Bulgaria continues to be one of the most competitive investment destinations in the European Union, thanks to its strategic location and low operational costs. The minimum wage (MW) in the country remains the lowest in the EU – 551 euros as of January 2025. This creates an attractive environment for investors seeking cost-effective solutions related to labor costs. However, the dynamic wage growth raises questions about the sustainability of this attractiveness in the future.

Competitiveness in Labor Costs and the Challenges of Wage Growth

Although Bulgaria retains the lowest minimum wage in the EU, the country has seen significant income growth. According to data from Eurostat, between 2015 and 2025, the MW increased by 199% – from 184 euros in 2015 to 551 euros in 2025. This growth reflects an improvement in the purchasing power of the workforce, but at the same time, it may lead to higher operational costs for companies that rely on relatively low labor costs as a primary factor for competitiveness.

This raises the question of whether the sustainable wage growth will continue to maintain Bulgaria’s economic attractiveness for investors in the long term, or whether it will begin to reduce its competitiveness compared to other countries with lower labor costs.

Rising Productivity and a Stable Economy

The growth of incomes in Bulgaria is also linked to the increased skill level of the workforce and stable economic development. In combination with a flat tax rate of 10% on both corporate and income tax, the country remains attractive to foreign investors in sectors such as outsourcing, information technology, and manufacturing. However, businesses need to be mindful of how increasing labor costs may impact their competitiveness.

Comparison with Other Countries in the Region and Business Prospects

Although Bulgaria’s minimum wage remains the lowest in the EU, the country offers relatively high competitiveness compared to other countries in the region. For example, the minimum wage in Poland is almost twice as high as Bulgaria’s, and in Slovakia, it is 50% higher. This makes Bulgaria attractive for establishing manufacturing plants and business services. However, the dynamic wage growth may raise questions about whether the country will be able to maintain these competitive advantages.

Conclusions for the Future of Investments in Bulgaria

Trends indicate that countries in Eastern and Southeastern Europe, including Bulgaria, are experiencing the fastest wage growth while still offering an attractive investment environment. This reduces the gap with Western European countries while maintaining competitive labor costs.

However, rising wages create new challenges for businesses, which must adapt to changing conditions. For Bulgaria, it will be crucial to find a balance between the increasing workforce incomes and maintaining its competitiveness for investors.

More information and up-to-date data on the minimum wage in the EU can be found on the Eurostat website.

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