In 2017 I was asked to create a nearshore development team for one of the world’s leading news organisations, headquartered in London (UK). We explored other locations, including Cluj-Napoca, Porto, Kraków, and Poznan, but in the end chose Sofia, the capital city of Bulgaria. At the time it was a great choice and I grew a fantastic team there. But time has marched on and lately, when talking to people about nearshoring destinations, I hear comments like, "Isn’t Sofia too expensive? Isn’t it saturated?" So I thought I’d have another look.
Sofia in 2017: The Hidden Gem
Back in 2017, Sofia was one of the best-kept secrets in nearshoring. Low costs, a strong tech talent pool, and minimal competition made it an ideal destination for companies looking to set up shop. And for the news organisation, with a diversity target of 50% women, the high number of women engineers coming out of the universities was a real plus. Recruitment was easy and the talent pool excellent. I loved the initiative the Bulgarian engineers showed, and their no nonsense attitude. Things went well, and within two years I was managing director of a 160-person operation.
Of course the numbers had to add up. At the time, Bulgaria’s flat 10% corporate tax rate made it an easy sell to the finance team back in London. Labour costs were 30-50% lower than Western Europe, and despite some bureaucratic headaches, setting up a business was relatively straightforward. Particularly as we used a Build-Operate-Transfer (BOT) model and had an excellent partner to work with.
English proficiency was another plus. Unlike some nearshoring destinations where language barriers slow things down, Sofia’s developers were comfortable working in English, which made integration with London-based teams seamless. All our recruitment was in English and English was the official language of the company.
Sofia in 2025: The Crowded Playground
Fast forward to 2025, and the picture has changed. Sofia is still one of the cheapest EU nearshoring destinations, but salaries have risen significantly as demand has increased. Of course tech salaries have risen across the globe so the relative increase between London and Sofia was lower; you can still hire experience staff in Sofia for much less than London. And the same corporate tax rate applies.
Those financial incentives mean many Western firms now operating in Bulgaria. If you drive into town from the airport you pass billboard and billboards adverting big tech names, all with offices in Sofia. So, not surprisingly, competition for tech talent is much fiercer.
Competition means recruitment takes longer and costs more. Back in 2017, hiring was fast, but now, skilled developers have multiple offers at any given time. Turnover rates are also creeping up, and some companies are struggling to retain staff.
The hiring crunch in Sofia means some businesses are now looking at secondary centres in Bulgaria, with Plovdiv, Varna, Burgas, and Stara Zagora being top of the list. But don’t expect cheaper staff in these alternative locations. You might get a regional discount, but when I looked into opening in Varna, engineers earned the same as those in Sofia. Also check whether your intended centre has direct flights from your HQ (there are not flights from London to Stara Zagora, for example). You don’t want to be trapped into 12 hours of travel to get to your nearshoring hub.
Should You Still Nearshore to Sofia?
Yes, Sofia remains a strong candidate for western European companies looking at nearshoring today. But it really depends on your organisational goals and timeframe. If your priority is cost efficiency, Sofia still beats most EU locations. If you need a large, established tech talent pool, it delivers. If you want gender diversity in your technical team, then Sofia still scores highly. However, if you want to build a team quickly with minimal hiring headaches, you may need to adjust expectations or consider emerging locations because the Sofia talent market is definitely more competitive than it was.
You know how referees for a job application are always asked if they would hire the candidate again? Well, I would definitely hire Sofia again and put a nearshore operation there.
Sources
Here are the sources used. They cover Bulgaria’s ICT sector, including market size, growth trends, and economic impact.
Alcor BPO. (2023, September). Nearshore software development to Bulgaria in 2024. Retrieved from https://alcor-bpo.com/nearshore-software-development-bulgaria/
Capital. (2024, August 29). IT sector in Bulgaria grows 10% despite global slowdown. Retrieved from https://kinsights.capital.bg/business/2024/08/29/4668228_it_sector_in_bulgaria_grows_10_despite_global_slowdown/
Economic.bg. (2024, January). What was 2024 like for the Bulgarian ICT sector?. Retrieved from https://www.economic.bg/en/a/view/another-good-year-but-not-for-everyone-what-was-2024-like-for-the-bulgarian-ict-sector
International Trade Administration. (2023, August). Bulgaria – Digital Economy. Retrieved from https://www.trade.gov/country-commercial-guides/bulgaria-digital-economy
NationMaster. (2019). Top countries for ICT Industry Share in GDP. Retrieved from https://www.nationmaster.com/nmx/ranking/ict-industry-share-in-gdp
Sirma Group. (2023). Bulgarian ICT Landscape Highlights Digitalk 101 Ranking. Retrieved from https://sirma.com/news/bulgarian-ict-landscape-highlights-digitalk-101-ranking.html
U.S. Department of Commerce. (2023, August). Bulgaria – Digital Economy. Retrieved from https://www.trade.gov/country-commercial-guides/bulgaria-digital-economy
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