BULGARIA Law and Practice Contributed by: Nikolay Zisov, Svetlina Kortenska, Deyan Terziev and Teodora Peycheva, BOYANOV & Co.
It is possible simultaneously with the incorporation of the new company to also have it registered for VAT purposes as the simplest and fastest way to get a VAT registration. The entire process for the establishment of a company in practice can take between one and two months to complete, where the most time-consuming step is usually the opening of a bank account due to the very strict KYC/AML procedures and requirements applied by Bulgarian banks. Additional legal requirements may arise for entities that will operate in highly regulated sectors such as banking, gambling or electronic communications. Depending on the relevant industry, the regulator, the legal procedure and the applicable deadlines will vary. The applicability of the respective regulatory require- ments should be analysed on a case-by-case basis. 7.2 Primary Securities Market Regulators The primary securities market regulator in Bulgaria is the Financial Supervision Commission. 7.3 Restrictions on Foreign Investments In March 2024, Bulgaria introduced a general approval regime of foreign investments in line with the require- ments under Regulation (EU) 2019/452 of the Euro- pean Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (the “FDI Regula- tion”). By virtue of amendments in the Investment Promotion Act, the regime requires prior review and approval on national security grounds for foreign direct investments (FDIs) in certain key areas of interest for national security purposes. The approval regime was originally expected to enter into full force in Bulgaria no later than September 2024. However, it was not until July 2025 that the Council of Ministers adopted the necessary secondary legislation and Bulgaria’s FDI screening regime became fully operational. The approval regime requires FDIs in the fields of activity listed in Article 4 (1) of the EU FDI Regulation that trigger the threshold of EUR2 million or target at least 10% of the share capital to be notified and cleared in advance by a special Interdepartmental Council on FDI Screening.
Investments by investors having non-EU government (public) shareholding or participation are notifiable, even when below the investment thresholds, except for some low-risk countries enjoying preferential treatment (eg, the United States, the United King- dom, Canada, Australia and others). A requirement for a minimum 5% non-EU government participation applies to a listed investor (a public company listed on a regulated market) for the application of this below- threshold notification obligation. The FDI must involve the fields of activity listed in Arti- cle 4 (1) of the EU FDI Regulation and/or be aimed at a target engaged in hi-tech activities. The specific sectors listed in Article 4 (1) (energy, transport, water, health, communications, media, etc) are indicative but not exhaustive, and the FDIs need to have a potential effect on factors including the following: • critical infrastructure; • critical technologies and dual-use items; • supply of critical inputs, including energy, raw materials and food security; In addition, FDIs by Russian and Belorussian inves- tors, as well as investments in petroleum, petroleum- based products, activities, undertakings or capital of entities forming part of the critical infrastructure, are explicitly caught by the local approval regime, irre- spective of the common thresholds. These invest- ments are subject to mandatory prior notification and approval when they trigger the common threshold of EUR2 million or 10% of the capital of the target. How- ever, investments by Russian and Belorussian inves- tors, as well as investments in petroleum, petroleum- based products, activities, undertakings or capital of entities forming part of the critical infrastructure, may still be subject to review at the initiative of the authorities (ex officio review), including after complet- ing the investment (ex post review), even where they have not triggered the notification obligation, either because they are below the thresholds or because they were completed before the notification obligation came into effect. • access to sensitive information; and • freedom and pluralism of the media.
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