The importance of ultimate legal compliance for each and every Bulgarian citizenship by investment application
Bulgarian address – prerequisite to obtain Bulgarian Citizenship by Investment
Bulgarian citizenship by investment application implies having permanent residency in the country. The right to reside permanently in Bulgaria requires from the applicant to have an official legal physical address in Bulgaria. The permanent residency status, along with the official address need to be maintained for at least 12 months. Only then is the applicant allowed to continue to the second step of the procedure – the citizenship application.
No requirement to reside in the country, but maintaining an address is obligatory
During this period there is no requirement for the future citizenship candidate to live permanently in the country. However, the person has to maintain a reliable physical address in the country at all times.
“Reliable address” comes with a lot of conditions attached
A “reliable address” has to meet the following conditions:
- To be legal address that exists within the residential districts of the country. No address that is for example a commercial building, factory, etc., can be used as it is not a legal residential address. No service, such as virtual office in Bulgaria can be used for the purpose;
- The owner of the property has to declare in front of the Bulgarian tax and immigration authorities that the premises are being rented out to a foreigner;
- All taxes, both income and municipal, of the property need to be paid;
- The ongoing bills of the property (water, heating, electricity) need to be settled dully;
- The owner will need to sign a sworn declaration in front of official Bulgarian notary public that he will provide the property to the said foreigner;
- A special form needs to be pledged by the owner of the property in the municipality, requesting registration of the foreigner. The municipality officials will check all available data and will either allow the registration or will refuse it;
- The owner has to sign official rental contract and to declare it with the tax office as well as to pay income tax for this particular rental contract;
- The property has to be inhabited only by the foreigner, unless its a really big house where more people can be accommodated;
- The address will be inspected by the immigration authorities so the foreigner must be either there personally or the neighbors must be aware that the property is rented out to the foreigner so they can confirm it to the inspectors;
- The property must be in pristine condition, suggesting it is inhabited by a person who is investing 512 000 (or 1 024 000) EUR in Bulgaria.
Legal address – a cornerstone of the citizenship application process
Until 2017 it was still possible to cut some corners with the address registration in Bulgaria. Many agents, in order to shave some cost, were providing addresses in cheap properties, often in unlivable conditions. Many of the landlords never went into the trouble of registering their rental contracts or paying taxes. The immigration authorities didn’t bother much to check the properties at all. Now this is part of the history. Bulgaria has tightened enormously its immigration and tax compliance policies. As a result, the address registration became one of the cornerstones in the whole process of the application for Bulgarian citizenship by investment.
Even the slightest deviation from the conditions (as listed above) may immediately compromise the whole citizenship by investment application!
The State Agency for National Security’s final say on the citizenship application
But the tax authorities and the immigration inspectors are not the only problem for those without reliable address facility in Bulgaria. The “security services” in Bulgaria, in line with the recommendations from the European Commission, are now examining every perspective citizenship candidate with severe scrutiny.
Investment citizenship candidates – expected to maintain adequate living standard
The logic is that an investment citizenship candidate is not likely to be willing to live in a cheap house in the countryside. A low quality apartment, even in Sofia, wont do the job neither. While all this is perfectly legal, for the “State Agency for National Security” it is often sufficient reason to ban the candidate from becoming a citizen.
An investment citizenship applicant should be capable of showing ultimate tax compliance. Not paying the tax of the property he inhabits is another red flag for the security services.
And ultimately, it is extremely unlikely that an investor for fast-track Bulgarian citizenship will be sharing a small apartment with another person. If this is the case, the authorities will consider this candidate as one who is trying to circumvent the legislation and will almost certainly prevent him from becoming Bulgarian citizen.
Even if all conditions are being objectively met, any suspicion that the citizenship candidate has rented “formally” a property, only in order to meet the registration requirements, will compromise the entire process.
So it should be now clear that the official address is a very important part of the citizenship by investment procedure. But what are the options for the citizenship candidate to ensure that his application will be approved? What are the options if the applicant doesn’t plan on living in Bulgaria? How can the applicant rest assured that the national security services will not deem him to be “suspicious” and will not ban his application altogether?
There are obviously two ways to approach this problem: buying a property or renting a really reliable one.
Investing (buying) in real estate in Bulgaria for the purposes of providing reliable registration address
We definitely don’t recommend buying real estate in any country only to fulfill an administrative requirement. If however, the client wishes to invest in Bulgarian real estate anyhow, this may still be an option worth considering.
Bulgarian properties have been on the rise at a speed that is far above the average for the EU. There are still some undervalued property gems to be found in the sea and ski resorts. Properties in the capital Sofia are, in our opinion, overvalued and way too expensive for a first investment in Bulgaria.
Renting reliable property that meets all legal conditions
Our advice is renting property for the registration requirements of the citizenship by investment application. The money spend, even if you don’t actually live in the property, will be much less than what you would lose if buying something you don’t like and have to resell in the short term.
But whatever you do – don’t even think of cutting any corners! Not having legally backed address will jeopardize your citizenship application and will render all your efforts worthless!
The cost of obtaining rental property for your citizenship by investment application process
More expensive than a standard rental contract in Bulgaria
Whether buying real estate property as an investment or to use it for your citizenship application, there will be no difference in the cost. However, if you want to have a rental property for your citizenship application, you can expect paying more than for a normal rental contract (ie between Bulgarians).
No matter how counter-intuitive this may sound (as you will be most probably not even be living in the premises), it is quite easy to explain. The “normal” rental contracts are not being inspected neither by the immigration authorities, nor are being declared the way your rental contract will be. The landlord will be subject to severe controls by the security and tax authorities. The address of the property will be inspected on regular basis. The landlord has to declare in front of notary public all details of the rental. He will also need to apply for registration in the municipality.
The administrative load for the owner of the property is as severe as it can be. In many cases, the price for the rental of a property that is to be used as address for investment citizenship candidate is as much as 3 times higher than a “normal” rental price for similar type of property.
Still worth the hassle (and the cost)
Still, one should start from the fact that the Bulgarian Citizenship by Investment application is a life-changing project. Risking, even the slightest (although a bad address will almost certainly result in a ban for the applicant), should be avoided at all cost!
The Bulgarian Citizenship by Investment program is still the cheapest and most lucrative among all EU citizenship programs. Don’t waste your last chance to obtain fast-track EU citizenship without braking the bank.