- Christina Tanosova
- 31.10.24
- 4 min
- For SME, EIC Accelerator, EU funding programmes,
Your contact person
Monika Dimitrova
In today's globalised world, companies are constantly looking for ways to reduce their operating costs and increase efficiency at the same time. One popular strategy is to outsource business processes to other countries. Nearshoring is becoming increasingly important as it facilitates collaboration and communication without time zone-related delays. Bulgaria in particular has become a leading nearshoring destination in Europe in recent years. But what exactly makes this business location so attractive for German companies?
What is nearshoring? |
Bulgaria offers numerous advantages for companies wishing to set up or invest abroad.
1. Cost benefits
Despite the easing energy price crisis, electricity prices in Germany are still relatively high at 26.2 cents per kilowatt hour (as of June 2024). In comparison, people in Bulgaria currently pay over half less at 11.4 cents per kilowatt hour. This considerable cost difference is particularly noticeable in the manufacturing industry, where energy plays a central role. In addition, the low local labour costs offer further significant cost advantages. These favourable framework conditions enable companies to significantly reduce their production costs and increase their competitiveness.
2. Tax benefits
Bulgaria offers companies attractive tax benefits. With a corporate tax rate of only 10%, Bulgaria is one of the countries with the lowest tax rates in the European Union. This competitiveness is supported by additional tax incentives, including tax exemptions for certain investments and a simple, transparent tax system. These favourable framework conditions contribute significantly to cost savings and the promotion of entrepreneurial development in Bulgaria.
3. Security and stability
As a member of the EU and NATO, Bulgaria benefits from numerous advantages that strengthen both security and extensive economic and political stability. A location in Bulgaria offers companies potential access to EU funding that support investments in infrastructure, innovation and regional development. In addition, the Schengen Agreement reduces the barriers to co-operation through the free movement of people and goods, which increases the efficiency and flexibility of business processes.
4. Attractiveness for various sectors
Bulgaria offers attractive investment opportunities for German companies, particularly in the manufacturing and technology sectors. The country's strongly export-orientated electronics industry, which supplies a third of its exports to Germany, underlines this impressively. With the world's largest Liebherr plant and a high degree of automation, Bulgaria is an ideal location for companies in the electronics and manufacturing industries.
In 2022, the Bulgarian manufacturing industry recorded the largest increase in industrial production in the EU, indicating dynamic economic growth. Conditions are particularly favourable for the food industry, plastics and metal processing and vehicle manufacturing.
The robotics and mechatronics sectors also benefit from strategic investments and 17 research centres in the field of mechatronics and clean technologies. The life sciences sector, which accounts for 7.5% of GDP and includes 128 medical centres in Sofia, also offers great potential. This is further supported by the participation in the European initiative "1+ Million Genomes".
5. Growth opportunities in the market
The growth opportunities in the Bulgarian market are promising and offer attractive prospects for investors and companies. Thanks to its strategic location in south-east Europe, Bulgaria serves as a bridge between Europe and Asia, which facilitates access to new markets. In addition, the Bulgarian economy is on an upward trend, supported by stable macroeconomic development and continuous infrastructure improvements.
The necessary qualified employees are also available. Every year, almost 60,000 graduates complete their university studies in Bulgaria, which ensures the availability of a well-trained labour force in various sectors. Most Bulgarians learn English during their school years and German is also a popular foreign language, which facilitates effective communication.
Bulgaria is strategically located in south-eastern Europe.
6. Cultural and geographical proximity
Bulgaria's cultural and geographical proximity to many European countries offers considerable advantages for nearshoring. Geographically, Bulgaria is strategically located in south-eastern Europe, with short distances to important European markets and well-developed transport routes that enable fast and cost-efficient logistics solutions. Important cities for industrial settlement in Bulgaria are the capital Sofia, the industrial centre Plovdiv and the port city of Varna on the Black Sea (see photo). Culturally, Bulgaria shares many values and business practices with Western European countries, which facilitates co-operation and integration. Bulgarian culture is characterised by a rich history, traditional hospitality and a strong sense of community, which creates an open and trusting business environment. These cultural characteristics encourage the formation of long-term partnerships and improve the efficiency of co-operation.
In addition to other advantages that the country has to offer, all of these factors make Bulgaria an extremely attractive business location for international companies and investors. The favourable cost conditions, the stable economic development and the advantageous tax framework offer ideal conditions for entrepreneurial success. In addition, the geographical proximity to important markets and cultural ties facilitate integration and co-operation, making Bulgaria an ideal choice for nearshoring and business expansion.
Opening up a new market requires detailed and comprehensive preparations. Such endeavours can often fail due to a lack of contacts and communication barriers. We facilitate your entry into the Bulgarian market by providing you with experienced consultants at our office in Sofia. Regardless of whether you want to set up a company abroad or invest elsewhere: With local expertise and a strong network, we support you in successfully realising your business goals and benefiting from the many opportunities and advantages of Bulgaria as an attractive business location.
This is how we can contribute to your success:
Identification and selection of a suitable locationInterested? Please contact us if you require further information or have specific enquiries!
Text: Pia Schmid
Your contact person
Monika Dimitrova
EurA AG
T- 079619256-0Max-Eyth-Straße 2
73479 Ellwangen
info@eura-ag.com