world-class talent. Oh, and did we mention that it will be next door if you choose Campus X as the headquarters of your new Bulgarian branch?
Currently, the IT industry employs over 58,000 people, with up to 25,000 working for startups. The Bulgarian IT sector’s revenue grew eight times between 2011 and 2023, with the jump expected to reach 12x by 2025. You will also be happy to discover that access to our top-tier and highly motivated talent is accompanied by competitive labor costs. In fact, Euronews Business takes it a bit too far for our liking by suggesting that choosing Bulgaria to start a business means EU entrepreneurs can take advantage “of cheap labor.” However, it also stresses that our talent is “highly-skilled and multilingual,” so we take the kudos.
In the IT industry specifically, salaries in Bulgaria are over 50% lower than the median in higher-paying European countries like Germany, Sweden, and France. We also have the lowest minimum wage in Europe by far.
4. Everything you need to ensure an amazing work-life balance for your team
Bulgaria’s low taxes, favorable business environment, and skilled and affordable talent pool won’t necessarily require your team members to sacrifice something, especially the high quality of life or enjoy their time here. When it comes to outdoor activities, you might be puzzled to find out that, in a land of 111,000 sq. km (20% smaller than New York State), we have 40 mountains and 540 rivers. The beautiful gems across the beaches of the Black Sea, as well as the Aegean Sea, are just a mere four hours drive away from Sofia. Furthermore, we have one of the oldest cultures in Europe. Regarding continuous political existence, San Marino is the only European country that pre-dates Bulgaria.
But Bulgaria isn’t only beautiful in nature. As a real European capital, Sofia shines with its event-packed cultural life, vibrant communities, and creative environment. In addition, the Bulgarian educational system focuses significantly on languages, with 98% of high school graduates studying a foreign language - a major prerequisite to make you feel at home.
Enjoying all those amenities will also be way more affordable than in other European capitals. For example, the living costs in Copenhagen and Berlin are 90.6% and 60.7% higher than in Sofia, respectively. Sofia ranks 107th out of 147 European cities in terms of cost of living.
5. Low business and operational costs
To take advantage of the above benefits, you must first find an office for your company. So, let’s cut to the chase and see how much it will cost you.
Different research (e.g., this and this) finds that Sofia is Europe's capital city with the lowest office costs. But let’s use numbers for context. A dedicated desk in Campus X’s coworking space starts at EUR 180/month, while the monthly cost for a desk in a private office starts at EUR 195. These competitive office space rents translate into tangible savings for your business.
Bulgaria’s competitive business environment extends to affordable overall operational costs, among the lowest in the EU. Additionally, Bulgaria’s government provides various incentives for foreign investments, such as tax credits, further reducing the financial burden on businesses and enhancing profitability.
Simply put, Bulgaria offers the best bang for your buck in the EU.
Sofia’s tech ecosystem is growing, and Campus X is a major reason why
Sofia has quickly emerged as one of the tech centers of Central and Eastern Europe. Launching a new office here puts your company on the radar of leading venture capital funds. For example, in 2023, Sofia-based startups raised EUR 170 million in VC funding. Campus X has a strategic collaboration with Eleven Ventures, one of the largest accelerators in Europe. Headquartered at our premises, over the years, Eleven has invested in many of our members and supported them with access to leading mentors.
“Being part of Campus X provides a sense of security. We can focus on scaling the business, knowing that we have all the help we need when we need it. As a business owner, I can benefit from world-class mentors, advice, and guidance from successful entrepreneurs with proven track records. And finally, I have access to funding if required,” shares Benjamin Kane, CEO of our member company TechPods.
Today, over 1,300 aspiring Bulgarian startups are conquering the world from Sofia. We are happy to say that many of them have chosen Campus X as their headquarters, like Dronamics, for example. In the joint market analysis of DealRoom, Uniqua Ventures, Cogito Capital, and Vestbee, both companies are identified among the present and future successes of Central and Eastern Europe.
The story of Payhawk, Bulgaria’s first unicorn to date and one of Europe’s fintech sensations, started from just four desks in a shared office at Campus X. We were proud to watch the company soar to global fame and opening offices across the world’s top innovation hotspots, including Paris, Berlin, New York, London, and more.
Curious about more inspirational stories? Meet Campus X’s member companies here.
Interested in opening a company in Bulgaria? We can help
We should be honest - while Bulgaria is known as “The Land of Roses,” not everything in our garden is rosy. Like any country, we have our issues and don’t try to hide them. However, as the experience of all the companies that have chosen Sofia and Campus X as their Bulgarian home has shown, they aren’t sufficient barriers to prevent your business from thriving. And if they prove they are, the Campus X community can help you bring them down.
“Campus X has been helping us transfer our bunq culture into a vibrant, integrated ecosystem and provided us with the needed solutions before we saw the roadblocks to our operations,” explains bunq’s former HR Business Partner, Kristiana Hadjilarska.
So, as in the typical style of bunq love, “If you’re ready to get things done, Bulgarian style,” get in touch with us, and we can help you kickstart a journey to remember.
FAQs about opening a company in Bulgaria
Why should I consider opening a company in Bulgaria?
You should consider opening a company in Bulgaria for several reasons, including its strategic location and EU market access, low taxes, favorable business environment, skilled talent pool and cost-efficient labor, low business costs, thriving tech ecosystem, and high quality of life that your team can benefit from.
What are the tax benefits of starting a business in Bulgaria?
What is the talent pool like in Bulgaria?
What is the quality of life like in Bulgaria?
How do operational costs in Bulgaria compare to those of other European countries?
Why is Sofia considered a growing tech ecosystem?
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