Proposed amendments to the Bulgarian CBI-programme: less options, higher thresholds

In January 2019, it was announced that Bulgaria aims to end its citizenship by investment programme. Two months later, on 22 March 2019, a bill with a much less drastic effect was proposed, yet it could nevertheless significantly restrict the Bulgarian programme.

The most important change that the bill proposes is the abolition of the fast track route to citizenship for regular investors. Under the current regulations, a permanent Bulgarian residence permit can be obtained in exchange for an investment of 1,000,000 lev (approx. 510,000 euro). There are currently six investment options in place, of which an investment in Bulgarian government bonds has turned out to be a popular one. The investor can obtain Bulgarian citizenship after holding permanent residence status for a period of five years under the regular requirements, although he is exempted from the Bulgarian language requirement and does not have to renounce his nationality of origin. However, if an investor doubles his investment to 2,000,000 lev, he can be eligible for the fast track option, which entails that he can be naturalized after just one year of holding permanent residence status. Under the proposed amendments, this investor would no longer be eligible for the fast track procedure. The investor will remain eligible for naturalization after the regular period of five years, but will no longer be exempted from the Bulgarian language requirement or the renunciation requirement.

The question remains why the fast track route to citizenship has been restricted in this way. According to the explanatory memorandum of the bill, it has in practice turned out that the investments have often not been maintained at an adequate level and that the added value of the regulation is therefore questionable.

If the proposed bill is accepted, two alternative routes will remain in place for an investor who wishes to obtain Bulgarian citizenship at greater speed. Firstly, an investor who invests at least 1,000,000 lev in a project that is approved under the Bulgarian Investment Promotion Act will remain eligible for the fast track procedure and the language- and renunciation exemptions discussed above. Secondly, particularly affluent individuals can be naturalized in Bulgaria on the basis of (not further specified) “special contributions […] in the public and economic sphere or in the sphere of science, technology, culture and sport”. In the past, several entrepreneurs who established businesses in Bulgaria have been able to acquire Bulgarian citizenship on the basis of this provision. These persons receive a particularly privileged treatment, as they are exempted from all the conditions set by the Bulgarian Citizenship Act.

All in all, the bill would restrict the requirements for obtaining Bulgarian citizenship. Nevertheless, the two remaining options might better ensure that Bulgaria’s citizenship by investment programme remains of added value for investors as well as for the country itself.

Author: Luuk van der Baaren