BULGARIA Law and Practice Contributed by: Nikolay Zisov, Svetlina Kortenska, Deyan Terziev and Teodora Peycheva, BOYANOV & Co
The approval regime requires FDIs in the fields of activity listed in Article 4(1) of the EU FDI Regu- lation 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 gov- ernment (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 Kingdom, Canada, Australia and others). The preferential treatment of the low-risk coun- tries is expected to be further regulated in the upcoming secondary legislation. A requirement for a minimum 5% non-EU government par- ticipation 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 Article 4(1) of the EU FDI Regulation and/or be aimed at a target engaged in hi-tech activi- ties. The specific sectors listed in Article 4(1) (energy, transport, water, health, communica- tions, media, etc) are indicative but not exhaus- tive, and the FDIs need to have a potential effect on the critical infrastructure; critical technologies and dual-use items; supply of critical inputs, including energy or raw materials; as well as food security; access to sensitive information; and the freedom and pluralism of the media. The sectors affected by the local approval regime are expected to be further specified in the antici- pated secondary legislation. In addition, FDIs by Russian and Belorussian investors, as well as investments in petroleum and petroleum-based products concerning crit-
ical infrastructure, are explicitly caught by the local approval regime, irrespective of the com- mon thresholds. These investments 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. However, investments by Russian and Belorus- sian investors, as well as investments in petrole- um and petroleum-based products, may still be subject to review at the initiative of the authori- ties (ex-officio review), including after complet- ing the investment (ex-post review), even where they have not triggered the notification obliga- tion, either because they are below the thresh- olds, or because they were completed before the notification obligation came into effect (the notification obligation will start to apply after the adoption of the secondary regulation on FDI screening). In exceptional cases, the authority also has ex- post screening powers to review other FDIs on national security grounds, irrespective of their value and field of activity. In addition to the general approval regime, cer- tain sector-specific restrictions apply to foreign investments of offshore companies from tax havens, as well as FDIs in the gambling industry and in the acquisition of farmland, but they are rather limited in scope and effect. 7.4 National Security Review/Export Control Other than the FDI screening process outlined in 7.3 Restrictions on Foreign Investments , there are no additional rules on national security review. Export control rules in Bulgaria are in line with the EU export control legal framework. Export/
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