BULGARIA Law and Practice Contributed by: George Chisuse, Ivelin Vassilev, Stephany Valcheva and Daniel Kolev, VC Law
A foreign structure will not necessarily avoid Bulgar- ian or EU licensing issues if the business is effec- tively managed, marketed or operated from Bulgaria, or if Bulgarian/EU clients are actively targeted. For example, an offshore company with its management team, client onboarding, marketing and operational decision-making in Bulgaria may still raise Bulgarian and EU regulatory questions. Existing providers may benefit from transitional arrangements if they were lawfully providing crypto- asset services before the relevant MiCA application date, but this is only a temporary position. The transi- tion from the previous registration-based regime to full CASP licensing is expected to end on 1 July 2026. Businesses relying on the transitional period should not treat it as equivalent to full authorisation. They should use it to prepare the CASP application, align internal policies and controls, review marketing and cross-border activity, and prepare an orderly exit plan A CASP licence is obtained through an application to the FSC under MiCA, the Bulgarian Markets in Crypto- Assets Act and the FSC’s implementing rules, and the process resembles a financial-services authorisation. The applicant must submit a detailed licensing file showing what services it intends to provide, explain in detail how the business will operate, who will manage it, how clients and client assets will be protected, and how the firm will comply with AML, DORA, govern- ance and conduct requirements. Substance is a key point. The FSC is expected to look at whether the applicant has real operational pres- ence and decision-making capacity in Bulgaria. The exact level of substance will depend on the services offered, but the applicant should have sufficient local management, compliance oversight and operational control. Some functions may be outsourced or sup- ported by group entities, but the Bulgarian applicant must remain responsible and able to supervise them effectively. if authorisation is not obtained. 3.2 Set-Up Requirements Local personnel requirements are not assessed through a fixed headcount only. The more important question is whether the team is adequate for the pro-
posed activity. A custody provider or trading platform will need stronger operational, compliance, AML, ICT and risk capacity than a more limited advisory model. Members of the management body and key persons must be suitable, reliable and sufficiently experienced. In practice, the FSC will expect the people named in the application to be genuinely involved, not appoint- ed only for formal purposes. CASPs must also meet MiCA prudential requirements. Depending on the services provided, the minimum capital requirement is EUR50,000, EUR125,000 or EUR150,000, depending on the exact services, and the CASP must maintain prudential safeguards equal to the higher of the fixed minimum requirement or one quarter of its previous year’s fixed overheads. For new applicants, the business plan and financial forecasts therefore need to be realistic and consistent with the proposed operating model. In practical terms, the most important part of the licensing process is preparation. Before filing, appli- cants should usually carry out a gap review of their governance, AML framework, DORA arrangements, custody model, outsourcing structure, client docu- mentation and financial resources. A well-prepared application can reduce follow-up questions and delays, while an incomplete or generic file is likely to create difficulties during the FSC review. 3.3 Change of Control Acquiring control or a significant holding in a licensed CASP in Bulgaria is subject to prior regulatory noti- fication and assessment. A proposed acquirer must notify the FSC before acquiring, directly or indirectly, a qualifying holding in a CASP, or before increasing an existing holding above the relevant MiCA thresh- olds. The transaction should not be completed until the regulatory process has been properly addressed. The assessment is not a general commercial approval of the deal. The FSC will focus on whether the pro- posed acquirer is suitable, financially sound and transparent, whether the source of funds is legitimate, whether the persons who will direct the CASP’s busi- ness are fit and proper, and whether the CASP will continue to comply with MiCA after the acquisition. AML/CFT risk is also a central part of the review.
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