Investment in UCITS/Mutual Funds as route to Bulgarian Residence and Citizenship12 February 2024
Bulgaria is back аnd at the forefront of Residence and Citizenship by Investment (R/CBI) programmes with a fast-track route to Schengen permanent residence (PR).
Bulgaria, an EU member state since 2007, will join the Schengen Area on March, 31st 2024. After that date, holders of Bulgarian PR permits will be eligible for visa-free travel to the remaining Schengen States. This enables investors to access the EU and abolishes the inconvenience of visa applications and border checks.
To qualify for PR, investors can choose from various assets:
- Stocks of a listed company traded on the Bulgarian Stock Exchange-Sofia – BGN 2,000,000
- Units in one or more of several types of fund (UCITS, ETFs and AIFs) focused on the Bulgarian market – BGN 1,000,000
- Companies carrying out a Certified Priority Investment Project – BGN 2,000,000
- Companies employing Bulgarian staff – BGN 500,000 + 10 employees
- Private companies invested in any sector and geography – BGN 6,000,000
- Investment Projects (different from the Certified Priority Investment Projects) – depending on the sector
The Bulgarian lev (symbol BGN) is pegged to an exchange rate of BGN 2=EUR 1.
Having a myriad of investment options allows investors to choose an asset or a mixture of assets that suits their investment profile.
The majority of the interest so far has been in investing in UCITS, ETFs, and AIFs.
Collective Investment Schemes (UCITS) – an EU version of Mutual Funds
Currently there are more than 120 UCITS in the form of mutual funds in Bulgaria.
The mutual fund issues units which give the right to a share of the fund’s assetsand other rights given by law or in the rules.
To make an investor eligible for the programme, a mutual fund needs to:
- a) have a net asset value of more than BGN 5 million ( EUR ~2.6 million);
- b) be licensed in Bulgaria
- c) to be strategically focused in equity and corporate bonds (not government bonds) of Bulgarian companies, traded on stock exchanges or on a multilateral trading facility
On request, our specialised team can direct you to licensed Fund Managers in Bulgaria who would be able to provide you with more information.
Before investing (importantly), the applicant must undergo pre-clerarance . This is carried out by the Bulgarian Investment Agency (“BIA”). The purpose of pre-clearance is to provide assurance for anti-money laundering (“AML”) law purposes.
The documents needed include a bank reference in respect of a Bulgarian lev or euro account for the investor demonstrating the funds; a CV or similar and a criminal record from the country of origin or current permanent residence.
Visa and Permanent Residence
Once the pre-clearance and investment certification process has been completed, the investor can apply for a Long-Term D visa.
Review of the Long-Term D visa application takes approximately a month and after visa grant, investors can make their first trip to Bulgaria to apply for PR status.
The PR status application ought to take 2 months or less. A second trip to Bulgaria can then be planned for the issuance of a Bulgarian PR ID card.
Bulgarian Citizenship Application
After grant of residence, investors simply need to wait for 5 years before applying for citizenship.
Various government bodies, including the State Agency for National Security and the Ministry of Interior participate in the citizenship review process. Two milestones ought to be mentioned:
- the opinion of the Citizenship Council based on which the Minister makes a recommendation to the Vice President and
- the issuance of a decree by the Vice President