How to get Bulgarian citizenship by investment
Alexander Dobrinov explaining the particularities of the Bulgarian fast-track Citizenship program which requires the applicant for Bulgarian passport to invest 2 million Bulgarian leva into Bulgarian shares, Government bonds or sign for trust bank account with Bulgarian credit institution.
The translated script of the speech in English
Legal residency in Bulgaria, Citizenship by Investment Program. Alexander Dobrinov, Posolstvo EU – Managing Partner. Today. my name is Dobrinov Alexander, representative of Posolstvo EU. I want to immediately say that we are not an Embassy, we do not issue visas. unfortunately .otherwise we would have issued for all of you, immediately. We will be talking about residencies in Bulgaria and European citizenship, how to obtain it. by means of obtaining of Bulgarian citizenship. I was listening yesterday to all my respected colleagues, were telling you very well how you can obtain different types of legal residency in European countries and they were starting from that Where you can live best where is the highest living standard where you can find the best weather .where are the lowest taxes. and so on I would like to stress on what is meant by residency, permanent residency and citizenship. In general you are all aware of the difference, right? I would still like to explain, because we have many customers who ask, who don’t understand what is the difference between residency and citizenship. .residency is something temporary .its is issued for a year. Now they even grant it for 6 months .citizenship, this means citizen of the country. Citizen of Bulgaria is equal to citizen of the European Union.In general, when we talk about citizenship, we don’t see it within the constraints of the Bulgarian territory.or the Bulgarian country. this is European citizenship. Holding Bulgarian passport, you can live in any country of the European Union. If you want in London, if you want in Paris, in Rome, Barcelona.wherever you wish. Therefore, looking at the Bulgarian citizenship as to purely Bulgarian, is not quite right. because it is already EU citizenship, it grants you right of residency.without any permissions, without any formalities.in any country in the European Union. You can live in Cyprus, in Germany, Italy, doesn’t matter, wherever you wish. In Sweden, everywhere. After the (Br)exit of the United Kingdom from the EU, there will be different conditions. But still, the right of every EU citizen to remain in the territory of the UK will remain intact. .without any restrictions. .this is now being discussed and because there will be a reciprocity between the EU and the UK. .it will remain. You don’t have to worry about that. UK, you can see it as member of the European Union, even after its exit. Now. what types of residencies exist in Bulgaria? By law there are. well i will translate literally long term residency and permanent residency. .long term residency is being granted for a period of 1 year and can be prolonged for 5 years after 5 years you get permanent residency, but this is not automatically, you have to submit documents there are plenty of formalities.so in general there is not such a big difference between long term and permanent residency. Obviously. What do you get from the long term residency? Basically, not much. You live in the territory of the country, you can travel to Cyprus, Croatia and Romania. Bulgaria is not in the Schengen area yet, it is expected that it will join by the end of the year, maybe next year. But as of today, this has not happened yet. .so in general you should not consider the residency in Bulgaria as a direct route to Europe This is quite different. So. we move now forward. How can one obtain residency, temporary residency in Bulgaria? Usually, our customers from the countries of the ex-USSR, from Ukraine, from Russia. They usually do it by means of purchasing of real estate. In the law is foreseen, there is such an article, that.that in case of real estate purchase for 600 000 BGN, this is a little bit more than 300 000 EUR.the citizen of a third country – non European, has the right to obtain legal residency for one year It is very often, when a real estate is bought at the sea. There is very beautiful, picturesque. The fact that Bulgaria is beautiful, you all know that. I will be not telling you that. This can be also accomplished by registering of Trade Representative Office. of Ukrainian company for example. This also grants right of residency, temporary residency in Bulgaria. Now in the Parliament, it was approved in first hearing, there is new bill, that some of the conditions .for granting of temporary residency in Bulgaria are changing In particular it is now foreseen, that was approved in first hearing .that the amount, the amount that needs to be invested in real estate. .is decreased from 600 000 BGN to 100 000 BGN, this is approximately just a bit more than 50 000 EUR. this is, this is peanuts, this is very little but unfortunately, now already in the Parliament, there are such. talks, that .that this will be ultimately not approved on that level – 50 000 EUR, but it will be a bit more. How it will look at the end, it is to us unclear yet. And we simply have to wait until the it passes on the second hearing. The second particularity of this bill, which I underline, was approved on first hearing.It is foreseen that for the registration of Trade Representative Office, there will be some conditions. .these conditions, they are. let me call them. quite subjective. and it will be very difficult to