Bulgarian investment residence alongside with residence elsewhere in the EU?

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duality

With the new year, the conditions for the applicants for Bulgarian investment citizenship have become (once again) more difficult to comply with. What was perfectly fine in 2019 and 2020, will be now considered as “unacceptable”. Today we will discuss one very important situation and will try to show how merely complying with the legal requirements may be not sufficient anymore.

The question

Suppose a private individual is in the process of applying for Bulgarian citizenship by investment. The first stage of the process is to obtain permanent residence permit. Then the applicant needs to wait at least 12 months, before he can apply for Bulgarian citizenship and passport. So the question is:

During these first 12 months, while the applicant holds Bulgarian permanent residence permit, is he allowed to apply for another EU permanent residence permit from another EU member state?

The answer

The straight answer to the question is:

Yes, the applicant can apply for another EU permanent residence permit and reside in the other EU member state while he holds Bulgarian permanent residence permit (issued as per the Bulgarian Citizenship by Investment program).

But there are some serious caveats. So let’s dig deeper and see under what circumstances there may be negative consequences for the applicant’s application for Bulgarian citizenship by investment.

The legal stuff

The Bulgarian law for the foreigners stipulates under what circumstances, a foreigner can have his permanent residence permit revoked. These are namely:

  • When the investment (for which the permanent residence permit has been granted) has been liquidated;
  • When the foreigner has been absent from the territory of the EU for more than 12 months, with exception of the foreigners who are applying under the investment residence/citizenship program;
  • When the foreigners is family member of Bulgarian citizen and has been absent from Bulgaria for 2 consecutive years (under some specific conditions);
  • In all cases, after absence from Bulgaria for more than 6 years (with some exceptions).

As you can see, there is no legal ground to revoke the residence permit of an investment citizenship candidate if he obtains permanent residence permit from another EU member state. Even more, while a “standard” permanent resident will lose his residence rights in case he is absent from the EU for 12 months or more, an investment resident’s rights will not be affected in such scenario.

The Bulgarian law on the citizenship also doesn’t impose any restrictions on the investment citizenship candidate in terms of obtaining permanent residence permit in another EU members state.

So far so good. But obtaining citizenship by investment in the EU goes far beyond the direct legal requirements.

EU citizenship by investment – a golden opportunity rather than a right

Obtaining citizenship by investment is indeed a golden opportunity, bearing in mind the exceptionally favorable conditions of the Bulgarian program. The government is expecting from all applicants not only to formally fulfill the legal requirements, but to also demonstrate strong bond with Bulgaria. The Bulgarian authorities are also making best effort to only accept candidates who are “invested minded” beyond their legal duty to buy Bulgarian bonds for two million Bulgarian Lev (more on that below).

Strong bond (link) with Bulgaria

Under enormous pressure from the EU Commission, Bulgaria is determined to demonstrate that all investment citizenship candidates have strong link with the country. The EU is strongly opposing any “citizenship for sale” schemes and is expecting from the Bulgarian authorities to only grant citizenship to people, whose connection with Bulgaria is not only the fulfillment of the investment requirements. Part of this is the 12-months residence requirement before the candidate can apply for citizenship. But for the EU Commission, this is far from sufficient.

Therefore the Bulgarian authorities are looking for any other subjective criteria before approving any citizenship application. If an investment citizenship candidate has obtained permanent residence permit and is not living in Bulgaria, this is still acceptable. If he is living with his German wife in Germany, this is also ok. But if the applicant for Bulgarian investment citizenship has obtained Portuguese golden visa through investment, this will be a huge red flag for the Bulgarian authorities. And this may result in rejecting the investment citizenship application. The logic is, why would one be willing to obtain Bulgarian citizenship by investment, but at the same time is preferring to spend time in another EU member state by participating in its investment program? The only logical answer is that the bond of the candidate with Portugal is stronger than the bond with Bulgaria. And the only reason to participate in the Bulgarian investment program is that it leads to citizenship, while the Portuguese golden visa doesn’t grant citizenship rights.

Again, this is not violation of the Bulgarian legislation and the conditions of the investment citizenship program. This is however against the “spirit” of the investment citizenship legislation and the recommendations of the EU Commission.

Investment minded applicants are preferred

The conditions of the Bulgarian investment program are more than generous. The applicant doesn’t really need to make any “real” investment. By “investment” it is usually meant something that holds risk in itself. The Bulgarian program allows the applicants to buy high-rated Bulgarian Eurobonds, that are anything but a risky investment. Basically, the investment program is simply requiring the applicant to have certain net-worth, rather than contributing anything to the Bulgarian economy. Bulgarian bonds are being sold in an instant anyway, so the investment citizenship candidates are not doing any good to the Bulgarian economy by buying them. And the Bulgarian authorities not only realize that, but are constantly reminding it to the citizenship applicants, one way or another.

The whole idea of the law is to attract wealthy individuals, who will make real investments after they become Bulgarian citizens. Although this is not a legal requirement, this is basically the “spirit” of the citizenship program. The Bulgarian parliament has passed the law with the hope that it will attract new citizens, who will in one way or another contribute the economy at one stage or another. The requirement to buy bonds is only a preliminary net-worth requirement to ensure the candidate will have the financial ability to contribute to the economy later, at its own pace.

And now imagine a Bulgarian citizenship by investment candidate, obtaining permanent residence by investment in another EU country, while waiting to apply for Bulgarian passport. Imagine how the Bulgarian authorities are looking upon someone who has “invested” two million Leva in Bulgarian (highly) liquid Eurobonds to obtain Bulgarian passport, while at the same time he has invested much more in another EU country to comply with its condition, only to obtain residence rights there. How do you think the Citizenship Council at the Bulgarian Ministry of Justice will recommend the candidate to the vice-President to grant investment citizenship to this candidate? If he has invested more in another country, why should Bulgaria grant him investment citizenship and not the other country? Logical, isn’t it?

In a nutshell

If you are applying for Bulgarian citizenship by investment, during the time when you are holding Bulgarian permanent residence permit (for 12 months at least), please consider the following:

  • You can obtain residence permit from another country (also EU) and reside in this country, but please observe the following:
    • If your residence permit is on basis of “personal reasons”, such as marriage, employment, etc. this should not have an impact on your Bulgarian citizenship application;
    • If your residence permit however is “investment” based (ie investment in real estate in another EU member state, business relocation, etc.), the Bulgarian authorities may deem that your bond with the other EU country is stronger than the link with Bulgaria. This may have negative consequences on your Bulgarian citizenship application’s outcome.

What to do if you want to mitigate the risks?

If you have applied for Bulgarian citizenship by investment, but for whatever reason, you just have to obtain residence by investment in another EU member state, then you should be pro-active. With our support, you can prepare a legal report and explain your situation to the authorities. The report should prove your Bulgarian bond still being stronger, although your intermediate needs require you to make certain investments in another EU country. Without explaining your situation, the risks for your application being considered as an attempt to “buy yourself Bulgarian passport” may be more serious than you might want to take.

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