On 12 March 2024, Bulgaria's National Assembly amendment to the Investment Promotion Act introducing a screening process for foreign direct investments (FDI) to address national security and public order concerns entered into force. The amendment requires a preliminary review of non-EU investments in critical sectors if they involve at least 10% equity in a Bulgarian company or exceed €2 million. Investments by non-EU state-owned entities or those from specific countries or sectors are subject to screening regardless of these thresholds. The Interdepartmental Screening Council oversees FDI authorisations in Bulgaria, with the authority to initiate reviews. It must deliver decisions within 45 days, which may include approval, conditional approval, or rejection. Non-compliance or the submission of false information results in penalties amounting to 5% of the investment's value, with a minimum fine of BGN 50,000.
"Art. 1. (1) This Act regulates the conditions and procedure for investment promotion on the territory of the Republic of Bulgaria, the activities of state bodies in the field of investment promotion, as well as their protection.
(2) The main objectives of this law are:
1. increasing the competitiveness of the Bulgarian economy through increased investments in scientific research, innovation and technological development in production and services with high added value, while respecting the principles of sustainable development;
2. improving the investment climate and overcoming regional disparities in socio-economic development;
3. creation of new and highly productive jobs.
(3) This Act regulates the conditions and procedure for conducting screening of foreign direct investments related to security or public order, in accordance with Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for screening of foreign direct investments into the Union (OJ, L 79 I/1 of 21 March 2019), hereinafter referred to as " Regulation (EU) 2019/452 ".
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Chapter Six. NATIONAL MECHANISM FOR SCREENING OF FOREIGN DIRECT INVESTMENTS RELATED TO SECURITY OR PUBLIC ORDER, IN ACCORDANCE WITH REGULATION (EU) 2019/452
Art. 27.  (1) A foreign direct investment by a foreign investor shall be carried out after issuing a permit by the Interdepartmental Council for Screening of Foreign Direct Investments, hereinafter referred to as the "Interdepartmental Council for Screening", if it has as its subject the areas of activity specified in Art. 4, paragraph 1 of Regulation (EU) 2019/452 , and meets one of the following conditions:
1. through the implementation of the investment, ownership of at least 10 percent of the capital of an enterprise operating in the country is acquired, or the value of the investment exceeds the threshold of EUR 2,000,000 or its equivalent in leva;
2. through the implementation of the investment, ownership of at least 10 percent of the capital of an enterprise operating in the country and carrying out high-tech activities is acquired;
3. a new investment is made that exceeds the threshold of 2,000,000 euros or their BGN equivalent.
(2) Exceptionally, foreign direct investments that are new investments or do not exceed the threshold of EUR 2,000,000 or their BGN equivalent may be subject to review and authorization by the Interdepartmental Council for Screening upon a proposal by a member of the Council with competence in the relevant sector in which the investment will be made, in coordination with the representatives of the State Agency for National Security and the State Agency for Intelligence.
(3) All direct foreign investments in facilities and activities by persons carrying out activities under Art. 2, para. 1, item 8 of the Act on the Administrative Regulation of Economic Activities Related to Oil and Products of Petroleum Origin shall be subject to screening under the procedure of this Act .
(4) All foreign direct investments with a foreign investor from Russia or the Republic of Belarus shall be subject to screening under the procedure of this law.
(5) Upon a reasoned request of the State Agency for National Security and the State Agency for Intelligence, a foreign direct investment shall be subject to screening by the Interdepartmental Screening Council, regardless of the criteria under paragraph 1, when there is evidence that the same may have an impact on security and public order.
(6) The screening of a foreign direct investment under the terms and conditions of this law does not exempt the foreign investor from his obligations established in other laws.
(7) Direct foreign investments within the scope of para. 1 shall be subject to screening under the procedure of this Act, regardless of the investment threshold restrictions, when there is a direct or indirect participation of a country outside the European Union in the capital of the foreign investor, including significant financing by a state authority. When the foreign investor is a company whose shares are traded on a regulated market, sentence one shall apply in the event that the direct or indirect participation of a country outside the European Union in the capital of the company is greater than 5 percent. This procedure shall not apply to the countries under para. 8 and 9.
(8) The National Assembly, upon a proposal from the Council of Ministers, shall adopt by decision a list of countries outside the European Union with low risk for the purposes of implementing the screening mechanism.
(9) For countries included in the list under paragraph 8, as well as for the United States of America, the United Kingdom, Canada, Australia, New Zealand, Japan, the Republic of Korea, the United Arab Emirates and the Kingdom of Saudi Arabia, the screening rules for Member States of the European Union shall apply for the purposes of implementing the screening mechanism.
Art. 27a. (1) A foreign investor who intends to make a direct foreign investment under Art. 27, para. 1 , shall be obliged to submit an application for issuance of a permit in advance.
(2) The application for issuance of a permit shall be submitted by the investor through the agency to the Interdepartmental Screening Council in accordance with the procedure of this Act.
(3) The application under paragraph 1 shall be submitted simultaneously with an application for the issuance of a permit, license or entry in a register provided for in another law. The proceedings under this Chapter shall not be grounds for suspension of proceedings for the issuance of a permit, license or entry in a register provided for in another law, except in the cases provided for by law.
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Art. 27f. (1) When examining applications for issuing a permit for direct investments, the Interdepartmental Screening Council shall apply the criteria specified in Art. 4 of Regulation (EU) 2019/452 , under the terms and conditions of this Act and the regulations for its implementation.[...]" (Investment Promotion Law, as amended by Law on Amendments and Supplements to the Investment Promotion Act, adopted 12 March 2024, Articles 1, 27, 27a, and 27f [google translation])
Investment Promotion Law, as amended by Law on Amendments and Supplements to the Investment Promotion Act, adopted 12 March 2024
[<a href="https://lex.bg/laws/ldoc/2134164480">Law</a>]