fulfill them. So if they adopt this bill the registration of Trade Representative Office will cease to exist as opportunity this legal loophole will not be available anymore. But all that was about residency. I would like to spend some more time about European citizenship. .how to obtain it by means of investments In general, Bulgarian citizenship can be obtained after legally residing in the country for 5 years with permanent residency status. Permanent residency. In other words, if you purchase a house tomorrow for 600 000 BGN. or as it might be by the new law, a bit less.Then you will have to live under the status of temporary residency for 5 years then you will receive, eventually, permanent residency and after another 5 years you will be eligible for citizenship.Then you will have to pass Bulgarian language exam. And the whole process will probably take a bit more than 10 years.maybe 11, maybe 12.This program, for which we will talk in more detail today, it foresees obtaining Bulgarian citizenship.In practice, citizenship of the European Union.in a term of less than 2 years. so in year and a half, 18 months approximately, one can get Bulgarian passport, Bulgarian documents.and right to reside in the whole territory of the European Union. How is this done? This is foreseen in the Law for the Foreigners. and the Law for the Bulgarian Citizenship. the first step. well, lets call him the investor, the one who wishes to use the legal opportunity to obtain citizenship. the first step is the requirement to make an investment of 1 million Bulgarian leva. this is a bit more than 500 000 EUR, half million Euro. now, lets see the slides. so, there are different options about how these money can be invested. .in order to fulfill the requirements of this law. the best option in our opinion is to either purchase shares of Bulgarian companies on the Bulgarian stock exchange.or bonds. The bonds must be issued by the state or the municipality. The investment can be done in a managed bank account under trust agreement. I will tell you a bit later about the particularities of this option. Let’s talk now about shares and bonds. So, the first investment must be in the amount of half a million Euro.You can buy shares or bonds, you can buy both, you can mix them.The amount is not so big actually, if you consider the fact that the Bulgarian Stock Exchange performed really well lately. And the return was a bit higher than the average in Europe. I will now find the chart to show just a second. We will get back to that .I want to tell what else the Bulgarian citizenship provides. In general, it gives freedom. You will no further be restricted by the Schengen. All the procedures, all procedures to obtain visas, they will no longer apply to you. I want to once again, dive into what the Bulgarian passport provides.this is in practice. in fact, what you will be told.German passport, French passport, Bulgarian, Cypriot. its all the same. it’s already the same. You can view that. I wanted to make an inappropriate comparison. like in the USSR.but without formalities, let’s call it like that, i mean freedom, freedom of travel and residency in any country.this is absolutely unrestricted! so, let’s move forward.so, yes, a few words about the (credit) ratings so here, it will be not very interesting for you, but.Investing money in Bulgaria. it is in general a very safe investment I will show you how safe it is and whether all this can be trusted or we should take it with certain apprehension. so this is the rating by Fitch. Where AAA is the highest rating.I will later come back to it Bulgaria, for example together with Hungary have BBB- rating. For example Italy, you see there, has a bit higher BBB+. Well Ukraine, unfortunately now, because of the situation, has fallen a little bit down.and the banks in Bulgaria, where you can invest your money, for example Allianz, a German bank.it has BBB+, on the level of Italy.there I wrote AAA, because in general everybody aims at this however.I wanted to show you that this is also not indicative, and maybe it is not good to stick to it so much because who had AAA rating?. Lehman Brothers had it and what happened with it in 2008, you can all see, so.so AAA, BBB, CCC it is all relative.maybe its not wise to believe the financiers, because such things happen because such thing happens after having such high rating.so. we move forward. because we were talking about numbers.Here you see the Bulgarian index SOFIX, it is formed from the 15 leading companies on the Bulgarian Stock Exchange the red graph, you can seethe upper graph shows the period for the last 5 years.the graph bellow. the last one year.So, what do we see.the red graph is Bulgaria. No! Excuse me I correct myself, the orange graph is the Bulgarian index.and Footsie (FTSE), the red graph, is the index of the United Kingdom the leading companies of England, of the UK.so you can see that the level of the returns is approximately the same so the upper graph is for 5 years, the last 5 years. the lower graph is for 1 year roughly speaking, the graphs go in. lets call it one direction probably up, but you don’t have to believe me about that, because in future nobody knows what will it be. so what do we have more.I wanted to tell more about citizenship. Yesterday I was listening, my respected colleagues.They were constructing very complicated schemes about how can you obtain residency in the west European countries they were even branding the obtaining of citizenship in other countries as a easy citizenship and so on it is not easy. You have to invest more than 