Statement by Citizenship and Investments Ltd to the Bulgarian National Assembly

Our position on the bill introducing a requirement for permanent residence permit holders to stay in Bulgaria for 6 months and 1 day

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You can read the full text of our position on the National Assembly’s website, as well as below:

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TO:
COMMITTEE ON INTERNAL SECURITY AND PUBLIC ORDER
NATIONAL ASSEMBLY OF THE REPUBLIC OF BULGARIA

FROM:
CITIZENSHIP AND INVESTMENTS LTD.
103 James Bourchier Blvd., Office 9, 1407 Sofia
Email: [email protected]
AND
Alexander Pavlov Dobrinov

POSITION STATEMENT

Subject: Bill amending and supplementing the Foreigners in the Republic of Bulgaria Act, No. 52-602-01-29, submitted by the Council of Ministers on 28 July 2026 – § 17, item 2 (new item 24 of Article 40(1) of the Foreigners in the Republic of Bulgaria Act)

DEAR MEMBERS OF THE COMMITTEE,

With regard to the bill amending and supplementing the Foreigners in the Republic of Bulgaria Act (reference No. 52-602-01-29), we express our opposition to the proposed addition of item 24 to Article 40(1) of the Act, as set out in § 17, item 2 of the bill. We propose that this provision not be supported during the subsequent consideration of the bill.

We believe that the proposed requirement for foreign nationals holding permanent residence permits to be physically present in Bulgaria for at least 6 months and 1 day each year raises four significant legal concerns:

• There is no substantiated link between the stated legislative objective, as set out in the sponsor’s explanatory memorandum, and the proposed measure;
• The proposal may be inconsistent with the principles of European Union law;
• The proposal may conflict with the Constitution of the Republic of Bulgaria;
• The proposal creates a risk of significant adverse consequences for the persons concerned, the investment environment, and Bulgaria’s demographic interests.

No substantiated link between the objectives stated in the bill’s explanatory memorandum and the proposed measure

The explanatory memorandum accompanying the bill identifies its objective as ensuring “stricter control over the residence of foreign nationals authorised to reside permanently in Bulgaria”.

The proposed measure may be counterproductive

The proposed requirement to be physically present in the country for at least 6 months and 1 day each year does not demonstrate that administrative control will become more effective or stringent. The length of physical presence is not equivalent to the effectiveness of oversight. On the contrary, such a requirement may merely create additional administrative burdens, without any indication that it would improve monitoring and enforcement. The bill’s sponsor has not provided any specific justification explaining how the proposed measure would help achieve the stated objective.

We therefore ask how, exactly, the sponsor expects “stricter control over the residence of foreign nationals authorised to reside permanently in the Republic of Bulgaria” to be achieved simply by requiring them to be physically present in the country for more than 6 months and 1 day. Is it envisaged that foreign nationals will be visited regularly by the Ministry of Interior and other administrative authorities for inspections and checks? The sponsor should specify precisely what control measures would be implemented as a result of foreign nationals spending more time in the country.

In the absence of such justification, the proposed measure appears disproportionate and potentially counterproductive in relation to its stated objective. Rather than achieving the sponsor’s stated aim, the requirement for longer physical presence in Bulgaria is likely to produce the opposite result: unnecessary administrative burdens instead of genuinely effective oversight.

Inconsistency with European Union law

In its judgment of 29 April 2025 in Case C-181/23, Commission v Malta, the Court of Justice of the European Union held that a Member State cannot establish a naturalisation scheme that effectively turns the acquisition of its nationality, and consequently EU citizenship, into a commercial transaction in exchange for predetermined payments or investments.

Disproportionality

In the present case, the proposed requirement for actual residence in Bulgaria for at least 6 months and 1 day raises questions about the proportionality of the additional burden imposed on foreign nationals as a condition for retaining permanent residence status. This issue is particularly significant because, under Article 12(1)(2) of the Bulgarian Citizenship Act, holding permanent or long-term residence status for at least five years is one of the requirements for naturalisation under the general procedure. Article 13 provides for less stringent conditions for certain categories of applicants, including persons legally married to Bulgarian citizens.

Compulsory tax residency

The proposed requirement to be physically present in Bulgaria for more than 6 months and 1 day each year is highly likely to result in the person being treated as a Bulgarian tax resident under Article 4(1)(2) of the Personal Income Tax Act. Under Article 6 of that Act, “resident individuals are liable for tax on income acquired from sources in the Republic of Bulgaria and abroad”.

Consequently, the condition for retaining permanent residence status — which is the most common legal status held by foreign nationals before they apply for Bulgarian citizenship — effectively places foreign nationals in a position where they may need to accept Bulgarian tax residency and the resulting obligations in order to retain their permanent residence status. That status may subsequently serve as a basis for applying for Bulgarian citizenship.

