By Moustafa Daly
“The new rules regulate how exactly the investment needs to be done so that the candidates can obtain permanent residence by investment (AKA Golden Visa),” says Alexander Dobrinov from Vasilev-Dobrinov & Associates. “Such a preliminary approval was introduced with amendment in the Foreigners Law, but the time it took to draft the exact rules was outrageous.”
The Bulgarian government approved changes to the Aliens in the Republic of Bulgaria Act on April 25. The move act details the framework by which foreign investor can obtain Bulgarian residency by investment – however as per the Act, a road to citizenship is no longer an option for foreign investors – except for those who take up full residence in Bulgaria for a period of at least five years.
What are the new rules to Bulgaria’s RBI?
The new rules mostly pertain to regulating the pre-clearance process for RBI applicants. While the investment threshold and procedures remain the same, applicants will now have to abide by these rules should their applications be successful.
First off, applicants must obtain a bank reference for an account opened in their name either in Bulgaria or elsewhere in the EU. They also need to provide a declaration that attests to the source of funds in a government-approved template – in an attempt to fight money laundering activities and funds obtained via unknown sources.
Politically-exposed-person status of the applicants must be declared in a signed document following the approved template of the government, as well as documents showcasing applicants’ professional and investment activities.
As with most RBI programs, criminal record certificates need to be submitted, and a notary-certified power of attorney should the applicants be unable to submit their applications personally.
“There are also new responsibilities introduced where the investor has to immediately notify the authorities about any change of his investment,” explains Dobrinov.
Political turmoil may stall the program
Though these changes are meant to regulate and streamline the golden visa process, some industry professionals are skeptical.
“Bulgaria is in political turmoil since quite a long time and even after the most recent elections in April, the chances that a government will be formed are dim,” says Dobrinov. “The current Minister of Justice is one of the fierce opponents of investment citizenship and it is hard to imagine that he is a supporter of the investment residence either. Basically, the political sentiment is pretty much against any sort of investment minded immigrants.”
“All that leads us to believe that the rules are written purely as per the law and they don’t introduce any new challenges,” he adds.
Could Bulgaria’s program be a viable alternative to Portugal and Ireland?
The changes to Bulgaria’s program streamline and clarify the process after a period of uncertainty in the country’s RBI industry since the 2021 vote. They may open the door for Bulgaria to attract foreign investors seeking EU mobility.
This comes on the tails of two major EU golden visa programs coming to an end, first is Ireland’s Investor Visa, which was abruptly halted in February, and Portugal’s golden visa program, one of the continent’s most popular, which is in the process of being scrapped after the government there blamed the program for the hike in property prices.
This positions Bulgaria in a relatively favorable place to leverage its program. However with an investment threshold of over €500,000, it may come in direct competition with other programs in the continent that have cheaper options, namely Greece’s golden visa program which grants investors golden visas for as little as €250,000 in non-tourism areas of the country.
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