RESIDENCE AND CITIZENSHIP BY INVESTMENT
May 13, 2021
On 12 March 2021, amendments to the Foreigners in the Republic of Bulgaria Act and the Bulgarian Citizenship Act were published in the State Gazette imposing new rules for acquiring the right of permanent residence by investment and Bulgarian citizenship by investment.
The possibility to acquire permanent residence in the Republic of Bulgaria and Bulgarian citizenship by investments in government securities was abolished. This has put a large number of foreign nationals at a disadvantage. Currently, there are a large number of foreign nationals that have purchased government securities, but due to the COVID-19 pandemic, they have failed to complete their procedures for acquiring the right of permanent residence. For some of those people, it is still possible to complete the procedures started (if they have already applied for a D Type visa). But those who have not yet done so will have to follow the new rules that came into force in March 2021.
In this article, we will try to provide more information about the new legal requirements. Through the adopted legislative changes, the Bulgarian legislator introduced new investment opportunities for acquiring a right of permanent residence in the Republic of Bulgaria, and at a later stage – for obtaining Bulgarian citizenship.
LEGAL REQUIREMENTS
The main opportunities for obtaining a right of permanent residence by investment are again listed in paragraphs 6 and 7 of Article 25 of the FRBA. The new requirements are as follows:
1/ A foreign national should make an investment through the acquisition of shares or bonds of Bulgarian companies traded on a regulated market or a multilateral trading system in the Republic of Bulgaria. Their market value should be not less than two million leva;
2/ A foreign national should make an investment in rights under concession agreements on the territory of the Republic of Bulgaria. The value of the contract should be not less than one million leva;
3/ A foreign national should make an investment in shares of an amount of no less than 1 million leva in collective investment schemes originating in the Republic of Bulgaria, operating in accordance with the Collective Investment Schemes and Other Undertakings for Collective Investments Act.
With regard to this investment opportunity, the Bulgarian legislator has introduced a number of specific additional requirements to investment, namely:
– the net value of the assets of each collective investment scheme should be not less than 5 million leva;
– the collective investment scheme should obtain a license or permit from the Financial Supervision Commission;
– their investment strategy should be focused mainly on investments in shares and/or bonds of Bulgarian companies traded on a regulated market or a multilateral trading system in the Republic of Bulgaria;
4/ A foreign national should make an investment in shares of an amount of no less one million leva in alternative investment funds established in the Republic of Bulgaria, managed by persons who manage alternative investment funds, originating in the Republic of Bulgaria, operating under the Collective Investment Schemes and Other Undertakings for Collective Investments Act.
With regard to this investment opportunity, the Bulgarian legislator has introduced a number of specific additional requirements to investment, namely:
– the assets of each fund to be of an amount of no less BGN three million;
– the alternative investment funds and the persons who manage alternative investment funds to be licensed or registered by the Financial Supervision Commission;
– their investment strategy to be focused mainly on investments in Bulgarian assets and to invest only in shares, stocks and bonds of Bulgarian companies, including joint stock special purpose investment companies;
5/ The foreign national should make an investment in the country by depositing in the capital of a Bulgarian company an amount of not less than two million leva for a priority investment project implemented by the company certified under the terms and conditions of the Investment Promotion Act, which is certified by the Ministry of Economy;
6/ A foreign national should make an investment in the capital of a Bulgarian company, whose shares have not been traded on a regulated market for an amount of not less than 6 million leva;
7/ A foreign national should carry out activities on implementation and/or maintenance of an investment for which a certificate for class A, class B, or for a priority investment project has been issued;
8/ A foreign national should make an investment in the country by depositing in the capital of a Bulgarian company of not less than five hundred thousand leva, and the foreign national should be a partner or shareholder holding registered shares and owning at least fifty percent of the capital of the company, and as a result of the investment, new tangible and intangible fixed assets of an amount of no less five hundred thousand leva are acquired and at least ten jobs for Bulgarian citizens are created.
As can be seen, although some of the investment opportunities are new, the amount of investment in them is preserved. In some cases, the amount of BGN 1,000,000 (or EUR 512,000) is still required, as was the case until recently for the popular option of investment in the purchase of government securities. Of course, investments are no longer guaranteed by the State, as was the case with the purchase of government securities. This increases the risk for the money invested. Risk assessment of the investment in the implementation of any of the new investment procedures and the assignment of the procedures to trusted partners is essential for the success of the investment, as well as for the success of the procedures for acquiring permanent residence and Bulgarian citizenship.
OPPORTUNITIES FOR OBTAINING BULGARIAN CITIZENSHIP
Foreign nationals who have made an investment of the type described above may apply for a Bulgarian passport (Bulgarian citizenship) after the expiration of five years from the date of obtaining the right of permanent residence in the Republic of Bulgaria. This is the so-called standard procedure, or slow procedure for obtaining Bulgarian citizenship by investment.
Regardless of the legislative changes made, the Bulgarian legislator also retained the possibility to acquire Bulgarian citizenship by investment under the so-called fast track procedure. The conditions for this are regulated in the Bulgarian Citizenship Act and are as follows:
1/ The foreign national should have acquired a right of permanent residence at least one year earlier on the basis of one of the options above and should have doubled his/her investment under the same provisions of the law.
2/ The foreign national should have acquired a right of permanent residence at least one year earlier on the basis of one of the options above and should have invested in the country by paying in the capital of a Bulgarian company an additional amount of not less than one million leva for a priority investment project implemented by the company certified under the procedure established by the Investment Promotion Act;
3/ The foreign national should have acquired a right of permanent residence at least one year earlier on the basis of carrying out activities on implementation and/or maintenance of an investment for which a certificate for class A, class B, or for a priority investment project has been issued, and during this time, the investments made and put into operation should be maintained above the minimum threshold for issuing a class A investment certificate pursuant to the procedure set forth in the Investment Promotion Act;
4/ The foreign national should have acquired a right of permanent residence at least one year earlier on the basis of investment in the country by depositing at least five hundred thousand leva in the capital of a Bulgarian company, and the foreign national should be a partner or shareholder holding registered shares and owning at least fifty percent of the capital of the company, and as a result of the investment, new tangible and intangible fixed assets of an amount of no less than five hundred thousand leva have been acquired and at least ten jobs have been created for Bulgarian citizens, and he/she has now increased the investment under the same conditions of the law up to at least one million leva, and as a result of the investments, at least twenty new jobs have been created for Bulgarian citizens;
Yosifova, Ivanov and Petrov Law Firm successfully works with some of the leading companies on the Bulgarian market operating in the field of financial services. The experience gained over the years, the established contacts and know-how allow us to achieve the result desired by our customers. We can assist you not only in the actual procedures for applying for a D Type visa, permanent residence permit and Bulgarian citizenship, but also in providing support and protection for your interests in the implementation of your chosen form of financial investment.
If you have any further questions, do not hesitate to contact us via the contact forms listed in the Contacts section, as well as request our free brochure – ‘Bulgarian Citizenship by Investment’.
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