Company incorporation in Bulgaria

Immigration to Bulgaria

Immigration to Bulgaria

The newly adopted on February 13, 2013, by the Parliament amendments in the Investment Encouragement Act were published in issue 16 dated February 19, 2013, of the State Gazette. Since the President of the Republic imposed a veto, a major part of the initial text of the Act was amended in accordance with the demands of the President. More significant amendments concern the Bulgarian Citizenship Act and the Foreigners in the Republic of Bulgaria Act. Less than a month after the said amendments were adopted, the Parliament made additional amendments in the Foreigners in the Republic of Bulgaria Act. Some of the significant amendments are as follows:

1. Bulgarian Citizenship Act

A new art. 12a is adopted, introducing two new grounds fro acquisition of of Bulgarian citizenship by foreigners have acquired a permanent residence permit because they:
• has invested more than BGN 1 000 000 or increased his/her investment with the same amount, in one of the manners, provided by law or
• has invested in the share capital of a Bulgarian commercial company, whose share are traded on a regulated market, an amount of at least BGN 6 000 000 or
• performs an activity and is certified, following the procedure of the Investment Encouragement Act, as a Manager of a Company or a Procurator, registered with the Commercial Register, or as a employee, hired with an employment contact for the performance of a key and/or control function in a science-research, industrial, marketing or other major activity of the enterprise or other activity, required for the purposes of the investment and has performed an investment in Bulgaria of at least BGN 500 000 in the share capital of a Bulgarian commercial company, whereas the foreigner is a shareholder and owns at least 50% of the company’s share capital and the result of the investment is acquisition of new long-term material or immaterial assets of at least BGN 500 000 and at least 10 new jobs for Bulgarian citizens have been created and maintained for the entire period of residence, certified by the Ministry of Economy, Energy and Tourism may acquire Bulgarian citizenship if he/she:
- has reached age of majority;
- has acquired a permit for permanent or long-term residence in the Republic of Bulgaria at least 5 years ago;
- has never been convicted for any intentional indictable offences by a Bulgarian court and there are no criminal law procedures initiated against him/her for an offence of that sort, unless if he/she has been rehabilitated.
- possesses an income or performs an activity, which allows him/her to support himself/herself financially in the Republic of Bulgaria.

A new art. 14a of the Bulgarian Citizenship Act is adopted as well, which provides the possibility for “a person who is not a Bulgarian citizen and” has reached age of majority and has never been convicted for any intentional indictable offences by a Bulgarian court and there are no criminal law procedure initiated against him/her for an offence of that sort, unless if he/she has been rehabilitated, “may acquire Bulgarian citizenship by a naturalization, if:
1. he/she has received at least an year ago a permit for permanent residence in the Republic of Bulgaria under art. 25, par. 1, p. 6 or 8 of the Foreigners in the Republic of Bulgaria Act and has invested at least BGN 1 000 000 in the share capital of a Bulgarian commercial company, which performs a priority investment project, certified following the procedure of the Investment Encouragement Act;
2. he/she has received at least an year ago a permit for permanent residence in the Republic of Bulgaria under art. 25, par. 1, p. 13 in relation to art. 25c, par. 2, p. 1 of the Foreigners in the Republic of Bulgaria Act, during which period the investments made and entered into exploitation are maintained above the minimum for issuing of a certificate for investments class A, following the procedure of the Investment Encouragement Act, which is certified by the Ministry of Economy, Energy and Tourism.

Paragraph 2 of the newly adopted art. 14a states that in the events of p. 2, “the Bulgarian company should not:
1. have been declared in bankruptcy or bankruptcy procedure, or have concluded an out-of-court settlement with its creditors under art. 740 of the Commercial Act;
2. be in procedure of liquidation;
3. have any pecuniary obligations towards the State or the Municipality in the meaning of art. 162, par. 2 of the Tax and Social Security Procedure code, assessed by an entered into force act of a competent authority, unless if rescheduling or postponement of the duties has been made.
4. have any unpaid labour remuneration towards worker and employees, assessed by an entered into force penal order.”

In accordance with paragraph 3 of art. 14a, “the verification and control of all circumstances and conditions under par. 1, p. 2 are performed on the basis of annual financial statements and report for the activity of the enterprise, certified by an auditor, registered under the Independent Financial Audit Act, reference from the National Revenue Agency, Municipality, as well as other relevant documents, provided by the person under art. 1 or collected ex officio.” To art. 22, regarding the reasons for revocation of naturalization, based on which a person has acquired Bulgarian citizenship, is added point 3, which is an alternative reason for such revocation, namely when the investments, based on which he/she has acquired Bulgarian citizenship, for at least two years period, starting on the date of his/her naturalization, if the cases of art.14a, par. 1 has not been maintained.

