STARTUP Visa – Long-term residence with investments in Bulgaria for foreign entrepreneurs from outside the EU

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With the promulgated changes in the Bulgarian Citizenship Act, entrepreneurs from outside the EU will be able to get more quickly and easily the opportunity for long-term residence in the state by obtaining the so-called “Startup Visa”.

The provision of such an opportunity in the current legislation should create conditions for the creation of increasingly successful startups, with the potential to create high-tech products and provide services oriented to both the European and global markets. This is a significant step in the development of the Bulgarian startup ecosystem. The idea for startup visas has been developed by the BESCO association for the last two years. The startup visa is an instrument offered by every EU member state (without Bulgaria until this year).

The Startup visa aims to attract third-country nationals and investments in companies registered in Bulgaria, developing products with high added value, by providing the opportunity to obtain a long-term residence permit.

The current legislation explicitly regulated the possibility of access to the labor market for third-country nationals outside the EU to carry out highly qualified activities, but entrepreneurs were not provided with the opportunity to obtain a visa or long-term residence in the country.

The concept of startup companies summarizes companies in the initial stage of their development. These are often high-tech and innovative companies. Although they are high-risk from an investment and business point of view, the main feature of these companies is their potential for rapid growth. In recent years, there have been a number of examples of successful startups in our country.

What are the options and their conditions?

According to the amendments to the law, through a startup visa a foreign citizen can obtain the status of a long-term resident in Bulgaria, if he/she has become a partner in a local company.

1) The foreigner shall hold a share of more than 50% of the capital of the enterprise.  Also, the subject of activity of the company shall correspond to the one specified in the startup visa, and in case of its change a new certificate shall be issued. Another condition is that the potential applicant shall be approved by the Ministry of Economy, that his/her activity is innovative and therefore is eligible subject to the issuance of such permit.

2) The other option for issuing Startup visa is through the newly established in 2020 State Agency for Research and Innovation (SARI). Individuals shall have a certificate issued by SARI for a high-tech and/or innovative project, and the foreigner shall have at least 50% shares in a Bulgarian company with a capital of at least BGN 1 million. The requirement for the same subject of activity of the company with the one applied for in the Startup visa also applies here.

3) The third option is for foreign investors who invest in the country at least BGN 5 million under collective investment schemes and BGN 3 million through funds. The main goal of these changes is to make the conditions in Bulgaria for risky investors from abroad more acceptable and attractive.

Acquisition of Bulgarian citizenship

With the amendments to the Bulgarian Citizenship Act (BCA) and the Foreigners in the Republic of Bulgaria Act (FRBA), the National Assembly decided to preserve the possibility for acquiring Bulgarian citizenship or permanent residence permit for investments. Foreign investors who maintain their investments in Bulgaria for 5 years can obtain Bulgarian citizenship. A person who is not a Bulgarian citizen and meets the conditions may acquire Bulgarian citizenship by naturalization, if he/she has doubled his/her investment under the same conditions of the law or has invested in the country by paying in the capital of a Bulgarian company an additional amount not less of BGN 1 million for a priority investment project implemented by the company, certified under the Investment Promotion Act.

The spouses of such persons may also acquire Bulgarian citizenship – under a simplified procedure, if:

  • have received a permanent residence permit in Bulgaria not less than three years before the date of submission of the application for acquisition of citizenship;
  • are an adult and has not been convicted;
  • have an income or occupation that enables them to support themselves in Bulgaria;
  • the other spouse has acquired Bulgarian citizenship through an investment in one of the ways described above.

The requirement for a mandatory market test for the employment of third-country nationals outside the EU has been abolished

The other important changes adopted by the National Assembly are in the Foreigners in the Republic of Bulgaria Act and in the Labor Migration and Labor Mobility Act. They eliminate the requirement for the employer to conduct a mandatory research of the labor market when hiring third-country nationals.

Until now, the legal framework required, prior to obtaining a work permit for third-country nationals, that the employer had conducted a preliminary labor market research (market test), proving in a definite way that the national labor market does not offer trained locals; nationals of another EU Member State, of a State party to the Agreement on the European Economic Area, or of the Swiss Confederation, to take up the relevant position, as well as to present evidence that he/she has actively sought staff in a previous period less than 15 days and not more than 3 months).

With the new changes, the access to the labor market of workers – citizens of third countries is allowed for holding of positions for which Bulgarian citizenship is not required. The requirement is that the total number of third-country nationals with a long-term residence permit working for a local employer in the previous 12 months should not exceed 20 per cent of the average number of employees (for small and medium-sized enterprises – 35 per cent). This will significantly facilitate the companies in the process of hiring employees from third countries and will provide new opportunities for attracting both highly qualified staff and other types of specialists.

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