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 The Central and Eastern Europe (CEE) region has become one of the most attractive regions for foreign investment and outsourcing in recent years. According to the Financial Times, economic growth in the region for 2017 is 2.5% and is expected to rise to 2.6% in 2018(1). In light of Brexit, many UK companies turn to outsourcing as a way to employ additional skills which is expected to further drive economic growth and develop the outsourcing industry in the CEE region.
Bulgaria has emerged as one of the biggest business process outsourcing (BPO) and direct foreign investment destinations with the BPO Index 2016 ranking it 7th among the most attractive BPO pioneering locations(2). Among the major countries outsourcing to Bulgaria are the UK, the USA, and Germany.
The country is one of the largest markets in the CEE region and its economic growth ranks among the highest in the EU(3). Its taxes are among the lowest in the EU - the country has 10% flat tax, including both corporate tax and income tax. In terms of connectivity, Bulgaria is 1st in the EU for maximum speed of Internet connectivity. Another advantage that makes Bulgaria a popular outsourcing destination is the large pool of highly-qualified and motivated young people, especially in the sphere of IT and engineering. Almost half of the population is bilingual with 45% of Bulgarians speaking one foreign language and 85% studying English.
According to the Bulgarian Outsourcing Association’s report, the outsourcing business in Bulgaria will generate a EUR 2.5 billion turnover and reach 4.3% of GDP by 2020(4). Around 47,800 people were employed in the outsourcing industry in 2016 and the number is expected to grow to 62,500 by 2020(5). There are around 24,000 companies in the outsourcing sector in Bulgaria 20% of which are based in Sofia. In 2016, the added value of the sector in Sofia reached BGN 2.2 billion and in 2017 the outsourcing sector represented 10% of the added value in the capital. The export of outsourcing services tripled between 2011 and 2016 and reached BGN 1.4 billion of Sofia’s total export.
With a rapidly developing outsourcing industry and strong indicators for the future, Bulgaria is likely to remain one of the most attractive countries for business outsourcing activities.
Sources Referred:
(1) “Why, post-Brexit, optimism for the CEE region is growing with Bulgaria now emerging as one of the top BPO destinations” http://www.intelligentsourcing.net/why-post-brexit-optimism-for-the-cee-region-is-growing-with-bulgaria-now-emerging-as-one-of-the-top-bpo-destinations/
(2) “Outsourcing industry in Bulgaria experiencing double-digit growth” https://innotec-marketing.com/newsroom/outsourcing-industry-in-bulgaria-experiencing-double-digit-growth/
(3) Outsourcing Industry Report 2017 http://investsofia.com/wp-content/uploads/2017/12/Sofia_Outsourcing_Industry_Report_December-2017_ENG.pdf
(4) Outsourcing Industry Report 2017 http://investsofia.com/wp-content/uploads/2017/12/Sofia_Outsourcing_Industry_Report_December-2017_ENG.pdf
(5) “The New Face of the Outsourcing Industry in Sofia and Bulgaria – Joint Press Conference by Sofia Investment Agency and the Bulgarian Outsourcing Association” http://investsofia.com/en/the-new-face-of-the-outsourcing-industry-in-sofia-and-bulgaria-joint-press-conference-by-sofia-investment-agency-and-the-bulgarian-outsourcing-association/
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