In the last few years Bulgaria is in the focus of the investors’ interest. The political stability and predictability

due to the NATO membership and to the finalizing of the EU accession negotiations 6 months earlier than

previously foreseen and planned, the stable economic perspective and the growing credit rating of the country

and its institutions, these are only some of the elements guaranteeing that the investors’ interest will further

grow and will be effectively realized. The improvement of the investment climate in the country gives new

incentives to the striving for faster economic growth. Undoubtedly the existing legal framework and the

implementation of the legal provisions are the other very basic criteria which are being delineated with all their

complexity, problems and priorities.

The current Bulgarian legal system is dynamic, constantly improving, adopting the modern patterns which

reflect the economic progress, the globalization and the directions of the political development. In fact the

Accession Agreement, is in full speed. A lot was done and achieved but still more is ahead. The process of

adapting the Bulgarian legislation to the EU law and the creation of the respective legal surroundings for the

implementation of the new legislative acts – these are goals that will be surely achieved only with the joined

efforts of the legislative, the government officials, the regional administrations and, of course, with the active

support of all members of the legal community in the country - private lawyers, judges, prosecutors.

In Bulgaria investors will find out that many legal provisions are similar to those regulating other markets on

which they used to do business. The vast range of the on-going legal reforms concerns every part of the current

material, as well as procedural laws. In many areas investors will be nicely surprised to find the tendency to

speed up and make more effective as well as to reduce the number of the bureaucratic and administrative

regimes. They may as well benefit from the establishment of special measures fostering the investment projects

with more significant amount. The equal treatment of local and foreign investors is a principle legally

determined and the provisions differing from it, such as the property on land, are in a process of overcoming.

The development of the banking sector, the legal regime of securities and the privatization policies are areas no

longer threatening with uncertainty and crises. At the same time there are spheres such as concessions regime

and public procurement in which the success of the undertaking depends not only on the legislative amendments

introduced but lies more with the organization and the transparency in the functioning of the administrative

system. And there it still leaves much to be desired.

The efficient protection of the intellectual and industrial property in Bulgaria is often one of the preconditions

for the start of investments in the country. And what determines the good investment climate in this respect is

not only the accordance of local laws with the achievements of the international instruments but it is again the

existence of the respective institutions and the organization of their activity for the implementation of the legal

provisions and for the prevention of infringements of rights.

Another very sensitive for the investors sphere is the protection of the rights of employees, especially those of

women and disabled persons, the stability of labor relations, the system of social security.

The question about the administration of justice in Bulgarian is a topic on which very wide, tough, and

sometimes even painful public discussions exploit the existing guarantees on the independence of the judiciary

and the fair trial imperative.

These and many other questions which investors pose will be answered by the Bulgarian Investment

Information network (BIIN).

