Pre-approval Process and Source of Funds for Citizenship by Investment

16th July 2021

Citizenship by Investment, For private clients, Citizenship and Immigration

The pre-approval or pre-clearance process carried out by the Bulgarian Investment Agency (“BIA”) was newly introduced by legislation in March 2021 and is currently subject to refinement by means of secondary legislation and internal rules by the BIA.

Its purpose is to give assurance about the legitimacy of investors, including their compliance with anti money laundering (“AML”) law and thus also assure investors about the long term health of the programme and the quality of their fellow applicants.

Applications for Pre-approval Process

As of this stage, contrary to comments made by service providers, the BIA does accept applications for pre-approval.

New Balkans Law Office has actively liaised with the BIA and the relevant authorities including by helping draft secondary legislation at a working group organised by the Ministry of Finance.

Supporting Documents

For the pre-approval the following information might be required by the BIA:

  • Proof of identity and proof of address;
  • Sufficient funds for making the minimum investment required;
  • Clear source of funds information;
  • Information if the applicant is a PEP;
  • Information on the vocational/business/professional background of the applicant;
  • A Criminal Record Check from the country of origin or country of permanent residence.

The BIA reserves its right to request additional information and documents from the applicants.

Source of Funds

The part that most applicants would consider burdensome is providing documentary evidence for their source of funds.

It is important to note that unlike other programmes, the pre-approval (aka pre-clearance) process of the Bulgaria citizenship by investment programme focuses on the source of funds for the investment as opposed to the source of wealth of the applicant. Thus reducing the administrative burden significantly.

Since applicants may have a myriad different sources of funds, each case needs to be reviewed independently so as to avoid problems with the pre-approval application or refusal by the BIA.

Possible Sources of Funds

While this may not be an exhaustive list, here are some of the most common sources of funds that may be used.

  1. Employment income
  2. Consultancy income
  3. Savings/Deposits
  4. Property sale
  5. Sale of shares or other financial instruments
  6. Loans
  7. Company or business sale
  8. Distribution of company profits/Dividends
  9. Inheritance
  10. Gift
  11. Cryptocurrency income

The documents and information needed to be presented for each different source of funds varies and a professional advisor will need to be consulted.

For example, if your immediate source of funds is employment income (salary), you will need to provide information about: 1) the nature of employer’s business; 2) the name and registered address of your employer; and 3) your cumulative annual salary, bonuses and any other employment-related income covering the investment amount. The exact documents you may need to procure may include: 1) Latest accounts or tax declaration if self employed; and 2) Confirmation from the employer of annual salary.

NBLO has extensive knowledge in the field of AML and our compliance department is headed by Ms Maya Ivanova, formerly of the State Agency for National Security, where she investigated financial crimes.

Timeline

At this stage, there is no fixed timeline for the pre-approval (aka pre-clearance) process. We expect that such a process will take about a month. Applicants who have filed their applications for pre-approval can in parallel start the process of onboarding by the Fund Manager that they have chosen.

NBLO – Your Bulgarian Citizenship Lawyers

New Balkans Law Office is a boutique law firm with a strong practice in Bulgarian and EU immigration and nationality law. We deal extensively with applications for citizenship including Bulgarian citizenship by investment, Bulgarian citizenship by origin and Bulgarian citizenship by residence, settlement of family members of EU/Bulgarian citizens, and other citizenship and immigration related matters.

We have helped a number of high-net-worth individuals in obtaining Bulgarian citizenship by investment and today our clients are 100% successful.

For more information, please contact us at: [email protected] or via our contact form.