Bulgaria as a tech hub: what UK CTOs should know in 2026?

Our engineering team works from Sofia, while most of our clients are in the UK, where we also have our commercial HQ. So when a CTO asks us, “Why Bulgaria?”, the question is never theoretical for us. We answer from eight years of building engineering teams here. 

The short answer we give is usually: “Bulgaria has quietly built one of the most export-focused software industries in Europe”. The longer answer is about how to build a team there that works as part of your own and stays with your product for years. We cover both here. 

Is Bulgaria a tech hub?

100% yes, and the data backs it up. We should note, though, that "hub" means something specific. Bulgaria isn't a Silicon Valley-style startup machine. Its strength is more about engineering capacity that serves international companies, built over more than two decades.

Let’s back up the statements with some numbers behind the sector

The first report that needs to be mentioned here is the annual survey by the Bulgarian Association of Software Companies: “BASSCOM Barometer 2025”, which reported:

• 11.5% revenue growth for the software industry in 2024, with a further 9% forecast for 2025.
• 87% of revenue coming from exports.
• Around 6,100 companies in the sector, 300 of them founded in 2024.
• More than 60,000 people employed, with 65,000 jobs projected by 2027.

In our context, the second bullet is the one worth pausing on. Almost nine in every ten euros the industry earns come from clients abroad. Many Bulgarian Engineers are working for international teams, building their careers on international projects. In practice, joining a product team in another country, working in English every day and following processes designed somewhere else is something normal for them, not an exception.

For a UK tech company, all of this can be only a plus and an experience that can save time. Why? A new Engineer doesn’t need to be taught how to work with a remote client; they have this culture already. For example, they know how to raise a blocker early, ask questions about a requirement before building it, and keep stakeholders updated without being chased. That’s often the difference between an Engineer who needs months to settle in and one who contributes in the first few weeks.

Software is only part of the picture. Once you add roles in IT infrastructure, telecoms, data and support, Bulgaria’s tech workforce is roughly twice the size of the software workforce. The US International Trade Administration's Bulgaria country guide, citing Eurostat, puts it at 126,100 ICT specialists in 2023, spread across roughly 10,000 ICT companies.

Companies that have already bet on Sofia

Statistics only go so far. What convinces most tech leaders is seeing who else is already there.

• SAP has run SAP Labs Bulgaria since 2000. It sits among the country's largest IT employers alongside DXC Technology, HPE, DraftKings and VMware, according to Economic.bg's employer ranking.
• HPE's Sofia site is now its second-largest hub worldwide, with more than 1,600 people. It started as a global delivery centre and today works with HPE's R&D labs on remote engineering, project management and business analytics. HP Inc., the separate PC and printing company, also runs its Bulgarian operations from Sofia, in the same business park as our own engineering HQ.
• Telerik, a developer tools company with its world headquarters in Sofia, was acquired by Progress Software for $262.5 million in 2014. It's still one of the stories local Engineers point to.
• The payments company, Paysafe, describes Sofia as a multifunctional hub covering product and technology, operations, finance, risk and information security. Among its reasons for building there, it lists a time zone that works well with both Europe and the UK.
• The Bulgarian company behind the V-Ray rendering software, Chaos, founded in 1997. V-Ray has been used on more than 150 feature films, and co-founder Vlado Koylazov received a Scientific and Engineering Academy Award for it in 2017.
• Payhawk became Bulgaria's first unicorn in March 2022, after a $100 million round led by Lightspeed. It runs offices in both London and Sofia.
• The EBRD opened its Tech Sofia hub in June 2026. Fifty-one IT professionals had joined at launch, with plans to grow past 100.

The EBRD example is the most recent one. However, one thing is clear for all of these companies. They didn't come to Bulgaria for just a call centre or a short-term project; they chose Sofia for engineering, product and technology work they plan to keep for years.

Why do tech companies choose Bulgaria for software development?

Lower costs are usually what puts Bulgaria on a CTO’s radar. However, they’re rarely the reason a UK company stays for years. From what we see with our own clients, four practical factors matter more.