I. FOREIGN NATIONALS LEGAL STATUSLEGISLATIVE FRAMEWORK AND GENERAL RULES The legal status of foreign nationals in Bulgaria is governed by the Constitution of the Republic of Bulgaria, theForeign Nationals Act (effective 1998), the Regulation on the Application of the Foreign Nationals Act and the Ordinance on Issuing Visas. Generally, the Bulgarian legislation concerning foreign citizens is in compliancewith the EU aquis communautaire related to immigration policy. The Constitution of the Republic of Bulgaria provides that foreign nationals in Bulgaria shall have all the rightsand obligations accorded under Bulgarian law and international agreements ratified by Bulgaria, except in
respect to those laws requiring Bulgarian citizenship.Under Bulgarian law foreign nationals are restricted in exercising the following rights: Ownership rights – foreign citizens do not have the right to acquire ownership title over land except throughlegal inheritance. If land is acquired through this method, it should be transferred to Bulgarian individuals or legal entities within three years following the opening of the will.Pursuant to the last amendment of the Bulgarian Constitution, adopted in 2005 and effective as from the date of accession of Bulgaria in the European Union (“EU”), foreign citizens shall be entitled to acquire ownershiptitle over land under the conditions set forth in the Accession Treaty, and in other international treaties to which
Bulgaria is a party, and where such treaties have come into force.Under the Accession Treaty of the Republic of Bulgaria the following transitional periods were agreed with the European Union:Bulgaria may maintain in force for five years, from the date of accession a prohibition on the acquisition of secondary residences by nationals of the Member States non-resident in Bulgaria and by companiesformed in accordance with the laws of another Member State, and Bulgaria may maintain in force for seven years from the date of accession a prohibition on the acquisitionof ownership title to agricultural and forestry land by nationals of the Member States, and by
companies formed in accordance with the laws of another Member State which are registered in theseMember States. This restriction does not apply to self-employed farmers who are nationals of another Member State and who wish to establish themselves and reside in BulgariaAccording to the Bulgarian legislation no special permits are required for individuals who want to acquire ownership title to premises, and/or limited property rights over immovable property. This regime does not differfor EU or non-EU citizens. Professional rights – foreign nationals cannot be employed as state servants, customs officers or as officers atthe Bulgarian Ministry of Internal Affairs, the Patent Office, the Electronic Media Council, etc. A foreign
citizen also cannot work as a notary. Pursuant to the last amendments of the Law on Advocates, effective asfrom 1 January 2007, foreign nationals who have been admitted to the bar in the respective country, shall be entitled to perform their profession in Bulgaria, subject to fulfillment of certain conditions.Political rights – foreign nationals cannot be candidates for the positions such as that of mayors, members of parliament, president. Pursuant to Article 42, para 3 of the Bulgarian Constitution, the terms and conditions forparticipation of EU citizens in local elections in Bulgaria shall be set forth in a special law. The Council of Ministers has passed to the National Assembly a bill amending the Local Elections Law, whichis still subject to discussion. The amendment is drafted in compliance with Bulgaria’s commitment to the
regulations of Directive 94/80/EC and the Treaty of EC, and is in compliance with the introduction of EUcitizenship as an addition to national citizenship. As from the date of accession of Bulgaria in the EU the citizens of Member States will be entitled to vote formunicipal councilors and mayors in Bulgaria. In order to take part in the elections, EU citizens will have to be permanent residents of the municipality in question, they must not be exempt from the right to vote in anotherEU member state, including Bulgaria. They must express their will to vote in writing. The application has to be filed not later than 40 days before the election day.Under the same conditions, the foreign nationals can be elected as municipal councilors. However, under the
bill, only Bulgarian citizens are eligible for mayors in the country. This issue is solved in a similar way in allMember States. There is a general rule that foreign nationals are obliged to observe Bulgarian laws and the established legalorder, that they should be loyal to the Bulgarian state and not derogate the prestige and dignity of the Bulgarian people. In this respect, foreign citizens residing in Bulgaria bear the same civil, administrative and penalresponsibilities as Bulgarian citizens, unless otherwise provided for under a special law, or an international agreement to which the Republic of Bulgaria is a party.All foreign nationals are obliged, upon entry in the country, to declare the purpose of his/her stay, and to specify
the address at which they will stay.

