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International Business Investment in Bulgaria

Bulgaria’s accession to the European Union opened up a vast global trading association to the once communist country, whose former trading partners were limited to affiliates of the Soviet bloc. The economic growth rate of around 5.5% - 6% a year coupled with some of the lowest taxation rates in Europe has attracted investors from across the globe. Many have been pleasantly surprised by the wealth of commercial talent available here and have set up arms of their famous international businesses. This has caused more jobs and contributed to the country’s economic health.

Brainy Bulgarians

Many surveys have highlighted Bulgaria’s exceptionally well-developed educational system, which offers strong electronics, engineering, and computer science skills. With over 47 universities situated in 26 different towns there are over 5,000 Bulgarian students majoring in computer science and another 5,000 majoring in electrical engineering, mathematics, physics, and biotechnology. Compared to the rest of Europe this is proportionally high; The World Bank and The Economist rank Bulgaria in fifth place globally for sciences and eleventh for mathematics. MENSA International ranks the country in second place in the world in IQ tests and second in the world in SAT scores. The Brainbench Global IT IQ report ranked Bulgaria in eighth place globally for certified IT professionals.  

Investing in Information Technology

Bulgaria's real IT strength lies in the fact that young Bulgarians are very technically aware and they speak fluent English. Within the IT sector, there have been a number of developments; many international information technology companies find Bulgaria’s 0% export tax attractive as well as its comparatively low salaries and highly skilled workforce. Several international ICT companies have set up service and call centres and software development companies. Another area, which has attracted much international interest are the increased opportunities for government tenders. From an IT standpoint, Bulgarian bureaucracy lags way behind the rest of Europe, but this is about to change as more and more government offices upgrade to e-commerce systems as part of the Bulgarian government’s “e-government” initiative.

Tackling Telecoms

Bulgaria’s outmoded phone system and lack of sophisticated internet solutions has lead to an increase in American companies providing advanced telephone service solutions, as well as value-added telecommunications. Things like Internet services; wireless and broadband Internet access technologies, as well as cable TV, voice-over-Internet and a host of other technological necessities are much needed in Bulgaria and have spawned international expansion thanks largely to the low initial outlay and operating costs. Some of the country’s investors in this field include names like Microsoft, Siemens and Gate2Shop. There is also still a high level of growth anticipated domestically in this arena particularly with the indigenous telecom companies.

 

The New Outsourcing Hotspot

Remember the rush by many international businesses to set up call centres in India? They proved to be so far removed from the culture and locations of the companies’ North American and European customers that many have had to rethink their outsourcing strategy and as a consequence  are turning towards Eastern Europe for a closer and more culturally compatible relationship with their customers that still brings all of the economic benefits of outsourcing. Bulgaria has come to the fore as one of the most suitable destinations for outsourcing thanks to its glut of skill and proficiency in many languages especially English.

Committed to Bulgaria

SAP, the German enterprise software company set up a small operation in Sofia several years ago and was one of the first IT companies to do so. SAP soon discovered the potential of the skilled workforce and consequently when they decided to develop new, advanced software, they focused all of their Java software development here as opposed to their well-established operation in India.
IBM first established itself in Bulgaria in the 1930's, when it provided the tabulators for the Bulgarian national census. In the 1990’s it increased its presence and has been expanding ever since.
Hewlett Packard has been active in Bulgaria for more than 20 years as have Cisco Systems and Oracle and the number of big names announcing new business set ups in Bulgaria continues to grow.  
The increase in big names has created a whole host of complications for Bulgarian companies who also need skilled technical personnel. International companies pay well over the market rate leading to rising wages and costs for the customer. However as Bulgarian companies compete on the international stage their level of success is growing and they too are able to create more jobs, which in a climate of global recession is a rare thing.