Cyprus: The Cypriot CIP falls the first victim of the tightened regulations introduced by the EU authorities. Read more.
"Let them be what they want to be. Make yourselves what you want to be." - Harshvardhan Malpani
Most of the "would be candidates" for Bulgarian and EU citizenship by Investment have been horribly bothered since the start of 2019. All the worries came from the rumours that the Bulgarian government has decided to end the provisions that allow obtaining fast-track Bulgarian citizenship by Investment. So let’s recap what has happened so far and what may eventually change for those who have already realized that the Bulgarian CIP can not be matched by any other EU CIP.
Bulgarian Citizenship by Investment program to stay - read the details below
Our co-founder, Lawyer Hristo Vasilev talking on Bloomberg about the latest proposals from the Bulgarian Ministry of Justice to amend the Bulgarian Citizenship by Investment Program (english subtitles available).
Roughly, since the start of 2019, under pressure from the European Commission, the three EU countries – Malta, Cyprus and Bulgaria, who have implemented laws that allow them to grant citizenship by investment (fast-track) to non-EU citizens, were encouraged to amend their Citizenship by Investment programs in order to achieve better legal transparency and full compliance with (mainly) money-laundering regulations.
As a result, the Bulgarian Ministry of Justice, in an attempt to at least partially close the gap with the programs of Malta and Cyprus (mainly in terms of the cost and the required due diligence for the program) has proposed on 22.03.2019 an amendment to the Bulgarian Law for the Citizenship. Coincidentally (or not), the Bulgarian justice minister Mrs Tsetska Tsacheva resigned on the next day after the draft was published, over an alleged scandal with a real estate deal. Her resignation will certainly change the plans of her (ex) Ministry to push forward the proposed amendments of the law (of which she was the main supporter).
The proposed draft, in its current shape, may change significantly before its final approval by the Bulgarian Parliament, or may be rejected altogether, leaving the current Bulgarian Citizenship Law "as is". Our comments are based only on what has been officially proposed so far.
The legal procedure for a bill to become a law in the Bulgarian Parliament (please read more on the topic below) can take from a few weeks to several months, with many bills being ultimately rejected. Our professional opinion is that the proposal of the Ministry of Justice will be eventually supported by the Parliament, but it will definitely be amended significantly from its proposed shape.
How does a Bill become a Law in Bulgaria
The process of approving new laws in Bulgaria starts with the proposal of amendments by certain bodies that have "legislative initiative rights" (ie the Council of Ministers). The legislative procedures to pass the bill through the Parliament can take more than six months and can be outlined in the following steps:
- The bill is submitted to the Parliament and is then distributed to the relevant Standing Committees;
- The Standing Committees consider whether the bill is acceptable and submit a "motivated" report to the President of the National Assembly;
- The first voting of the deputies takes place where the bill is debated in its entirety (and not text-by-text);
- If the first voting is successful, a second voting of the deputies takes place. The National Assembly debates and adopts the bill chapter-by-chapter (text-by-text), title-by-title or paragraph-by-paragraph. Here is when some of the legal articles may be rejected or accepted, so the eventual final text may change significantly;
- The (eventually) adopted legal act is sent to the President of the Republic of Bulgaria to sign a decree for its promulgation or enforce a veto and return the act to the Parliament;
- If the President doesn’t veto and accepts the provisions of the bill, the act is promulgated in the Bulgarian State Gazette and becomes effective.
Bulgarian fast-track citizenship by investment to stay
Even if the current draft proposal passes through the Parliament, the Bulgarian Citizenship by Investment will be still preserved (the now ex-minister of Justice had at one point stated that citizenship by investment would be cancelled). The standard and fast-track options will be preserved too. What will change are the investment options, which will be permitted under the program.
The eligible investments as per the new amendments
If the amendments pass in its original form, the acceptable investments for the fast-track option will make the Bulgarian CIP quite similar to the USA EB-5 visa program (but will grant full EU citizenship in one year). The required investment threshold will remain unchanged and will be still very low compared to the other EU CIP’s. 50% of the investment may be still done in Bulgarian government bonds, equities and other currently eligible instruments while the 50% - in certified priority investment projects.
Certified Priority Investment Projects (CPIP) - the new key to affordable fast-track EU citizenship
Regardless of whether the Bulgarian Citizenship Law will be changed or not, CPIP has already became the hot ticket in Bulgaria and the EU as a whole. Since the accession of Bulgaria in the EU in 2007, about a hundred projects have been certified with 7 of them being prioritized. The number of these is set to skyrocket if the Citizenship Law is amended. We are in position to fully advise you on the matter and will be soon dedicating a special hotline to assist clients who wish to utilize this new opportunity (not only to obtain Bulgarian citizenship if the law changes, but also for many other investment opportunities).
If your application has been already submitted or is set to be submitted before any amendment of the Citizenship Law is effected, you application should not be affected. The Government has indicated that these cases will be handled as per the existing (now) law.
The Bulgarian fast-track program will continue to exist, even if the Law is changed as per the published amendments (draft). The investment options for the second instalment however will be different, so you may consider an investment in CPIP, for which we will gladly assist you.
All in all however, the end of the cheap EU citizenship is approaching with the speed of light. No matter how the Bulgarian CIP will develop in the forthcoming 2-3 years, the EU has already taken its course towards a much stricter admission rules for any new (investment) citizens. Cyprus has already announced its harsh measures and huge price increase. Malta is overly expensive and its rejection rate is outrageous. Those who have already gotten their Bulgarian passports under the CIP have literally won the jackpot. The ones who didn’t start the dance yet are now being lured by exotic new (citizenship by investment) offers from countries like Moldova and Montenegro, but these are worth nothing as they are not being part of the EU (hence no residency rights, no nothing).