With amendments to the Bulgarian Citizenship Act (BCA) and the Foreigners in the Republic of Bulgaria Act (FRBA) the National Assembly finally decided to retain the possibility of acquiring Bulgarian citizenship and permanent residence permit in exchange of investments. Despite the European Union’s insistence that this option should be abolished, on March 12th, 2021, these legal possibilities were promulgated.
The problem is that investments in Bulgarian companies are only formally made. Short-term investments are made in trust accounts, shares and government securities, and are terminated almost immediately after obtaining a residence permit or after the acquisition of Bulgarian citizenship. The spirit of law – to encourage people who have a real intention to settle in the state and to work for its development and increase the welfare of citizens through investments, is not observed once again. The provisions of the act are used as another “loophole“ in legislation. The main concern of the European institutions is that this option provides an opportunity, essential for all EU citizens – to move freely within the EU, to potentially dangerous persons or to those with unclear and vague intentions.
Permanent residence permit through investments
Despite the above-mentioned obstructions, the amendments did not abolish the option for acquisition of permanent residence on the grounds of investment made, but it only changed the parameters of these investments as a prerequisite for acquisition. Thus, as of March 15th, 2021, a permanent residence permit in Bulgaria can be obtained for an investment in:
- shares or bonds in a Bulgarian company, traded on a regulated market or a multilateral trading system, worth not less than BGN 2 million;
- concessions worth no less than BGN 1 million;
- shares amounting to minimum BGN 1 million in Bulgarian collective investment schemes, provided that the net asset value of each scheme exceeds BGN 5 million, and their investment strategy is mainly focused on shares or bonds of Bulgarian companies;
- shares amounting to minimum BGN 1 million in alternative investment funds in Bulgaria, provided that the assets of each fund are worth at least BGN 3 million and the investment strategy is mainly in Bulgarian companies;
- at least BGN 2 million, targeted at supporting a Bulgarian company for the implementation of a priority investment project, certified under the Investment Promotion Act;
- minimum BGN 500,000 if the foreigner is an owner of at least 50 % of a Bulgarian company’s share capital.
Prolonged residence permit through investments
Another new option introduced by the amendments to the FRBA is the so-called “Startup visa” for prolonged residence. This visa is a certificate for a high-tech and / or innovative project issued by the National Research and Innovations Agency. Thus, in order to obtain a prolonged residence permit, the applicant should:
- a Startup visa;
- a long-stay visa; and
- own at least 50 % of a Bulgarian company’s share capital minimum (as a partner or as a shareholder).
With the amendments to the BCA, Bulgarian citizenship can be acquired by an adult, unconvicted foreigner who has received a permanent residence permit through any of the investments above not less than one year ago and:
- has doubled his/her investment; or
- has invested in the share capital of a Bulgarian company an additional amount of minimum BGN 1 million for a priority investment project implemented by the company, certified under the Investment Promotion Act.
A new opportunity for Bulgarian citizenship acquisition through investments is provided for an adult, unconvicted foreigner who has received a permanent residence permit not less than one year ago and:
- has doubled the minimum investment already made for the residence amounting to BGN 500,000 in a Bulgarian company’s share capital, i.e. the total amount invested would amount to BGN 1 million;
- still owns at least 50 % of the share capital of this company;
- as a result of the investment new fixed tangible and intangible assets worth no less than BGN 500,000 have been acquired;
- the number of number of job positions opened for Bulgarian citizens for the residence permit acquisition procedure (10) have been doubled – i.e., the total number of job positions opened is 20.
Spouses of investors
An investor’s spouse may also acquire Bulgarian citizenship – under a simplified procedure, if he/she:
- has obtained a permanent residence permit in Bulgaria no less than three years before the date of submission of the application for acquisition of citizenship;
- has turned the age of 18 and has not been convicted;
- has an income or occupation that enables him/her to support himself/herself in Bulgaria;
- his/her spouse has acquired Bulgarian citizenship through investment in one of the ways described above.
Procedural changes regarding Bulgarian citizenship acquisition
The BCA provides for a faster Bulgarian citizenship acquisition procedure by naturalization, including through investment. According to the amendments adopted, the proposal to the President to issue a citizenship decree will be posed within 12 months, not 18 months, as of the submission of the citizenship application.
The performance of the investments under the BCA and the FRBA shall be monitored and followed-up by the Ministry of Economy and the Bulgarian Investment Agency under terms and conditions that will be determined in an ordinance of the Minister of Economy.
Although these changes represent the current legislation into force, it is not yet clear what the response of the European institutions will be and whether further amendments to the regulation of citizenship and residence will be adopted.