Full name: Republic of Bulgaria
Capital city: Sofia
Population: 6,896,663 (2021).
GDP in Current prices: USD $63.65 billion (2018)
GDP real growth: 3.2% (2018)
Area: 110,994 km² (land 108,560 km²)
Government: Unitary parliamentary republic
President: Rumen Radev
Prime Minister: Boyko Borissov
Currency: Lev (BGN)
HDI: 51st (2018)
Ease of doing business index: 59th (2018/19)
Time Zones: GMT +2
Dialling code: 359
The Republic of Bulgaria is located in Southeast Europe within the Balkan Peninsula. It is a predominantly mountainous country surrounded by Greece and Turkey to the south, Macedonia and Serbia to the west, Romania to the north, and the Black Sea to the east. The Danube, (which at 2,850 kilometres is Europe’s second-longest river), forms much of the 627 km border between Bulgaria and Romania and has been a major contributor to the economies of both countries, being a key trade route between Europe and the Middle East. With a total area of 110,994 square kilometres, Bulgaria is the 16th largest country in Europe and is slightly bigger than the US state of Virginia, the 35th largest state in the US by area.
Citizenship by Investment
The Bulgarian government in 2009 introduced the Investor Program for Residence and Citizenship. One of the many perks of the permanent residency and Bulgarian passport is that it provides visa-free or visa-on-arrival access to 169 countries.
First and foremost, the applicant needs to assign a professional to perform preliminary due diligence and ensure legal compliance. If this step is neglected, the applicant might encounter serious compliance issues in the later stages of the application.
Applicants choosing the full investment path must deposit BGN 1 million, which is equivalent to €511,292, into government bonds for a five-year period, after which the full amount of the investment will be returned to the investor, without interest. The standard processing time for permanent residence is about six to nine months and applicants can apply for citizenship after five years in permanent residency status, even though there is no longer a physical requirement to reside in Bulgaria. Dual nationality is permitted.
If applicants wish to fast track their application, they can do so by investing twice the amount (so a further €511,292). The investment can either be in government bonds or in the share capital of a listed Bulgarian company within the Priority Investment Project (PIP) as defined in the Encouragement of Investments Act. The processing time for permanent residency is still six to nine months, but the waiting time for citizenship is reduced from 60 months to 18 months.
In addition, applicants should expect to pay initial legal fees of €25,000 for permanent residency including spouses, plus a further €2,500 for each additional family member.
To qualify for both these options applicants must:
- Be a non-EU citizen
- Possess a valid passport/ any foreign travel document
- Provide supporting documents and origin of invested funds
- Have no criminal records
- Attest the power of attorneys and the investment agreement
- Make a minimum of two statutory trips to Bulgaria to file for permanent residence and subsequently to register residence and receive the documentation.
The Bulgarian government had been planning for changes to their citizenship law and they published a draft Bill of the proposed changes on 22 March 2019. The draft Bill will focus solely at citizenship rather than permanent residency. However, the draft may have significant changes to it before being finalised, or it could potentially be rejected as a whole, leaving the law as it is.
If the proposal passes, they will continue both the standard track and the fast track application. The changes will direct more towards the investments that will be permitted. The investment selection that is proposed will most likely make the Citizenship by Investment program more similar to the American EB-5 programme.
In the Fast Track option, the applicants that want to get citizenship will now have to invest a second time in a ‘priority certified investment project’. The investment will have to be made ‘in the capital’ of the company that does the project, as long as the project is approved under the Encouragement of Investment Act (EIA). The first investment that the applicants make will still be available to be made in bonds or shares of a listed company.
If applicants already submitted their application for citizenship before the changes come into effect, they will carry on under the old law. If they apply for citizenship after it has been amended, it will be processed according to when and how the applicant first started their application.
On 26 February 2021, the Bulgarian Government approved а new bill amending the Bulgarian Citizenship Act and this has impacted Bulgarian Citizenship Program, which was in favour of new investment and a fast track program.
The Main changes
- New improved investment options
- Scrapped government/sovereign bonds
- The investment amount €500,000, however if you double the investment to €1m you are eligible for the fast track options
- Investment in equities has increased
- Additional assurances to applicants are introduced
- Safeguarding spouses
- Processing timelines are expected to be expedited
The overhauled investment routes leading to permanent residence and citizenship now are:
|Investment options||New amount|
|1||Stocks traded in Bulgaria||EUR 1,024,000|
|2||UCITs (EU regulated fund vehicles) including exchange-traded funds (ETFs) with a focus on Bulgaria||EUR 512,000|
|3||Investing in any way in Alternative investment funds (AIFs) (including private equity, venture and hedge funds), a part of whose focus is on Bulgaria||EUR 512,000|
|4||Participation in a Bulgarian company carrying on a Certified Priority Investment Project (CPIP) – these are analogues of EB-5 Regional Centers||EUR 1,024,000|
|5||Investing in a Bulgarian company that creates 10 Bulgarian jobs||EUR 257,000|
|6||Investing in a Bulgarian private company, special sector apply||EUR 3,075,000|
|7||Investment in a Certified Investment Project (CIP) (this is different to CPIP above)||Amount are based on the projects|
Applicants from 1-4 are considered fast-track by:
- Doubling their investment “on identical statutory terms”; or
- Investing at least ~EUR 512,000 / ~USD 620,000 in a CPIP (as above)
Applicants using option 5 can fast-track by:
- Doubling their capital investment, leading to the hiring of 20 people
Criteria – The investment must be maintained minimum for 2 years, however 5 years in total.
Why invest in Bulgaria?
On 1 December 1996, Bulgaria joined the World Trade Organisation (WTO) and a new pro-reform coalition came to power in Spring 1997. Since then, with initial help from the IMF, the economy has become an open, upper-middle-income market economy, with a much higher private sector and a smaller public sector. The programme of privatisating major state-owned companies attracted substantially higher foreign direct investment, to the point where the developed private sector now accounts for more than 70% of GDP.
Of the 2017 GDP, Services accounted for 66.9% of GDP, Industry 28.4% and Agriculture 4.7%. The country’s main industrial exports are iron and steel, machinery and refined fuels. Bulgaria is also renowned for its wines and dairy products. Bulgaria’s biggest trade partners are Germany (13% of total import and export trade), Italy (8%), Romania (8%), Turkey (7%) and Russia (6.5%).
Bulgaria has one of the lowest corporate tax rates in Europe at just 10%, making it an attractive base for foreign business investors. Personal income tax for all citizens has also been set at a flat rate of 10% since 2008. The national currency – the lev – is one of the most stable currencies in Eastern Europe and has been pegged at 1.95583 leva (BGN) to one euro.
Tourism is a leading contributor to the economy of Bulgaria. Over 9 million foreign tourists visited Bulgaria during 2018 compared with 2.3 million in 2000. A figure of 8.834m was confirmed for the first 11 months of 2018, 4.9% up on the corresponding figure in 2017 which included a record winter sports season. Sofia is a thriving capital city and one of the most visited tourist destinations in addition to the coastal resorts and winter resorts. But many tourists are also attracted inland to the many cultural villages and nature parks, which are some of the most popular attractions in Bulgaria.
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