Pros and Cons of conducting business in Sofia
The lack of transparency and predictability in bureaucratic procedures, is the main obstacle to foreign business investment in the capital city of Bulgaria
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Many foreign investors are interested in doing business in Sofia, but for one reason or another, they turn to more alternative destinations outside of Bulgaria. Others, who yet decide to settle their business in Sofia, are met by a number of obstacles, related to outdated or underdeveloped infrastructure and procedural difficulties.
During a conference held in Sofia this week - BalRec, experts and business leaders tried to give answers to the questions: what are the main obstacles for prospective businessmen in Sofia and how to avoided or overcome them. Among the themes discussed was also, how Sofia can successfully attract more foreign investments.
According to the trends (both foreign and local) on the office property market, the main demand for office spaces comes from the IT industry, outsourcing companies and pharmaceutical businesses. According to a representative from the Forton International office property, the requirements of those companies have risen, which is why the investors have to offer better quality products.
The main demand comes from companies that are already renting spaces, but want to move to a new office. Only 20% are new tenants or hire additional office property. The percentage is so low, because most tenants envision the possibility for a future expansion of their business, so they hire larger area than they need.
Experts yet believe in the potential of the market in Sofia, especially because the city as a capital concentrates most shares of the business in Bulgaria and is an attractive sight for start-ups. Sofia’s biggest advantages are its location in the heart of the peninsular, as well as its natural resources and the historical importance. The city is quite green and the proximity to a mountain makes it an attractive tourist center as well.
However, there’s much to be expected with regards to the infrastructure, transportation and general mobility. A lot of issues in the capital need to be addressed before companies feel completely confident and secure in their investments. Also, especially new investors need some sort of stimuli to choose Sofia, over other equally attractive destinations.
Sofia, can be a center for various industries, if the government together with the business block identify the sectors with most premises to be successful and start stimulating those sectors, which would immediately attract more interest.
Huge advantage of the market here are the low labor costs that have so far attracted companies from the IT sector, software development and call centers. Sofia can also offer quality office spaces that are in no way inferior to those in other European cities.
Other positive factors are the well-organized tax policy, the crucial geographical location and the availability of skilled labor. Some investors have even decided to settle here their headquarters for Europe, the Middle East or Africa.
