Bulgarian foundations have been long the preferred choice for companies and individuals from around the world who were seeking capital protection for their assets. Others, who wanted to perform non-profit activities in Bulgaria, have been registering foundations, clubs and societies in the country in order to streamline their social activities in the EU. Only few know however, that successful registration of Bulgarian foundation, with the explicit permission from the Ministry of Justice, provides the right of legal long term residency in Bulgaria.
The registration of Bulgarian non-profit organization (foundation, etc.), when the applicant intends to apply for residency permit, requires additional procedures and permissions from the state authorities. When this is the case, the legal conformity is of extreme importance, as all documents need to be processed in strict order.
With the amendments of the Bulgarian “Law for the Foreigners” that were enforced on December 6th, 2016, the Parliament took additional measures in order to prevent foreigners, non-EU citizens, to misuse the legal framework in order to obtain easily legal residency in Bulgaria. The most notable change that was made was the tightening of the regime for obtaining of legal residency by means of registering of Trade Representative Office (TRO) by foreign company. The new law now requires that the planned activity of the TRO in Bulgaria is checked properly as well as the tax compliance of the foreign company is successfully evaluated by the Bulgarian authorities. In order for these conditions to be met, the applicant for TRO will need to employ professional lawyer or legal company to prepare all documents and ensure 100% legal compliance. If this is not done, in our opinion, the applicant has minimal chances of success. All this is now attracting additional cost and is making the use of TRO less attractive than it was prior to the Law amendments.
The other change in the law, worth mentioning, is that from now on, when a foreign person is hiring Bulgarian citizens (a minimum of 10 employees required) in order to obtain residency permit, these employees need to be hired full time (8 hours per day). Previously the law didn’t specify anything in this respect and many foreign applicants were hiring locals half/part time in order to save on salaries, taxes and social contributions.
In contrast to the above amendments, the anticipated decrease in the amount of the required investment in real estate properties in order to obtain legal residency in Bulgaria, was withdrawn before the second hearing and did not pass through the Parliament. In other words, the required amount of real estate investments remains at the same level of 600 thousand Bulgarian Leva (307 thousand EUR) instead of being decreased to 100 thousand Bulgarian Leva (51 thousand EUR).
Luckily, there is yet another alternative in the “Law for the Foreigners”. Namely, for people who are devoted to perform non-profit activities in Bulgaria, the law foresees that they can be eligible for long term residency. The condition is that they need to obtain approval by the Ministry of Justice in order to be able to apply for their residence card. The task is not an easy one, but with professional legal help, it is quite feasible. The Bulgarian “Law for the non-profit entities” is very solid and rarely amended legal act and is therefore quite reliable in terms of case law. By registering a foundation in Bulgaria with our legal support, the applicant will not only enjoy an unprecedented level of legal protection (as well as assets protection), but can also benefit from the immigration opportunities this type of entities can offer. Of course, the applicant has to be devoted to perform real non-profit activities in the country in order to comply with the initial plan that will be presented to the Justice Ministry for approval.
Once the foundation is dully registered and the permission from the Ministry obtained, the applicant will need to apply for immigration visa type D from the nearest Bulgarian Embassy. This visa is in general valid for 6 months during which time, the applicant needs visiting Bulgaria in order to apply for and obtain the residency permit. After certain time of legal residence in Bulgaria, the foreigner is eligible for full Bulgarian citizenship and passport.
Bulgarian foundations in general can be divided in two categories: foundations in public and in private interest. The difference is the main goals of the foundation as well as the way it is represented. While the foundations in private interest can be represented and managed by single person, the foundations in public interest need a collective body of minimum 3 representatives. There are also other differences so please don’t hesitate to contact us for any additional information.
As for assets protection, Bulgarian foundations can be the ideal vehicle even for the most sophisticated type of investor. You can read more detail about this aspect of the NGOs in Bulgaria and how can one benefit from the stability of the EU regulations.
If you are convinced that registration of Bulgarian foundation is your optimal option ahead, please contact us for further assistance.