1 million Euro.which money, I want to once again stress on that, the money always remains yours they are at all times on your account, nobody can withdraw it.and the money will be then returned, because it is you, its your money this is. we have to make clear distinction between investment and payment this is not a payment. This is investment, which is done in the economy of Bulgaria.Even not in the economy, because from your million Euro lets say so, the economy will not be boosted that much this is simply a way to prove the seriousness of the new citizen you understand. the Bulgarian state gets anyways enough investments on its Stock Exchange and bonds so from this million Euro, it will not get any richer.this is a way. how to explain it so you will understand me correctly.this is a way to prove certain minimum living standard.that will prove that in future there will be no problems with you.obviously the source of the funds will need to be proven.but the procedure is not so complicated as in other European countries. and in particular in the USA. well. what is the beauty of investing on the Stock Exchange?.the investments on the Stock Exchange. usually, people who already have this kind of money.they are already doing that. They go to a Swiss bank.to a UK bank, they pay huge money to maintain these accounts.at the end of the day, they achieve the very same returns.You can see the red graph – the English index, the one of the UK The same you can get on the Bulgarian Stock Exchange. And at the same time they pay huge fees, they pay commissions, they the middlemen, pay the brokers and so on.and they only get that what in general, the Stock Exchange can pay out.In Bulgaria you can do the same. But at much better conditions. And also, at the end of this period.say one and a half years. till two years.you get citizenship. Once again I would like to stress about the citizenship. Citizenship, once you get it, nobody can take it from you.so permanent residency, even though there is a word permanent, it is not really permanent.because all the time, you will be proving.that you comply with these conditions, under which you have received it.This is not the case with the citizenship. There are no requirements that you live in Bulgaria. You can live wherever you want to You can live in Ukraine, you can stay, there is no problem, using this passport only for the purpose to travel worldwide. So, now I want to say a few words about the visas. Here we have a comparison not quite in our favor, but still.it may be interesting to you. The upper graph is the visa-free entry with Bulgarian passport. The lower graph is the visa-free entry with Cypriot passport. Well. the area in blue, you can see for yourself, this is Europe.here obviously there is no difference at all. in which country Where the green is, there is unrestricted visa-free entry.There with the yellow and the grey, you can get either visa on arrival in the airport.that can be counted also like almost visa-free.What is the difference, its instantly evident.this is Canada, right. with Cypriot passport one can travel to Canada.with Bulgarian, it is not yet possible From the New Year, this will be also green on the Bulgarian map.so this will be all the same.moving forward. Well, South America, there is obvious.about Europe I already told.Africa. maybe a small advantage to Cyprus.Asia, maybe a small advantage to Bulgaria.Australia – visa-free obviously, the far east is also visa-free, Japan. and all these countries.your attention should be attracted by the USA, yes, you will have visa regime with the United States about that I would like to say.there exists European directive about reciprocity of visa issuance under the directive, when there is visa-free entry to the European Union for certain country.like for the United States.yes, the Americans are now entering the EU without the need to obtain visa in advance.then the EU, if any country from the EU has visa regime with the USAwell, in this case with the USA. then.then this country has the right to ask the European Commission to apply visa regime to this country in one year time.this works already.so the idea in general, of this directive, is that in future.lets say in maximum 2-3 years from now.the visa regime of the EU countries to third countries worldwide.should be one and the same.What does that mean in practice? That if USA doesn’t cancel the visa regime for the Bulgarian and the Cypriot passports.well there are others as well, for example Croatian.then the European Union has the right.to apply visa regime to the Americans.this will not happen of course, because the whole business well.will crash. it will be very fearful.so there remains only one possibility, that the map of the USA will become green soon. But this is so a bit out of the context.although, may be interesting.So.What else did I want to tell.the next slide.Here we had an exhibition in Qatar, there the authorities told us that it would be better.Better to speak about taxes than about something else so we put there. we hid a little.The tax rate in Bulgaria. is 10%.This is personal tax – 10% and corporate tax is 10%.This is the lowest in the EU. On the second place is, I think Cyprus with 12,5%this may be also interesting for you.if you become tax resident of Bulgaria, you will be paying a fixed tax rate of 10%.The tax regime is quite simple.the documents its quite easy and straightforward to do once per year a declaration is submitted, if there is something to be paid.if there is nothing to be paid, the declaration can be not submitted in principle so.well. I