Bulgarian Golden Visa and path to Bulgarian citizenship

Your questions about the Bulgarian Golden Visa answered

Today, as we often do, we will answer some of the questions our readers and clients have asked us in the course of the past weeks. The questions below come from clients with Russian, South African and Chinese citizenship, willing to obtain Bulgarian Golden Visa.

The legal basis of the Bulgarian Golden Visa

The first question we often receive is what is the legal ground for the Bulgarian Golden Visa. The Golden Visa, or the Bulgarian permanent residence permit for investment, is regulated by the Bulgarian Foreigners Law:

A permanent residence permit may be obtained by foreigners who have made an investment by acquiring units or shares worth not less than BGN 1 000 000 in collective investment schemes originating in Bulgaria…
Art. 25, par. 1, p. 6V (shortened)

There are also many other investment choices available. We have provided the above as a reference only, as we believe the investment in Bulgarian ETF is the most advantageous from all other options. Please feel free to contact us however if you are interested in the other investment choices.

The investment for the Bulgarian Golden Visa

Another question that is of great importance is the safety of the investment. Our potential clients are asking us who they buy the ETFs from and how are the shares safeguarded.

The beauty of the Bulgarian Golden Visa program is that the investment is and always remains on the account of the applicant. It is never transferred to any third party, it is never blocked and nobody has access to it. We will introduce the applicant to one of the largest wealth management companies in Bulgaria. The company is a member of the American Chamber of Commerce in Bulgaria and the Bulgarian Business Leaders Forum. It is also a member of the Bulgarian Association of Asset Management Companies. All this ensures the smooth process of obtaining of preliminary investment approval, as is required by the Bulgarian Foreigners Law.

As to investment strategy, most of the times, our clients decide on ETF that follows the SOFIX index. At the moment of writing, the SOFIX is up by about 13% YTD and up by 15% for the past year. Past performance however is not a guarantee for the future.

Proof of funds

As part of the process the applicant has to prove that he has sufficient funds. This requirement is foreseen in the Regulations to the Foreigners Law, namely as per art. 39, par. 6, p. 2 of it, the applicant has to present:

A bank reference for an account opened in the name of the foreigner in a credit institution of the Republic of Bulgaria, of another EU Member State, or of a State party to the Agreement on the European Economic Area, or of the Swiss Confederation, or of a third country referred to in Article 27, third sentence of the Anti-Money Laundering Measures Act

Our clients therefore ask whether a bank reference from South Africa or Turkey is sufficient to meet the requirements of the law. So let’s dig deeper into the Bulgarian legislation.

The Anti-Money Laundering (AML) regulations

In accordance with Art. 27 of the AML Act, the measures set forth in Article 25 par. 1 shall be applied in the event that the conditions outlined in Art. 26 are met. Furthermore, Art. 25 par. 3 may be applied in instances where the customer is a credit institution or an individual falling under the purview of Art. 4, par. 5, par. 8 to par. 11 from the Republic of Bulgaria, another Member State, or a third country whose legislative framework encompasses stipulations that are analogous to those set forth in the AML Act.

In accordance with Art. 4, individuals and entities shall implement the following enhanced due diligence measures, commensurate with the level of risk identified, in their business relationships, operations, and transactions with persons from countries that do not fully adhere to international standards for countering money laundering and terrorism financing. Pursuant to Art. 46 of the Anti-Money Laundering Measures Act (AMLA), countries that do not or do not fully apply international standards in countering money laundering and terrorist financing are those designated by the European Commission as high risk third countries.

The relevant AML/CFT measures

When implementing AML/CFT measures, AML/CFT obliged persons should take into account four categories of high-risk third country lists:

Persons from countries and jurisdictions included in the European Commission’s lists of high-risk third countries are subject to the enhanced due diligence measures for persons from high-risk third countries provided for in Article 46 of the AML Act.

The FATF lists, the EU list of non-cooperative jurisdictions for tax purposes and the list of jurisdictions with preferential tax treatment, according to the Ministry of Finance of the Republic of Bulgaria, are used in the identification and assessment of the risks related to the countries and geographical areas where the client or the beneficial owner of the client is registered, established, resident or carries on its business or professional activities or with which it is otherwise connected. The lists shall be used both in the preparation of the obliged person’s own risk assessment under Art. 98 of the AML Act and in the preparation of the customer risk profiles under Art. 16 to 20 of the AML Act Implementing Regulations.

From all of the above, we can conclude that funds held in bank accounts both in Turkey and South Africa can be used for the purpose of obtaining Bulgarian Golden Visa

Family members of the main applicant

So how about the family members of the Bulgarian Golden Visa holder? According to the law, the spouse of the main applicant also qualifies for Golden Visa. This is under condition that they have been married with the Golden Visa holder for at lest 5 years.

The minor children (younger than 18yo) of the main applicant will receive long-term residence permit. Children over the age of 18 can only obtain residence permit under some special circumstances, such as if they are relying exclusively on the support of their parents, etc.

You can also read about some of the challenges (which we will help you to solve) in our article – https://posolstvo.eu/blog/bulgarian-pr-by-investment-family/

As for obtaining Bulgarian citizenship for the spouse of the main applicant, she or he can apply for citizenship, the same as the main applicant, in 5 years after the Golden Visa has been obtained. For those who have obtained Bulgarian citizenship under the special provisions of the old program, this can be also done without the 5 years waiting period, provided the main applicant has obtained Bulgarian citizenship.

The children of the Golden visa holder will become eligible for Bulgarian citizenship if their parent (the main applicant) obtains Bulgarian citizenship. This right is foreseen in the Bulgarian Constitution:

A Bulgarian citizen is anyone at least one of whose parents is a Bulgarian citizen or who was born on the territory of the Republic of Bulgaria, if he/she does not acquire another citizenship by descent. Bulgarian citizenship may also be acquired by naturalisation.
Art. 25, par. 1 of the Bulgarian Constitution

Although guaranteed by the Constitution, the implementation of this right has been for long subject of controversy. You can read more at https://www.bulgarian-citizenship.org/news/bulgarian-citizen-according-the-constitution/.

Residence requirement

Is the Bulgarian Golden Visa holder required to reside certain time in Bulgaria? The answer is NO. There is no residence requirement for the Bulgarian Golden Visa holder. He can reside anywhere he wants, for as far as he maintains his investment intact. You can read more in our article (in Bulgarian).

Surrendering of previous citizenship

In general, the Bulgarian citizenship law requires the applicant for Bulgarian passport to relinquish his existing citizenship. Unfortunately (or luckily) this doesn’t work. We have explained why in our article Renunciation of previous citizenship in order to obtain Bulgarian citizenship. On top of that, there is already a bill by the previous parliament, allowing for a citizenship not to be renounced, reflecting the current law’s impotence.

All in all we believe that in the foreseeable future, the Bulgarian legislation will be amended in a way that renouncing of existing citizenship will not be required. Currently this requirement doesn’t work anyway as it results in absurdities for many non-investment citizenship applicants. You can read more in our article – https://posolstvo.eu/blog/naturalization-renunciation-citizenship/.

More than one citizenship?

It is interesting to know that the citizenship law requires the candidate to relinquish his “existing citizenship”. The wording of the law suggests that a candidate with more than one citizenship should only relinquish one of his citizenship, not all of them.

Language requirement

In general, an applicant for Bulgarian citizenship must know Bulgarian. In some cases, this is not required, but after the recently proposed legal amendments, it is quite possible that this requirement will cover all naturalisation options in future (including the Golden Visa). So far it is uncertain. In general, foreigners from Macedonia, Serbia, Ukraine, Russia and Belarus, with some support from our side, won’t have a problem meeting the legal requirements. For applicants from South Africa or China (especially), a more throughout approach will be required.

So that’s all for today folks. As usual, if you have any additional questions, please don’t hesitate to contact us.