Since we entered the 21st century, there are more and more people willing to experience the adventure of entrepreneurship, especially in the web. Sofia is one of the top 10 cities in Europe to launch your Startup according to Forbes in 2015. Which are its main assets ?
The Facebook wave as we would call it, generated many hopes in the mind of the young generations and the all economy is, step by step, moving to a digital economy.
No need to have a PhD in economics to understand that the landscape of the city centers is changing. In many countries, many traditional shops are closing one after another because of the hard competition of web giants. No need anymore to shop in the streets of the city centers to buy a pair of shoes or a new pair of jeans.
You just need to connect to the site of one online merchant and in a few clicks, buy whatever you want and get it delivered at home two days later.
The world is changing and we believe that the millennial generation, as the experts call the people born after 1994, will be more and more tempted by the adventure of entrepreneurship and launch a startup.
In our opinion, Sofia, Bulgaria, is one of the best places to launch one’s business, especially if we are speaking about a digital product. There are many advantages to launch your business here and I will try to list most of them.
Launching and operating a company is fast and inexpensive to compare with many other European countries
According to the lawyers you will engage it will cost you in average 300 euros to create the company and then, roughly 120 euros per month to operate (social security taxes + accounting services) at the beginning when you will not earn money.
In less than 48 hours your “baby” will be born with as little as 1€ initial capital. Who says better ?
Most of the people, especially in the startup community, speak English fluently
Bulgaria is one of the most multilingual countries in the world, with a highly educated population, sometimes speaking several languages (English, Russian, French, German, and others).
The language will therefore not be a problem for the one wishing to settle and undertake in Bulgaria.
The purchasing power is great to compare with other European cities
This means that you can allow a bigger budget to the development of your product and still enjoy kind of a normal life that you probably could not afford elsewhere.
- You can go skiing or enjoy the beautiful beaches of the Black Sea or Greece and relax after weeks of hard work without killing your budget,
- There are plenty of nice bars and restaurants with very affordable prices (a pint of beer in a fancy bar will cost you less than 2 euros),
- You can go to the cinema and many other entertainment areas for cheap (a movie theater entrance ticket will not cost you more than 4 euros max)
- You can rent a nice apartment without feeling that you will have to eat pasta every day for the last 10 days of the month (a nice 50m² flat in the center of Sofia in a new building will not cost you more than 300 euros per month),
- You can have unlimited mobile phone packages (calls, sms, internet, a lot of roaming minutes and MB within the E.U) for less than 25 euros per month,
- Home high speed internet packages for less than 10 euros per month, Etc.
There are several startup accelerators, incubators, VCs etc. which can help you fund and grow your project
Very active, with direct links to Silicon Valley in CA, and with Startups coming from all over Europe (but this is will be the topic of another article).
It’s a small market (only 7 million people), almost 10 times smaller than the French market for example
This “threat” can quickly transform into an opportunity if you have the right mindset. Once, we were listening to an interview of Jeremie Berrebi, one of the partner of the French billionaire Xavier Niel, who was talking about the advantage of Israel being a small market.
Startup founders there, know that they need to think “international” from the beginning if they want to have a chance of success because their domestic market is inexistent. To us, Bulgaria is about the same.
Unlike France for example, startup founders need to think from day one, how they will grow internationally because their domestic market will not allow them to generate comfortable revenues. In France, they think first about the French market and then, they think how to internationalize.
This is probably why there are not that many French startups which made it on the international scene because when they start to think to grow abroad, it’s already too late. In Bulgaria, founders need to integrate the international growth strategy from the first day if they want to have a chance to make it.
Bulgaria is populated by multilingual talents in many different sectors
If you need to outsource part of your processes or if you need to find partners for specific tasks, Bulgaria is probably one of the place where you can find the right people.
Moreover, if you need to pay them because they are not your co-founders, it’s going to cost you much less than in London, Paris, or Berlin. Many of these people can be found in the numerous and very active co-working spaces. You can check this article about our 5 Top Coworking Space in Sofia.
Last but not least, the corporate and individual income taxes are both a flat 10% rate
Honestly, this is usually what people list first when it comes about attractivity of Bulgaria. To me, concerning the startup scene, this is the last one because at the beginning, you will probably not generate any profit so who cares about the tax rate.
But, I wish you to generate profits quickly and enjoy the low rates of taxes. But, my advice is really no to take this usual argument as the main one because as we wrote, at the beginning, all your revenues, if any, will probably be reinjected in the development of your product and second, laws can change. Today the rate is 10%, tomorrow, it can be a all different story.
For all these reasons, we believe that Bulgaria is a great place to launch one’s idea and see if there is a market for it. Moreover, the startup ecosystem is still small to compare with cities like London, Paris, Barcelone, or Berlin which means that it is possible to quickly meet people and build a network in that area.
Let’s start your Startup in Bulgaria. Good luck !
Cover picture : At Puzl cowOrKing Space in Sofia by Jenny Ivanova
Nice article , Bulgaria (Lion ) wants to play the Lion of the Balkans ( likely like the Celtic Lion some 20-25 years ago with also an ex-centric geographically position in the UE . The Wage in IT sector are pretty good now and tend to be close to some french ones so we ll see if the trend will continue … in my opinion there is sort of IT Buble here .Compared to the mass , IT specialist are more than ever wanted and well paid so if entrepreneurs want to setup his business in BG , he should be sure that he can find such people at decent price too … Also what the employer do not pay via the low tax (corporate tax on payslip), the employee need to fund himself also (extra medical care , pension … ) . Its not mentioned in the article but the fact that there is big players like HP , VMWARE , IBM , SAP … helps also to « educate » people and find amount of IT specialist or even attract foreigners …
Yes, you are 100% right, the IT sector is one of the ones highly looking for talents as there is a shortage of people in that field so wages tend to be very good. I even know people who make nearly 5000 euros per month!
You are also right about additional health care, pensions funds etc. I did not mention it because usually for entrepreneurs, this is not on their top list of requirements. Most of the time, in their home country they are facing similar situations or paying huge amounts to get social coverts.
Yes its true , In France from where I am from , an employee get finally 50% of his Super Brutto ( Employer + employee covers ) cf when you get 3000e on your payslip , you have already given to the system other 3000e by different name of taxe ( it fund good pension system and almost free medecine , etc …. ) , on top of that you need also to pay yearly tax on income for single skilled profile it can represent 10-15% … so it can help to decide talent from West to come here … The taxes are less for everybody, but on counter part you need to cover yourself more .France has one of the most generous pension system (for how long , I dunno … ) but revenue of retiree is above the revenue of an active . Thats why the Entrepreneur need also to care about the extra package c but it can play also a role when an employee has to choose two offer , the additional benefit which is in BG something to consider more than in France. ( medical card coverage , food voucher , Benefit pass , Bonus , additional days off … ).
PS : regarding the OECD figure , Bulgaria is one of the few country where more you get less you pay taxes in term of ratio … so yes this country is perfect place to « make money », but if you want to raise ur kids that another deal .
Another thing the Bulgarian have great appreciation of people coming from West and its something also to consider for an foreigner Entrepeneur how he can feel regarding the local population and Bulgarian will never be snobbish with their language , they are more able to make effort to communicate at least in Sofia , they do not have the syndrome of the « munda lingua » like French …