want to go back.now, once more.we will fight with the technology.so, what I want to say.There are many agents who offer assistance to obtain citizenship, to obtain legal residency.I wanted to say, that it is better to do that through legal offices.as we are.and doing so, that certainly everything with you to be successful.The same as people look to buy property from the developer.that is why we wrote so.It is better to get these services from a lawyer, because.these are people who know what they are doing.and the success rate is in practice almost 100%.if someone will be telling you lies that he will do everything and everything will be alright.then nothing happens, you should try to avoid that.this is just so, also not quite on the topic.I just want tot tell few more words I will rewind. yes. About the investments.What is the advantage of this option? If for example you invest half of your money in shares and half of your money in bonds.it is in principle so, on the financial markets.when the shares rise, the bonds fall.so this is a very interesting option.in this way you will not only get a good return, but will also most probably preserve your capital.so at the end of this period, to call it like that.one and a half years you will get your investment in full plus some interests.I wanted to tell more, because I forgot.There is a third option, very interesting, you can invest the money under management in Bulgarian financial institution.What does a Bulgarian financial institution mean? These are banks and other financial institutions, such as brokers, they have licenses.to perform financial operations.but there the law. foresees that the investment must be.the investment must remain under management for a period of not less than 5 years.not less than 5 years means that you will get citizenship in 2 years, but the money you can take out after 3 more years after that.but.but the beauty of this option is that under management you can practically buy everything.you can buy real estate, you can simply keep the money on the account.for certain interest, although you know now the interest is almost zero.But this is also an interesting possibility, and.and we recommend to our customers to make use of it frankly speaking.about half of our customers choose this option.because it is very convenient, you can agree with the bank and buy virtually everything.you can even buy Ukrainian shares or bonds if you want to I guess we have 5 more minutes? yes. and if you have any questions, ask.I will answer with pleasure. QUESTION: Is it possible to make the investment in favor of a child, for a study, so he can study later? So, this can be done in a different way.much better.Becoming citizen of Bulgaria yes?Your children also get the right (of citizenship). so for them there are no investments necessary.Immediately after the receipt of your passport, the child has the right.because his parent is a citizen of the European Union in particular of Bulgaria.So he undergoes standard procedure, not related in any way with any investments.and obtains citizenship very swiftly. What I also wanted to tell. before you ask the next question.that the investment program for obtaining citizenship of Bulgaria. doesn’t require you to abstain from your other citizenship, if you have one.so in principle, if say, you have Ukrainian citizenship.you can simply keep it.this is very convenient.QUESTION: The thing is that in Ukraine there is no double citizenship Well this is already your. yes. I understand. fine.We will work on that.we wont tell anybody yes, it is possible. No problems Yes.Yes, absolutely.QUESTION: If we obtain Bulgarian citizenship and then want to get German citizenship, will that be easier?It wont be easier.But I want to ask you back. why would you need German citizenship if you have Bulgarian citizenship? It wont be easier.It wont be easier, because there is no point in it. you understand The European legislation doesn’t foresee that. this program of which I am talking, it concerns only non European citizens.you understand, the Bulgarian citizenship is in practice already equalized to the German citizenship.its the same, you understand if you want to say.if your only option to obtain citizenship. if lets say, now, I am citizen of Bulgaria I want to obtain citizenship of Germany the only practical option is to have German roots. yes.you. do you. you probably don have them.or yes, it wont be easier. but I ask you again, why do you need that? .here the woman said that because its an EU country.but Bulgaria is also an European country. its also European Union. yes. yes. Ok, I will answer that.It will be easier for you. Why? Because in order to live in the territory of Germany, you.you don’t need anything. With the Bulgarian passport, you simply go there and reside.in such way. i don’t know the German legislation.if after 5 years they give you citizenship, then you will simply get it after 5 years.it will be easier, because these 5 years, you will simply.you will be residing there, yes you don’t need anything. If you now from Ukraine. want to live in Germany, this is. this is very complicated, very difficult, will be expensive.to do. Right? Did I answer? more or less More questions? No questions? So everything is clear, yes? Thank you very much for your attention.That you have come. and if there are any specific questions.we will be today at the conference, please ask. We will be happy to respond, ok? QUESTION: Is that your telephone on the slide? Sorry? once again? Yes, this is my telephone, yes. So you can call. Thank you too. Thank you!