GENERAL REVIEW

Entry of Foreign Nationals to Bulgaria Foreign nationals who wish to enter and stay in Bulgaria must obtain a visa, unless they are subject to visawaiveragreements. VisasA visa is a clearance for entry and/or stay on the territory of the Republic of Bulgaria for a certain period of time.A valid visa is not a guarantee of entry into Bulgaria. The border control officers will determine whether the
foreign national meets the requirements for admission. If there has been a change in the circumstances betweenthe date of the application and arrival, or if subsequent information is given which was not originally available to the visa office, then the foreign national may be refused entry.The Foreign Nationals Act provides for the following main visa categories: transit visa, short-stay visa and longstay visa.A transit visa is required for travel through Bulgaria to another country within 24 hours. A short-stay visa allows a foreign citizen single or multiple entries into Bulgaria for up to 90 days within aperiod of six months.
A long-stay visa allows a foreign national to enter into Bulgaria and thereafter to apply for a long-term orpermanent residence permit. The validity of the long-stay visa is 6 (six) months and it allows its holder of stay up to 90 days.All visa applications should be submitted to the respective Bulgarian diplomatic missions and consular departments around the world. In exceptional cases (e.g. in the state’s interest, in extraordinary circumstancesor for humanitarian reasons) border control officers, after coordination with the Foreign Nationals Administrative Control Office (“FNACO”), can issue transit visas or short-term visas for up to 10 days.Visa exemption rules
Citizens of some countries can enter Bulgaria without obtaining visas.EU citizens (with the exception of the Republic of Ireland and the United Kingdom) do not need visas for a stay of up to 90 days within each period of six months. Citizens from Australia, New Zealand, Japan, Ireland, UK,Canada, USA, Switzerland, etc., are allowed to stay in Bulgaria without visas for up to 30 days within each period of six months.The calculation of the period commences on the day of first arrival into Bulgaria as indicated in the foreign national’s international passport.Residence permits
Residence permits are issued to foreign nationals entering Bulgaria who intend to stay in the country longer thanthree months. For certain foreign nationals (e.g. Australia, New Zealand, Japan, Ireland, UK, Canada, USA, Switzerland, etc) that period is one month.There are two types of residence permits: Long-term residence permits – up to one year, andPermanent residence permits – for an indefinite period of time. The most common grounds for issuance of long-term residence permits are:The foreign national is a member of the management or supervisory bodies of a Bulgarian company
The foreign national is a trade representative of a company registered with the Bulgarian Chamber ofCommerce and Industry (“BCCI”) The foreign national has been issued a work permit by the Bulgarian Employment Agency, andThe foreign national conducts business activities in Bulgaria and employs at least 10 Bulgarian nationals In order to apply for a residence permit the foreign national should initially obtain a long-stay visa.The common documents required for issuance of a long-term residence permit are as follows: (i) the valid international passport of the applicant; (ii) evidence that the applicant has been provided with a place to liveduring his/her stay in Bulgaria (e.g. rental contracts); (iii) the standard application form; (iv) evidence of
payment of the relevant state fees, and (v) evidence that the applicant has sufficient financial means to meet thecosts of his/her stay in Bulgaria. The application for obtaining a long-term residence permit must be filed before FNACO not later than 7 daysprior to the expiration of the term of the long-stay visa (90 days). Applications are considered and reviewed within 7 working days of their submission and the decision of FNACO is then presented in writing to theapplicant-foreign national. The long-term residence permit can be renewed if the grounds for its issuance still exist at the time of therenewal. It should be noted that an extension of the long-term residence permit can be refused if it is established
that the foreign citizen has not stayed on the territory of the Republic of Bulgaria for at least 6 months and oneday during the preceding calendar year. Once the foreign national has been granted a long-term residence permit, he/she may live, reside and travel inthe Republic of Bulgaria while the permit is valid. The foreign national may freely choose and change his/her place of residence, or leave the country and enter it again.Foreign nationals who have obtained a long-term residence permit have all the rights and obligations granted to or imposed on the Bulgarian citizens. For example, they can be employed by Bulgarian employers, receivesocial security compensations, health care insurance, etc. Long-term residence status for a foreign citizen is
usually evidenced by the issuance of a Bulgarian ID card for the foreign national.

WORK PERMITS

General rules Foreign nationals may work in Bulgaria only after obtaining a work permit, unless otherwise stipulated by thelaw. The bases for obtaining a work permit are an employment contract, or a business trip to undertake certain activities.Work permits should be requested by the local employer and are issued by the Employment Agency. A number of legal terms and conditions must be met for the permit to be issued. Work permits are issued for a maximumduration of 1 year. If the terms and conditions for its issuance are still valid, the work permit may be renewed
for an additional one-year term.A mandatory prerequisite for initially obtaining a work permit is that the foreign national is granted a long-stay visa. Foreign nationals on short-stay visas may not seek employment or apply for work permits in Bulgaria.Foreign nationals who generally do not require a work permit in Bulgaria Outlined below is a list of the main categories of foreign nationals who may work in the country without a workpermit: Managers of companies or branches of foreign legal entitiesMembers of the Managing Board or Board of Directors of local companies, who are not employed on a
labour contractTrade representatives of foreign companies registered at the Bulgarian Chamber of Commerce and Industry, andForeign nationals with permanent residence in Bulgaria Foreign nationals who may work on short-term assignments without a work permitForeign nationals may also be engaged to perform short-term assignments without a work permit under the following conditions:They are sent on a business trip to Bulgaria by their foreign employer
The assignment in Bulgaria is no longer than 3 months within a period of one yearThe assignment encompasses any of the following: (i) the installation or the warranty repair of imported machinery and equipment; (ii) training in the operating of equipment or the delivery of orderedequipment, machines or other items; (iii) training as part of an export contract for the supply of goods under a license agreement; (iv) control and coordination of the performance of a tourist servicescontract between a foreign tour-operator and a Bulgarian tour-operator or hotel-keeper. For all other categories of employees a work permit is required. It is usually issued provided that allrequirements of the law are met (e.g. there is ratio requirement between foreign and Bulgarian employees: 1:10).
Employers must register foreign nationals at the National Revenue Agency within 3 days from the start of theiremployment even if no work permit is required.