SOFIA, Bulgaria — The building site stands five miles south of central Sofia, but the facades of the new structures would fit in easily among the low-rises of SoHo, Chinatown, and Little Italy. Two cars sporting the New York City Police Department logo are parked on the street, and copies of several New York publications clutter the windows of a street-corner newsstand.

“We’re creating a new New York,” David Varod proclaims as he watches the 200-person construction crew at work.

Mr. Varod is chairman of Nu Boyana Film Studios, which is erecting a gigantic set designed to mimic the architectural style and layout of Lower Manhattan’s neighborhoods. When Nu Boyana’s “new New York” is ready for lights, camera, and action in April, moviemakers whose scripts are set in New York City will be able to shoot their films in this Balkan nation for a fraction of the cost.

Producers routinely pay a minimum of $1 million a day to shoot on location in Manhattan. Shooting at Nu Boyana’s back lot will require just a fifth of that, according to Mr. Varod. His goal is to shoot 10 American feature films at Nu Boyana’s New York set next year.

New York is not too worried about the competition — yet.

“It’s impossible to truly fake New York City,” the commissioner of the Mayor’s Office of Film, Theater and Broadcasting, Katherine Oliver, said.

New York City goes to great lengths to accommodate filmmakers, Ms. Oliver said, including providing free permits, locations, and police assistance. Three years ago, the city and state instituted a “Made in NY” initiative that offers a 15% tax credit to productions that complete at least three-quarters of their stage work within the city limits.

Even with tax credits and discounts, location shooting in New York will be far more expensive than at the Bulgarian back lot. But the five-borough film industry has grown rapidly since the launch of the Made in NY program in the fall of 2004, and city officials are confident about the strength of the sector. The mayor’s film office counted a record 34,718 location shooting days last year, up 49% from 2004. The city’s film and television industry now generates 100,000 jobs, according to the office. By contrast, the Boyana studio employs just 700.

This is not the first time that New York City has faced competition from other locales. The famous New York Street on the Warner Brothers site in Burbank, Calif., dates back to the 1930s, and both Paramount Studios in Hollywood and Universal Studios in Los Angeles maintain back lots with New York aspirations.

Even if it is not the first site of a “new New York,” Bulgaria may be the unlikeliest location for such a project so far. The Boyana studio was built in the early 1960s, when a pro-Soviet tyrant, Todor Zhivkov, ruled Bulgaria. His regime fell in 1989, but it would take more than a decade and a half for the studio to shake off its post-communist malaise.

The Los Angeles-based film production and distribution firm Nu Image bid $9.2 million for control of the studio in 2005 and hired Mr. Varod to head its operations in Bulgaria.

“Nothing was functioning when I came here,” Mr. Varod, 60, an Israeli veteran of the Six-Day War who worked for decades as a set designer before taking over at Boyana, said. Nu Image has already started shooting several major motion pictures at its Bulgaria site, and Boyana is abuzz with Hollywood stars.

Morgan Freeman and Antonio Banderas are at work on “The Code,” a drama about a pair of art thieves. “The Black Dahlia,” last year’s blockbuster murder mystery starring Josh Hartnett, Scarlett Johansson, and Hilary Swank, also filmed at the studio. Other actors who have made movies at Boyana recently include John Cusack, Ben Kingsley, and Marisa Tomei.

“This puts Bulgaria on the map,” Mr. Varod said.

The studio’s 75-acre property also hosts a faux ancient Rome replete with a replica Coliseum. (Eric Roberts, brother of actress Julia, is in Sofia playing the role of Emperor Tiberius in a made-for-TV movie called “Cyclops.”) Just yards away stands a set simulating modern-day Baghdad.

The New York back lot is the studio’s most ambitious project to date. Ultimately, Mr. Varod said he wants to devote 16 acres to his make-believe Manhattan.

Nu Boyana hired the architect and production designer Arv Greywal to plan the back lot. Mr. Greywal hails from Toronto, a city whose film industry started competing with New York long before Bulgaria emerged on the big-screen scene.

Toronto offered filmmakers the same thing that Bulgaria hopes to provide: a cheaper place to shoot scripts set in New York City. Bulgaria brings the temptation of filmmakers to flee from high-priced New York to a whole new level. The monthly minimum wage here is 180 lev ($136), the lowest in the European Union and nearly 20% below that of the E.U.’s other newest member, Romania. A report released by the European Commission in July rated Bulgaria the least expensive country in the 27-member group.

Nu Boyana is training Sofia residents to do much of the work required for moviemaking. The studio’s computer-generated imagery department already has a staff of 250. An employee who receives about $500 a week might command a $2,000-a-week salary in New York, Mr. Varod said.

Meanwhile, Bulgaria’s entry into the E.U. this past January makes it easier for Western businesses to set up shop here and take advantage of the comparatively low price levels.

Still, the bargain-basement prices for production in Bulgaria “should not worry anyone yet,” Mr. Greywal says. The Sofia studio is saddled with several shortcomings. For one, the buildings on the back lot will be just 50 to 60 feet tall, so filmmakers will have to use CGI to simulate skyscrapers.

Moreover, Nu Boyana’s “new New York” will not include many of the city’s landmarks. “If you replicate something recognizable, you’re stuck with it,” Mr. Greywal says. Instead, set designers have planned for buildings that are archetypal — not iconic. Will moviegoers be able to distinguish Sofia’s SoHo from the real thing? If the studio set is high-quality, the “average viewer sees no difference,” according to Professor Boris Frumin, who teaches film at New York University’s Tisch School of the Arts.

Sophisticated cinephiles might be more difficult to deceive. “The light in Sofia is different than New York City light,” Professor Kenneth Dancyger, who also teaches at Tisch, said. “Sofia could work in a coarse sense as a stand-in,” according to Mr. Dancyger, “but none of the memorable [Sidney] Lumet films could be shot there, nor the recent ‘American Gangster.'”

Even Mr. Varod acknowledged that for some sequences, the capital of Bulgaria is no substitute for what he called “the Capital of the World.” The Boyana site is well suited for complicated action scenes, but “I still believe that you should do a one-camera shoot for one or two days in New York to open up the movie and get some wide shots.”