In art. 35, a new point 5 is created, which determines a six-month period for the Minister of Justice to make a proposition for the issuing of a decree under art. 34, for the requests for acquisition of Bulgarian citizenship by naturalization under art. 12a and 14a.

2. Foreigners in the Republic of Bulgaria Act

In art. 24, par. 1 are created new grounds for acquisition of long-term residence permit by acquire foreigners, which hold visa under art. 15, par. 1” (visa for long-term residence with a validity term of up to 6 months and with a right to reside in Bulgaria up to 180 days) and namely:
1. have invested the amount of no less than BGN 600 000 – for each foreigner, for the acquisition of real estate property in the Republic of Bulgaria or the foreigner is the owner of more than 50% of the share capital of a Bulgarian commercial company, has invested the same amount in the share capital of the company and by doing so, the company has acquired a real estate property in Bulgaria for the same amount; to the date of filing of the application for the permit of long-term residence, the foreigner or the legal entity must have repaid the entire amount, which should be in an account at a licensed Bulgarian credit institution, and if the real estate is acquired with a loan, the part of the loan which is not reimbursed should not exceed 25%;
2. have made an investment in an economically underdeveloped region, as defined by the Investment Encouragement Act by repaying into the share capital of a Bulgarian commercial company at least BGN 250 000, whereas the foreigner is a shareholder and owns at least 50% of the company’s share capital and the result of the investment is the acquisition of new long-term material and immaterial assets of at least BGN 250 000 and at least 5 new jobs for Bulgarian citizens have been created and maintained for the entire period of residence, certified by the Ministry of Economy, Energy and Tourism.”

In art. 25, par. 1 a new point 16 is created, according to which a permit for permanent residence may be acquired by foreigners who “have made an investment in Bulgaria by paying into the share capital of a Bulgarian commercial company at least BGN 500 000, whereas the foreigner is a shareholder and owns at least 50% of the company’s share capital and the result of the investment is the acquisition of new long-term material and immaterial assets of at least BGN 500 000 and at least 10 new jobs have been created and maintained for the entire period of residence, certified by the Ministry of Economy, Energy and Tourism.”

The newly adopted paragraph 4 of art. 25 of the Foreigners in the Republic of Bulgaria Act states that “for the purposes of evaluation for the issuing of a certificate from the Ministry of Economy, Energy and Tourism may be used annual financial statements and report for the activity of the enterprise, certified by an auditor, registered under the Independent Financial Audit Act, reference from the National Revenue Agency, Municipality, as well as other relevant documents, provided by the person under art. 1 or collected ex officio.”
A new art. 25c, par. 1 states that “permit for permanent residence, under art. 25, par. 1, p. 13 may be acquired by a foreigner, who performs an activity for the execution and/or maintenance of an investment, which has obtained a certificate for class A, class B, or for a priority investment project, under art. 20, par. 1, p. 1 of the Investment Encouragement Act.”

Paragraph 2 of the same art. 25c states that “in the Bulgarian commercial company with investment, which has obtained a certificate under art. 20, par. 1, p. 1 of the Investment Encouragement Act, the foreigner must be:
1. a shareholder, owning at least 50% of the company’s registered share capital;
2. representative of the company or procurator, registered with the Commercial Register, or
3. hired with an employment agreement for the performance of a key and/or control function in science-research, industrial, marketing or other major activity of the enterprise or other activity, required for the purposes of the investment.”

Paragraph 3 of the aforementioned newly created art. 25c states as follows: “No later than on the 3rd year, starting on the day of execution of the investment project, the competent body of the commercial company, under par. 2, certifies that the minimum threshold for issuing of a certificate for investment class B, as proscribed by the Investment Encouragement Act, has been reached regarding the investments, performed and entered into exploitation and/or the created employment as average number of the personnel.”

Par. 4 of art. 25c also clarifies that “the total number of persons, under par. 2, who may acquire permit for residence in Bulgaria, under art. 25, par. 1, p. 13 in relation to the performance and maintenance of an investment project, is:

1. until the conditions of par. 3 are met – up to 3 persons;
2. after the conditions of par. 3 are met, during the period of maintenance of the investment and the employment – up to 8 persons.”

Par. 5 of the newly created art. 25c states that “the requirements of art. 13 of the Investment Encouragement Act shall be applied to the Bulgarian commercial company and the person, under par. 2 of art. 25c.” The said requirements of the above-mentioned art. 13 are as follows:
“(1) Investments shall not be encouraged if coming from a person:
1. convicted with an entered into force court decision, unless if he/she has been rehabilitated;
2. declared insolvent or part of initiated procedure for insolvency, or who has concluded an out-of-court settlement with its creditors, as proscribed by art. 740 of the Commercial Act;
3. is in procedure of liquidation;
4. has any pecuniary obligation towards the State or the Municipality in the meaning of art. 162, par. 2 of the Tax and Social Security Procedure code, assessed by an entered into force act of a competent authority, unless if rescheduling or postponement of the duties has been made.
5. has any unpaid labour remuneration towards worker and employees, assessed by an entered into force penal order.