1. EU membership, and now the euro

Bulgaria has been an EU member since 2007. Contracts, IP protection and data handling run under EU rules, which UK legal teams already know well.

Since 1 January 2026, Bulgaria is also part of the euro area. The European Central Bank confirms the switch at a fixed rate of BGN 1.95583 to €1. In practice, the lev had been pegged to the euro for years. Still, joining the eurozone removes one more question from a finance director's checklist, especially for companies already invoicing in euros elsewhere in Europe.

2. Two hours ahead of London

Sofia uses Eastern European Time - two hours ahead of the UK throughout the year. When a Bulgarian Engineer starts work at 9:00 AM, they are already online, while it is 7:00 AM in London. The two teams share the majority of the workday. Daily stand-ups take place in real time. Code reviews are not deferred until the following day.

This small difference changes the way a team works on a day-to-day basis. When there is a time difference of five hours or more between two offices, a question asked in the afternoon is often not answered until the following morning. With a two-hour difference, the answer arrives the very same day, usually within minutes.

3. English that holds up in technical conversations

Bulgaria ranked 18th globally in the 2025 EF English Proficiency Index, with a score of 594 against a global average of 488. Sofia scored higher still, at 616. This aligns with what we see on a daily basis. Here, Engineers conduct sprint planning, prepare documentation, and critically analyse requirements, all in English.

4. A pipeline of Engineers from universities and academies

Sofia University's Faculty of Mathematics and Informatics and the Technical University of Sofia have produced Engineers for decades. Alongside universities, private academies such as Telerik Academy and SoftUni run structured programming courses for people who want to qualify as software developers. For many Bulgarian Engineers, these courses were their first step into the industry.

The result is a mix: deep computer science fundamentals at the senior end and a steady flow of motivated new Engineers at the junior end.

How much does it cost to hire developers in Bulgaria?

Here's where we want to be precise, because a lot of content on this topic isn't.

Eurostat's 2025 labour cost data shows Bulgaria with the lowest average hourly labour cost in the EU, at €12.0, against an EU average of €34.9. 

For UK companies, that difference is significant. It gives them access to senior engineers at a lower cost than London, without compromising on experience, English or shared working hours. As in any tech hub, experienced engineers in Sofia earn more than the national average, but the gap with the UK remains wide.

The savings work best when quality comes with them. Problems tend to start when price becomes the only thing being compared. A quote far below the rest of the market usually hides a trade-off somewhere, such as less experienced Engineers, high turnover or a “dedicated” Engineer who is quietly split across several clients. We wrote about one version of that in exposing the bench in IT outsourcing.

Therefore, rather than comparing daily rates, it is more useful to assess the long-term contribution each Engineer brings to your team. An experienced software developer who is proficient in English, shares the majority of your working day, operates under EU law, and remains committed to your product for years will create far more value than a cheaper specialist who leaves after six months. Over a three- to four-year horizon, this is the comparison that truly matters.

Bulgaria vs Romania and Poland: where should you build an engineering team?

When tech leaders from the UK look at Bulgaria, they typically compare it to Romania and Poland, the other two countries in the region with well-developed software industries. Poland boasts the largest pool of engineering talent among the three. Romania is closer to Bulgaria in terms of both scale and costs: according to Eurostat data, in 2025, average hourly labour costs stood at €13.6 in Romania and €12.0 in Bulgaria, compared to €15.2 in neighbouring Hungary.

The key differentiator for Bulgaria lies in the way its software industry has evolved. With 87% of the sector's revenue generated by foreign clients, working with international teams has become the standard operating model for Bulgarian tech companies, rather than merely an auxiliary activity. Furthermore, a large portion of the industry is concentrated in Sofia, which facilitates the assembly of teams whose members can meet in person, work from the same office, and, over time, develop a shared culture. Moreover, as of January 2026, Bulgaria uses the euro, whereas Romania and Poland still retain their own national currencies; this simplifies contracting and budgeting for companies that already operate using the euro. 

