CMS Expert Guide to Foreign Investment Screening Laws in Bulgaria

The Bulgarian FDI laws are set out in the Investment Promotion Act (Закон за насърчаване на инвестициите – "IPA"), which entered into force on 8 March 2024 and became fully applicable on 22 July 2025 (following the adoption of implementing regulations). 

The IPA implements the requirements introduced by the EU FDI Screening Regulation (EU) 2019/452 (the "EU FDI Screening Regulation"), which is applicable in Bulgaria.

Prior screening is required for any foreign direct investment that: (i) directly or indirectly originates from a non-EU controlled investor and (ii) targets certain industries listed under Article 4 (1) of the EU FDI Screening Regulation (i.e. critical infrastructure, critical technologies, supply of critical inputs, access to sensitive information, and freedom and pluralism of the media), when the investment:

• involves the acquisition of at least 10% of the capital of an enterprise operating in Bulgaria or the value of the investment exceeds EUR 2,000,000 in value; or
• involves the acquisition of at least 10% of the capital of a company operating in the country and carrying out high-tech activities; or
• is a new investment (i.e., greenfield), which exceeds EUR 2,000,000 in value.

Furthermore, an investment is subject to approval irrespective of the above-mentioned thresholds if:

• it is proposed by a member of the Interinstitutional FDI Screening Council, with competence in the sector relevant to the FDI and agreed with the representatives of State Agency National Security and State Agency Intelligence;
• it concerns the production of energy products from oil and of petroleum products in facilities part of or adjacent to critical infrastructure. Such critical infrastructure includes strategic facilities of importance for national security in the energy sector intended for the production, processing, handling, storage and transfer (including through pipelines) of oil and of energy products that are under the supervision of the Minister of Economy and Industry;
• it is made by investors from Russia or Belarus;
• it may affect the security or public order and a substantiated request for screening is made by the State Agency for National Security and the State Agency Intelligence (it is unclear who may provide such information to the competent authorities;
• the FDI Screening Council has received an opinion or a report from the European Commission or another EU member state; or 
• it is made by an investor that has direct or indirect government participation in its capital from a country outside the EU, including significant financing by a public authority. When the foreign investor is a company whose shares are traded on a regulated market, approval is required where the direct or indirect involvement of a country outside the EU in the company's capital is more than 5%. An exception applies for certain low risk countries. Currently, these are 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. This list can be subsequently amended by the Council of Ministers.

Filing is mandatory for transactions caught by the regime. Such transactions cannot be closed prior to obtaining approval (suspensory effect).

Upon consideration of applications for granting authorisation for direct investments, the Interinstitutional FDI Screening Council shall apply the criteria referred to in Article 4 of the EU FDI Screening Regulation, and shall grant approval for the investment to the extent that the investment in question (i) does not affect security or public order and (ii) is not likely to affect projects or programmes of European Union interest.

The competent authority enforcing the Bulgarian FDI laws is the Interinstitutional FDI Screening Council (Междуведомствен съвет за скрининг на преките чуждестранни инвестиции).

The Interinstitutional FDI Screening Council is made up of the following members: (1) chairperson, being a deputy prime minister designated by the Council of Ministers; (2) deputy chairperson, the Minister of Innovation and Growth or a deputy minister authorised thereby; (3) a representative of the Ministry of Defence; (4) a representative of the Ministry of Interior; (5) a representative of the Ministry of Finance; (6) a representative of the Ministry of Health; (7) a representative of the Ministry of Foreign Affairs; (8) a representative of the Ministry of Economy and Industry; (9) a representative of the Ministry of Transport and Communications; (10) a representative of the Ministry of Electronic Governance; (11) a representative of the Ministry of Energy; (12) a representative of the State Agency for National Security; (13) a representative of the State Intelligence Agency; (14) a representative of the Commission on Protection of Competition; (15) a representative of the Financial Supervision Commission; (16) a representative of the Communications Regulation Commission; and (17) a representative of the Energy and Water Regulatory Commission.

