The Bulgarian investment promotion law – let the witch hunt begin…

On March 8th, 2024, the new amendments to the Investment promotion law were officially published in the Bulgarian State Gazette. And to be honest, we are very seriously concerned as to where the Bulgarian politicians are leading us to.

The investment promotion law is now being transformed into a perverse mixture between noble beginning and evil end. And for a first time ever, for as far as we know, citizens of specific countries are explicitly referenced in Bulgarian law. From now on, officially, all Russian and Belarusian citizens will be “screened” if they want to invest in Bulgaria

It’s a perfect night for burning witches.Sarah Henning

“Screening” in the past

Heinrich Himmler made all SS candidates to undergo a racial screening and forbid any German who had Slavic, Negroid or Jewish racial features from the joining the Schutzstaffel (SS).[Wikipedia, Longerich 2011, p. 599.]

From promoting to screening of foreign investments

The Bulgarian investment promotion law, as its name suggests, was created to promote investing in Bulgaria. The idea of the law was to assist foreign investors with their activities in the country. This was until now. The amendments, published on 08.03.2024, have practically killed the core idea of “investment promotion”. Instead, the new texts gave birth to a demonic legal creature, aiming to chase down and ban those who are not to the liking of the authorities. And as you might have guessed, Russian and Belarusian citizens are subjected to a special “attention” in the law.

But what is it all about? What exactly are the amendments of the Bulgarian investment promotion law? What is changing from March 2024 and what does it have to do with Russian and Belarusian citizens? We will try to explain below.

Russian investments in Bulgaria under the radar

The (ultra) controversial amendments to the Bulgarian investment promotion law

Alongside with some other amendments, the most interesting part of the legal changes of 2024 is the introduction of the so-called “screening of direct foreign investments”. The new chapter in the law is actually called:


Now, even though the law is intended to promote investments, the new chapter is made to ban certain foreigners from investing in Bulgaria. The new legal texts basically state the following:

  • Direct foreign investment can be done only after a specific permission from the authorities, if the investment is for more than 2 000 000 EUR;
  • Even if the foreign investment is for less than 2 000 000 EUR, it can be subject to control and permission by the authorities;
  • All investments in oil and products of oil are subject to screening;
  • All direct foreign investments by investors from Russia and Belorussia are subject to screening;
  • Many other investors will be also screened, such as investors who are owned by a non-EU government, etc.

As the terms “direct foreign investment”, “foreign investor” and “screening” are used, we will have to dig deeper into the law as to comprehend what they exactly mean.

Direct foreign investments

The new amendments include a detailed, yet absolutely unclear, subject to interpretation definition of a “direct foreign investment”:

  • ” Direct foreign investment ” means an investment of any kind by a foreign investor which has as its purpose the establishment or maintenance of lasting and direct links between the foreign investor and the entrepreneur or enterprise to whom or which the capital is made available to carry on business in Bulgaria, including an investment which enables effective participation in the management or control of a company carrying on business. A foreign direct investment is also the expansion of an existing investment, including the expansion of the capacity of an existing enterprise, the diversification of the production of an enterprise with products not previously produced, and the establishment of a new place of business or the increase of the capital of the investee, provided that the shares are acquired by the foreign investor. A portfolio (passive) investment is not a direct foreign investment.


And if you thought that “screening” is some innocent administrative procedure by the authorities, then think again. Here is the legal definition, as per the 2024 amendments:

  • “Screening” is a proceeding that enables foreign direct investment to be evaluated, investigated, permitted, conditioned, prohibited, or terminated.

Foreign investor

The law also defines the term “foreign investor”, namely these are the following categories of potential investors:

  1. A person who is not an EU citizen or an entity whose registered office is not located in the EU;
  2. A legal entity with registered office in the EU, in which control is exercised directly or indirectly by: one or more natural persons who are non-EU citizens, one or more legal persons whose registered office is not in the EU, or another legal entity organized under non-EU law;
  3. A legal person or other legal entity, with registered office in the EU, in which by virtue of a contract or internal rules one or more natural or legal persons established in non EU countries have direct or indirect control over the planned investment in Bulgaria.

In more simple terms, foreign investors are considered all non-EU citizens and all non-EU companies. Non-EU companies are those, who are settled (registered office) in a non-EU country.

Foreign investors are also all EU companies, who are somehow controlled or managed by a non-EU individuals or companies. This means that, for example, all Bulgarian companies, registered by non-EU citizens, are from now on considered as foreign investors, subject to screening.

And last, but not least, foreign investors are even the EU companies, planning an investment in Bulgaria, if the investment may fall under the control of non-EU persons or companies.

Bulgarian investment promotion law 2024


In our opinion, the amendments of 2024 to the Bulgarian investment promotion law are horrifying. For first time ever, if we don’t count the infamous Law for Protection of the Nation, a Bulgarian legal act is written to specifically “target” certain citizens or nationals.

Speaking from professional point of view, we suspect that the amendments may have been drafted in a hurry. It may be due to the fact that the main “target” of the law are citizens of Russia and Belorussia. To us, it is shocking that citizens of any country are explicitly mentioned in a law. This may have some serious contradictions with the Bulgarian Constitution, however we don’t believe the Constitutional Court will be bothered in the current political climate in Bulgaria.

Another worrying thing is the introduction of “trusted” countries. The amendments foresee that the investors from the USA, UK, Canada, Australia, New Zealand, Japan, South Korea, the United Arab Emirates and Saudi Arabia, will be screened as if they are from the EU. To us, segregating different specific countries in a legal act is quite controversial. Especially if some of these trusted countries have questionable reputation in terms of human rights and other freedoms.

Another worrying fact is that the “screening” and “licensing” regime is introduced in a law that is supposed to promote investments. It is such an absurd legal oxymoron, to put it mildly. Banning investors in a law that is supposed to attract investments is like introducing a death penalty in the Law on health care and safety.

Law for Protection of the Nation (1941 ~ 1944)

The Law for Protection of the Nation was a Bulgarian law, effective from 23 January 1941 to 27 November 1944, which directed measures against Jews and others whose legal definition it established.

source Wikipedia, [State gazette], D.V., 16, 23.01.1941.

The practical implications of the law

Without going into much legal details, it’s certain that Bulgaria has to create a huge army of “agents” and “snitchers”. As the new amendments foresee, each and every investment may be subject to screening.

Even an investment by a Bulgarian legal entity may be screened and potentially banned, terminated, etc. We can’t even imagine how will all this work. Who will be reporting an investment that doesn’t require preliminary license, but is subject to screening? Shall the state employ an army of agents? Will a huge governmental structure be formed, with sky-high budget, to hunt investors in Bulgaria. Who could have ever imagined that instead of criminals, we will be chasing investors…

For certain investments, even a preliminary licensing regime is introduced. It’s obvious that Russians and Belarusians will be treated with “extreme care”. It is more than obvious, after all, that they are the main “target” of the whole mambo-jambo that the Bulgarian deputies voted into a law. We are now living in a different world and we better get used to it.

Bulgarian citizenship and residence permit

The Bulgarian Golden Visa that also leads to citizenship should not be affected directly. The new law says that “portfolio (passive) investment is not a direct foreign investment“. However, there is no clear definition as to what a “portfolio” or “passive investment” means. We feel somehow that the politically correct authorities may deem all Russian investment not to be enough passive as to be exempted from screening. Future will tell.

For further information

If you require further information or have a question regarding the 2024 amendments, please don’t hesitate to contact us.

Leave a Reply

Your email address will not be published. Required fields are marked *