For most UK companies, the real question is not which country has the highest number of Engineers "on paper." What matters is where they can build a team of experienced professionals who can integrate into their existing structures, understand the product, and remain committed to it for years to come. This is precisely where Bulgaria offers a significant advantage, thanks to a combination of highly qualified talent, international experience, and aligned time zones.

What does it take to build a strong tech team in Bulgaria?

The technology market in Bulgaria is mature, and Engineers here are accustomed to working with some of the world’s most prominent companies. This is great news for CTOs looking to build their teams here, as it ensures a high standard of work. At the same time, it means there are several things that need to be handled correctly right from the start.

1. Move quickly on senior hires. Experienced Engineers are in high demand, and the best ones rarely stay on the market for long. A focused hiring process, run by people who already know the local talent pool, makes it much easier to secure them.
2. Give Engineers a reason to stay. With companies like SAP, HPE and Bosch in Sofia, Engineers here know what a good workplace looks like. Meaningful work, room to grow and being treated as a real part of the team are what keep people with a product for years.
3. Choose the right setup. Opening your own Bulgarian entity means taking on local employment law, payroll, office space and recruitment. Large organisations with time to build can make that work. For a scale-up that needs a team this quarter, a partner already established in Sofia is usually the faster route.

That last choice is where most of the "outsource vs build" debate actually happens. We covered the common misconceptions in 7 outsourcing myths costing UK tech leaders talent and time.

How can UK companies hire Bulgarian software developers?

Many of the CTOs we work with start looking abroad after struggling to fill senior roles in the UK, sometimes for months, because of the UK digital skills shortage. When they decide to build an engineering team in Bulgaria, they usually choose between four options:

1. Set up your own entity. Full control, highest setup cost and the slowest start.
2. Employer of Record (EOR). Fast for one or two hires. You still handle sourcing, interviewing and retention yourself.
3. Traditional outsourcing. A vendor delivers a scope of work. You get output, but limited visibility into who's doing it and little say in how.
4. Co-sourcing. Engineers work as an integrated part of your team, under your processes and priorities, while the partner handles hiring, employment and retention locally.

We built TechPods around the fourth option. Our co-sourcing model puts Engineers from our Sofia engineering HQ directly inside our clients' teams. They join your stand-ups, use your tools and work on your roadmap. For a defined project, such as an AI integration, a Mission Pod gives you a specialised team with a clear goal.

We also opened our commercial HQ in Bath this year to be closer to our UK clients. Being in the same market helps us understand their needs better, meet them in person and keep communication simple, while their engineering teams work from our Sofia office.

Whichever route you take, the partner matters more than the country. Our checklist for evaluating co-sourcing vendors covers what to ask before you sign anything.

Is Bulgaria the right place for your next engineering team?

Bulgaria is the most suitable choice for companies looking to build a long-term team. If you need experienced Engineers whose working hours align with those in London, who operate according to EU regulations, and who stay long enough to truly understand your product, then the country deserves a place on your list of potential destinations.

A few questions can help you decide which setup suits you best:

• Do you need a dedicated, long-term team or support for a specific project? Both work. The value of a dedicated team grows over time as the Engineers become familiar with your codebase and your customers; meanwhile, a project-based team can get up and running quickly with a clearly defined objective.
• How closely will the Engineers collaborate with your in-house team? If they’ll be pairing, reviewing code and solving problems together throughout the day, the two-hour time difference between London and Sofia will not hinder effective collaboration.
• Who will source and provide support for the right Engineers? Whether you need specialists for a few months or for years to come, a partner actively recruiting in Sofia can secure the necessary talent faster and ensure the team remains focused on your objectives.
• Are you comparing daily rates or total value? While Bulgaria offers competitive pricing, the true value lies in Engineers who quickly get up to speed and deliver results, regardless of the engagement's duration.

It's also where our story started. We were founded in Sofia in 2018, and today 85% of our clients have been with us for more than four years. You can read more about why we built TechPods in Bulgaria, or talk to us about what a Sofia-based team could look like for you.