In 2024, Bulgaria adopted its first formal screening mechanism for foreign direct investment (FDI), aligning national legislation with Regulation (EU) 2019/452. The mechanism aims to safeguard national security and public order without compromising Bulgaria’s traditionally open investment climate.
Bulgaria’s implementation
Bulgaria transposed the EU framework through amendments to the Investment Promotion Act (IPA), which entered into force in 2024. The responsible authority is the Interdepartmental Council on FDI (i.e. Screening Council), which is a permanent body that reviews applications for direct foreign investment and issues or refuses permits for direct foreign investment. The actual application of the screening procedure was subject to an amendment in the Regulation for the application of the IPA (RAIPA), which was officially promulgated on 22 June 2025. The Council of Ministers will determine the exact composition of the Screening Council and its members.
Scope and application
The screening mechanism applies to investments by non-EU/EEA investors that may affect areas such as:
- Critical infrastructure: energy, water, transport, health, communications;
- Critical technologies: AI, semiconductors, cybersecurity, robotics;
- Access to sensitive data or control over the media;
- Food and raw material security.
Mandatory prior notification will be needed for transactions involving acquisition of control or significant influence over a Bulgarian entity in these sectors.
Screening procedure
Foreign investors must prepare and file a notification in a special form, as provided in the RAIPA, along with the prescribed additional documents. Once a complete notification is filed, the secretariat created to the Screening Council must, within 14 days, prepare a reasoned proposal to the Screening Council that states:
- no objection to the investment;
- a comprehensive review of the investment.
The Screening Counsil has ten days to review the application with the secretariat’s recommendations and make the following decsion:
- allow the investment to be made without a comprehensive check;
- carry out a comprehensive check.
If the Screening Council decides to carry out a comprehensive check, it has up to 45 business days (with possible extensions) to complete the review.
The Screening Council assesses whether the investment poses a threat to security or public order, and will consider factors such as:
- Whether the investor is controlled by a third-country government;
- The nature of the target’s business activities;
- The investor’s compliance history.
The possible outcomes include:
- Approval without conditions;
- Conditional approval (e.g. commitments or safeguards);
- Prohibition of the investment.
Legal remedies and EU coordination
Decisions of the Screening Council are subject to judicial review before the Supreme Administrative Court. The Screening Council must also cooperate with the European Commission and other EU member states.
Implications for investors
This new regime introduces a structured review process but is not intended to discourage investment. Instead, it identifies high-risk transactions in sensitive sectors. Investors are advised to conduct early due diligence and consider legal consultation, especially when investing in critical or strategic industries.
Conclusion
With the adoption of its FDI screening mechanism, Bulgaria joins the growing number of EU member states implementing national review procedures in line with EU Regulation 2019/452. While the framework is still developing, it brings Bulgaria in step with European standards and offers greater clarity on the intersection between foreign investment and national security.
For more information on FDI screening in Bulgaria, contact your CMS client partner or these CMS experts: Atanas Bangachev, Nikola Naydenov.
