Bulgaria President to Veto Provisions of Investment Promotion Act
President Rosen Plevneliev will return to Parliament for further review transitional and final provisions of the Investment Promotion Act introducing changes to the Foreigners in the Republic of Bulgaria Act and the Bulgarian Citizenship Act.
The legal changes entitle foreign nationals to Bulgarian citizenship after investing a certain amount of money in the Bulgarian economy.
The amendments to the Investment Promotion Act are yet to be reviewed by the Council of Legal Advisors to the President, who will examine the law in its entirety and prepare motives which will be presented next week, according to a media statement of the President's Office.
According to Plevneliev, the amendments introduced between first and second reading are expected to encourage investments in Bulgaria, but they actually have the opposite effect.
Bulgaria's head of state believes that the newly adopted provisions of the Foreigners Act create extra obstructions for foreign investors by introducing unnecessarily heightened requirements for granting a permanent residence permit.
Plevneliev specifies that he means the provisions requiring investors to have contributed no less than BGN 4 M to the capital of a Bulgarian commercial entity in their capacity as associates or shareholders with registered shares, owning 50% of the capital of the company, as a result of which, investments of no less than BGN 4 M were made and no less than 50 jobs were created for Bulgarian nationals.
Bulgaria's President emphasizes that other EU Member States such as Ireland, Greece, Estonia, and Germany, have substantially lower requirements for granting long-term or permanent residence.
Plevneliev further notes that the instrument is used on a global scale to encourage investments in poor regions and regions with high unemployment, adding that Bulgaria is home to three of the poorest EU regions.
He also points out that the new requirements contradict other legal provisions.
To illustrate his point, he says that on the one hand the law envisages an opportunity for granting a permanent residence permit after BGN 1 M placed at a Bulgarian credit institution under a fiduciary management contract, while at the same time the requirements for an actual investment are BGN 4 M and 50 new jobs.
Plevneliev argues that increasing requirements for foreign investors seeking to obtain a permanent residence permit do not correspond to the interests of the country and the priorities in the sphere outlined by the President and the government.
Bulgaria's head of state further draws attention to the newly adopted Art. 14 of the Bulgarian Citizenship Act which stipulates a simplified naturalization procedure for foreign nationals after one year of permanent residents and investments of no less than BGN 1 M in a Bulgarian commercial entity which implements a priority investment projects certified under the Investment Promotion Act.
Plevneliev claims that this approach does not take into account the essence of citizenship as a political and legal relationship of the person with the state.
"This relationship is stable and durable and it entails a number of rights and obligations. What is more, Bulgarian citizenship now also means EU citizenship. The decision whether to grant citizenship or not cannot be based on financial arguments. This is a different institute, it is not of the same nature as the right to visit a country or stay in a country, and it is wrong to use the same model as in residence," Bulgaria's President explains.
He reminds that Art. 16 of the Bulgarian Citizenship Act stipulates the opportunity for obtaining citizenship under a simplified procedure in the case of an outstanding contribution to Bulgaria in the sphere of economy.
"This gives enough guarantees that this instrument can be used to encourage investors, but it also gives the opportunity for a concrete estimation of the benefit for the state without setting a binding quantity parameter," Plevneliev says.
Bulgaria's head of state concludes that it is better that the amendments are returned to Parliament for further discussion.
- » Moody’s: Bulgaria Credit Rating with Stable Outlook
- » Bulgaria's External Debt Lowest as of Decade
- » Total Turnover Index in Transportation and Storage Sector up 2.4% in Q1 2017
- » International Monetary Fund: ‘Bulgaria Needs Further Banking Supervision Strengthening’
- » Accession to Eurozone Remains Top Priority for Bulgaria
- » Bulgaria Will Work to Attract More Italian Investors