This does not mean that tax residency acquired solely to retain permanent residence status automatically constitutes a payment for citizenship, or that the judgment in the Malta case directly prohibits such a requirement. However, the judgment highlights the need to carefully assess measures that may create a significant financial burden in connection with retaining a status relevant to the subsequent acquisition of citizenship of a Member State.

Potential conflict with the Constitution of the Republic of Bulgaria

The proposal raises serious concerns under Article 4(1) of the Constitution, which establishes that the Republic of Bulgaria is a state governed by the rule of law. This principle requires legislative restrictions to pursue a clear and legitimate objective, to be justified, and not to go beyond what is necessary to achieve that objective.

Changes to tax status without a prior impact assessment

Where a condition for retaining permanent residence is highly likely to change a person’s tax status and expand the range of income subject to taxation, the legislator should assess these consequences and justify the necessity of the measure. If such a burden is introduced without a sufficiently substantiated link to the objective of stricter control, questions arise as to its compatibility with the rule-of-law principle and the requirement of proportionality.

Article 60(1) and (2) of the Constitution must also be taken into account. These provisions govern the obligation to pay taxes and fees in accordance with income and property, and stipulate that tax reliefs and additional tax burdens may be established only by law. Although tax residency arises under the Personal Income Tax Act, rather than directly under the Foreigners in the Republic of Bulgaria Act, the legislator should take into account the foreseeable tax consequences of the proposed restriction. It is necessary to assess whether the measure would impose a substantial additional burden without its necessity and proportionality having been established.

Reference to these constitutional provisions does not mean that tax residency acquired solely for the purpose of retaining permanent residence status is, in itself, unconstitutional. The question at this stage is whether the legislator may impose such a restrictive condition for retaining permanent residence without demonstrating its necessity and proportionality and without assessing its foreseeable consequences.

For these reasons, we believe that the proposal gives rise to legitimate doubts as to its compatibility with the constitutional principle of the rule of law.

Excessive restrictions and adverse demographic and economic consequences

The proposed requirement to be physically present in Bulgaria for at least 6 months and 1 day each year constitutes an exceptionally restrictive condition for retaining a permanent residence permit. To the best of our knowledge, no comparable general requirement with such a broad scope exists in other European Union Member States. By way of comparison, Article 9 of Council Directive 2003/109/EC of 25 November 2003 provides that a third-country national loses long-term resident status following “an absence from the territory of the Community for a period of 12 consecutive months”. The difference between these two conditions is fundamental, both in nature and in legal consequences: one permits an absence from the territory of the Community for up to 12 consecutive months, while the other requires actual physical presence in Bulgaria for at least 6 months and 1 day each year. The two requirements are not meaningfully comparable.

In practice, if this amendment is adopted, it would entirely undermine the purpose of permanent residence in Bulgaria. Foreign nationals would instead opt for a lower level of residence status, namely prolonged residence under Article 24(1)(5) of the Foreigners in the Republic of Bulgaria Act.

Loss of investment and serious difficulties for families comprising Bulgarian and foreign nationals

In practice, the measure creates a serious risk that permanent residence permits will be lost by people who maintain lasting family, professional, or economic ties with Bulgaria but are unable, for objective reasons, to be physically present in the country for more than half the year. Those potentially affected include family members of Bulgarian citizens, investors, and other individuals who contribute to the country’s economic and social life.

Furthermore, the risk of losing permanent residence status and the associated consequences may discourage these individuals from continuing to establish themselves in Bulgaria or from subsequently applying for Bulgarian citizenship, including under the general procedure and the applicable facilitated conditions for spouses of Bulgarian citizens. This could make Bulgaria less attractive as a country for long-term settlement, investment, and the establishment of family ties.

Demographic concerns

This potential outcome should also be considered in the context of Bulgaria’s unfavourable demographic trends. Against a backdrop of negative natural population growth, Bulgaria should carefully assess the consequences of measures that may discourage people with lasting ties to the country from remaining here. These include families, skilled individuals, and investors. It cannot be assumed that restricting the ability to retain permanent residence status will have no adverse effect on future naturalisation applications or on Bulgaria’s long-term attractiveness.

A legislative measure with such significant consequences should not be adopted without assessing the number of potentially affected individuals, the risk of losing an acquired legal status, the impact on naturalisation procedures, and the possible economic and demographic effects. In the absence of such an assessment, it has not been demonstrated that the expected benefits of the restriction justify the burden it imposes.

Conclusion

In light of the above, we propose that the requirement to be physically present in Bulgaria for at least 6 months and 1 day each year be removed in its entirety.

The measure is not adequately justified in light of the stated objective of stricter administrative control. It may have significant consequences for the tax status of the individuals concerned, raises questions under European Union law and constitutional principles, and creates a risk of adverse consequences for families, investment, naturalisation, and Bulgaria’s demographic interests.

We call on the National Assembly not to adopt a restriction with such significant legal, financial, and social consequences when its necessity, proportionality, and expected impact have not been adequately substantiated.

Attorney-at-law Hristo Vasilev:                                          Alexander Pavlov Dobrinov: