Foreign Direct Investment

Bulgaria

  • 15/10/2020
  • Jurisdictions

Bulgaria does not have an FDI screening mechanism in place and there are no general restrictions on the acquisition of an existing business or new investments by foreign entities. However, Bulgaria restricts foreign ownership of agricultural land and investments by offshore companies in specific sectors:

Restrictions on offshore companies

The Bulgaria Offshore Companies Act prohibits entities registered in tax havens and entities under their control from engaging (directly or indirectly) in 27 economic activities. These include prohibitions in obtaining licences and the operation of credit, insurance or social security company activities, participating in a procedure for the selection of concessionaires, or award of concessions for the extraction of underground natural resources, participation in public procurement or privatisation, acquisition of State or municipal property through sale or exchange, water and energy supply, waste management, and publication of periodicals. There are eight exceptions to these restrictions which must be registered in the Commercial Register.

Restrictions on ownership of agricultural land

Bulgarian law prohibits foreign ownership of agricultural land. Companies that are directly or indirectly owned by entities registered in tax havens, political organisations and foreign states are prohibited from acquiring agricultural land. The ownership prohibition was to be removed for EU/EEA citizens effective 2014 following Bulgaria’s accession to the EU. However, Bulgaria modified its laws introducing long-term residence/registration requirements (five years) as criteria for ownership prompting the European Commission to commence infringement proceedings it.

Legislative developments

There is no publicly available information on any legislative bills on FDI screening under consideration by the Bulgarian parliament.

 

The above information is a summary that does not constitute legal advice. For exhaustive information, advice, and assistance please get in touch with our lawyers.