(2) Investments shall not be encouraged if coming from a foreigner, of whom it has been assessed in his/her own country one of the circumstances under par. 1 (hereabove), according to his/her own national legislation.

(3) The requirements of par. 1, p. 1 concern the sole owners of the share capital, the managers or the members of managing bodies of the investor, and if the said member are legal entities – the requirements concern their representatives in the relevant Managing body.”

Par. 6 of art. 25c states that “the Ministry of Economy, Energy and Tourism issues certificate for fulfillment of the requirements under par. 2 – 5, which is to be used before the services of administrative control of foreigners. The certificate is issued after a motivated statement of the Bulgarian commercial company, under par. 2, for the necessity of residence of the foreigner for the performance and maintenance of the investment and the company undertakes the obligation to immediately inform the Ministry of Economy, Energy and Tourism in case of termination of the relation with the said natural person.”

Amendments of the Foreigners in the Republic of Bulgaria Act, published in issue 23, dated March 8, 2013, of the State Gazette.

In art. 9d is amended par. 1 and new 2nd paragraph is adopted. The current text therefore says the following:
“(1) The issuing, the refusal of issuing, the annulment and the cancellation of a visa shall be performed by the diplomatic and consular missions of the Republic of Bulgaria abroad and by the border control authorities, and the annulment and the cancellation – by the authorities for administrative control of Foreigners.
(2) The issuing, the refusal of issuing, the annulment and the cancellation of a visa for an airport transit, for a short-term residence or visas, issued by the border control authorities, shall be performed in accordance with the conditions and the procedure, determined by Regulation (EC) № 810/2009 of the European Parliament and the Council on July 13, 2009, establishing a Community Code on Visas (Visa Code) (OG, L 243/1 of September 15, 2009).”

Another significant amendment of the Foreigners in the Republic of Bulgaria Act is the newly created p. 24, added to art. 10, par. 1. It is thus created an additional reason for refusal of issuing of a visa to a foreigner or him/her entering in Bulgaria, which applies when “there are legitimate doubts regarding the authenticity of the submitted documents for the issuing of a visa, the truthfulness of their content, the reliability of the statements made by the Foreigner or his/her intention to leave the country before the expiration of the visa for which he/she applies.” The expression “legitimate doubts” has been legally defined in the complementary provisions of the Act. Legitimate doubts are “doubts regarding the risk of illegal immigration, when, based on the interview and the submitted documents, it is established that the candidate uses the travel purposes as an excuse for an illegal residence in the Republic of Bulgaria, or when there are contradictions between the Foreigner’s statements and his/her intention to leave the country before the expiration of the visa for which he/she applies.”

In art. 24, par. 1 one of the reasons to acquire a long-term residence permit has been removed. Prior to that amendment a long-term residence permit might have been acquired by a Foreigner, who besides having the required long-term residence visa under art. 15, par. 1, was married to a foreigner with a permanent residence permit. The latter reason to acquire a long-term residence has been removed.
In art. 24d are created the new paragraphs 4 – 7, whereas the previous paragraphs 4, 5, 6, 7 and 8 become respectively 8, 9, 10, 11 and 12. The newly adopted provisions state that “a long-term residence may be also given to a Foreigner, who is under international protection.” The expression “international protection” is once again legally defined in the complementary provisions of the Act, as follows – “refugee status and humanitarian status, as defined respectively by art. 8 and art. 9, par. 1 – 7 of the Asylum and Refugees Act.” The possession of a residence permit in another State member of the EU, as provided protection, but not international protection as defined hereabove, is not a reason to acquire a long-term residence status in Bulgaria.

In accordance with the newly adopted par. 4 of art. 33h of the Foreigners in the Republic of Bulgaria Act, when a Foreigner, who is under international protection in another State member of the EU, is applying to acquire a long-term residence status in Bulgaria, he/she may be expelled before he/she has obtained the right to long-term residence, if there are “reasons to believe that he/she is a serious threat to the national security” or if he/she has been “convicted with an entered into force court decision for a serious criminal offense and is a threat for the public order.” In accordance with the same art. 33h the Foreigner “may be expelled in a different country than the one which has provided him/her the international protection status, following the requirements of art. 44, par. 1.”

Amendments to art. 39a, which concerns the imposition of coercive administrative measures on foreigners, have also been adopted. The prohibition to enter, which may be imposed on a foreigner, shall from now on concern not only the entering in the Republic of Bulgaria, but also the entering “on the territory of the European Union member States".


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