Bulgaria's Fading Appeal to Investors: IT Sector Grapples with Challenges

The IT industry in Bulgaria is set to end 2024 without any growth in employment numbers and with decreasing revenue growth, according to Iliya Krastev, chairman of AIBEST. During the annual report presentation, he noted that the country's lack of a functional government and clear economic vision has led neighboring nations to capitalize on this instability. As a result, Bulgaria is increasingly being viewed as an unsafe destination for investors, with foreign businesses and capital flowing to countries like Greece, Romania, and others in the region.

Bulgaria, which had once been a hub for tech companies, startups, and venture capital funds, is seeing its competitiveness waning. Krastev highlighted a marked decline in foreign investment, with the surrounding countries becoming more proactive in attracting business, often using Bulgaria's instability and unpredictability in their marketing to potential investors. They emphasize concerns over the country's regulatory and tax policies, as well as the deterioration of its education system.

Yordan Ginev, Managing Director for Bulgaria at Digitall, added that businesses in the IT sector typically finalize their budgets by October and are often caught off guard by late changes in taxes and regulations. He pointed out that such practices are particularly harmful in a country like Bulgaria, where policies seem to shift unpredictably. Krastev argued that the government's failure to address these challenges stems from the IT sector's lack of political visibility, making it less of an electoral concern despite its strategic importance.

In light of these issues, the industry is making a renewed push to gain recognition through its organization, AIBEST, to be included in national decision-making bodies like...