In today’s fast-changing world of business, finding the right place to set up shared service centres (SSCs) is critical. Bulgaria has become a prime choice, drawing the interest of savvy global companies seeking cost-effective solutions and a highly skilled workforce for their back-office needs. This article explores Bulgaria’s growing importance in the SSC landscape, highlighting the key reasons behind its popularity as a preferred destination.

The Rise of Shared Service Centers: A Numbers Game

Shared services involve centralising specific operational functions like finance, human resources, and information technology, providing them as shared resources within an organisation. This model streamlines operations, cuts costs, and boosts efficiency by consolidating repetitive tasks into specialised service centers. SSCs have gained global prominence as organisations aim to optimise operations and reduce expenses. Bulgaria is a prime example, experiencing substantial growth in SSC establishments. While not in the top 10 preferred SSC locations, Bulgaria’s appeal has been steadily rising in international rankings, now alongside India, Poland, and Mexico as an emerging choice for international corporations.

What makes Bulgaria an attractive choice for SSCs:

• Cost Efficiency: Bulgaria offers a cost-effective environment, with labor costs typically 30-40% lower than in Western European countries. This cost advantage has resulted in significant annual savings for companies with SSCs in Bulgaria.
• Skilled Workforce: The country boasts a highly educated and multilingual workforce, with over 70% of Bulgarians speaking English and other foreign languages. 
• Stable Business Environment: Bulgaria boasts a remarkable combination of political and economic stability, further reinforced by its European Union membership since 2007. This enduring stability has played a pivotal role in consistently attracting substantial Foreign Direct Investment (FDI) inflows into the country’s shared service center (SSC) sector.
• Favorable Time Zone: Bulgaria’s UTC+2 time zone enables efficient communication with European and North American clients, while its proximity to major European cities simplifies business trips, making it an attractive outsourcing destination.

Which sectors have been particularly attracted to setting up SSCs in Bulgaria? 

• IT and Technology: Bulgaria’s SSCs play a crucial role in the country’s IT and technology sector. This sector constitutes a substantial portion of the SSC landscape, employing a significant workforce. Importantly, it has exhibited consistent year-on-year growth since 2015, establishing itself as a highly competitive field within the country.
• Finance and Accounting: Bulgaria’s Financial SSC sector plays a vital role in supporting global banking and financial activities, significantly contributing to the nation’s GDP. It employs a substantial workforce in various financial and accounting roles. While specific statistics are unavailable, it is evident that this sector’s impact is significant.
• Customer Service and Human Resources: The customer service and HR sectors have witnessed significant growth and expansion in recent years, with both sectors playing a vital role in organisational success. In 2023, they will continue to be crucial components of modern workplaces.

Investment Opportunities and Regulatory Environment: A Winning Combination

Investors looking to establish SSCs in Bulgaria can explore various opportunities, from building in-house centers to partnering with established local service providers. The success of SSCs in Bulgaria hinges on a skilled and adaptable workforce. Both investors and the Bulgarian government have been actively involved in workforce development initiatives, including language training, upskilling, and reskilling programs.

Navigating the regulatory landscape is essential for investors. Bulgaria’s business-friendly regulations, including tax incentives and labor laws, have supported SSC operations. As of 2022, the Bulgarian government offers a 10% corporate tax rate for SSCs, resulting in substantial tax savings for companies operating in the country. These favorable conditions, combined with Bulgaria’s strategic location and skilled workforce, position the country as a hotspot for SSC investments in the years ahead.

Future Outlook: Anticipated Growth

As we look ahead to the future of SSCs in Bulgaria, we can discern several promising trends on the horizon. The widespread adoption of automation and artificial intelligence is set to bring about a transformative shift within the sector, leading to increased operational efficiency. This bodes well for not only bolstering productivity but also for ensuring the enduring growth and competitiveness of Bulgaria’s SSC industry.

Additionally, SSCs play a pivotal role in shaping the socioeconomic landscape, particularly through job creation. These centers have established a substantial workforce, making a significant contribution to the nation’s employment sector. Furthermore, the geographical reach of SSCs extends beyond the capital, Sofia, with many strategically positioned in various cities across the country, actively fostering regional development.

In summary, Bulgaria’s shared service center sector offers an enticing prospect for investors and businesses seeking growth and efficiency. With its cost-effective advantages, highly skilled workforce, and accommodating regulations, Bulgaria stands as a prime destination in the global outsourcing landscape. To explore these promising opportunities, get in touch with TGS Bulgaria. Our seasoned professionals are ready to provide the expertise and support you need to establish a successful presence in this thriving sector. Your path to success begins here. Contact us today.