For direct foreign investments in Bulgaria falling within scope of the IPA, the direct acquirer(s) is/are responsible for submitting an approval application. The application must be submitted to the Interinstitutional FDI Screening Council through the Bulgarian Investment Agency.

In addition, the Interinstitutional FDI Screening Council can also assume jurisdiction and initiate ex officio proceedings in the following extraordinary scenarios:

• for any transaction falling within scope of the IPA, if no approval application has been submitted;
• if it is proposed by a member of the Interinstitutional FDI Screening Council, with competence in the sector relevant to the FDI and agreed with the representatives of State Agency National Security and State Agency Intelligence;
• if the FDI Screening Council has received an opinion or a report by the European Commission or another EU member state; or
• if the transaction may affect the security or public order and a substantiated request for screening is made by the State Agency National Security and the State Agency Intelligence.

5.3.1 Submission of the application

The application for an authorisation must contain at least the information referred to in Article 9(2) of the EU FDI Screening Regulation, which sets out information on the requisite documents and the conditions for the submission of an application. The application for an authorisation must be submitted using a standard form in Bulgarian together with an English translation. The documents accompanying the application must be originals or copies certified by the applicant or an authorised representative thereof.

Within three days of receipt of an application , the Bulgarian Investment Agency must verify that the application and the accompanying documents comply with the requirements of the IPA and the EU FDI Screening Regulation, and transmit the application for consideration to the Interinstitutional FDI Screening Council (in the event that the application does not comply with the requirements, the Bulgarian Investment Agency shall notify the applicant within seven days to remedy the non-compliance).

5.3.2 Review of the application

Within 45 days of receipt of a complete application (extendable once by up to 30 days by a decision of the Interinstitutional FDI Screening Council), the Interinstitutional FDI Screening Council must adopt a decision whereby:

• the council grants an authorisation for making a foreign direct investment in Bulgaria, if the investment does not affect security or public order and is not likely to affect projects or programmes of European Union interest;
• the council grants a conditional authorisation for making the foreign direct investment, allowing it to proceed subject to compliance with specified conditions such as:
  • limiting the right to acquire up to 20% of the capital of a company;
  • limiting the right to acquire up to 10% of the capital of a company in high-technology manufacturing;
  • directions for personal data protection, for safeguarding information security or similar – pursuant to a proposal by a competent regulatory authority;
  • retaining special rights in favour of the state in respect of decision-making within the competence of the general meeting and the management for commercial corporations with a share capital (so-called "golden share") in the cases of transactions which are being effected according to the procedure established by the Privatisation and Post-Privatisation Control Act; or
• the council rejects the application for authorisation, if it considers that the   transaction affects the security or public order in Bulgaria or is likely to affect projects or programmes of European Union interest.

Where the foreign direct investment that is to be made in Bulgaria is likely to affect projects or programmes of European Union interest, the Interdepartmental Screening Council must adopt a decision subject to the requirements of Article 8 of the EU FDI Screening Regulation, taking into account the opinion of the European Commission. In such case, the time limit shall be suspended until receipt of the opinion from the European Commission.

Depending on the specificity of the foreign direct investment considered and if it deems it necessary, the Interinstitutional FDI Screening Council may request opinions from other authorities or institutions. Such opinions shall be of a consultative nature and shall be sent to the council not later than 15 days after the request.

If no decision is issued within the above time periods, the acquisition is deemed to be approved/cleared.

There are currently no administrative costs associated with the submission of a notification or the review process.

Generally, no information relating to procedures under the IPA is published.

The Interinstitutional FDI Screening Council is required to publish bi-annual reports with aggregated information on the number of applications submitted to it, as well as the number of decisions it has taken.

A foreign investor is liable to a fine or a pecuniary penalty amounting to up to 5% of the value of the investment, but not less than EUR 25,500, where:

• the investor provides inaccurate, incomplete or misleading information in an application requesting authorisation of a foreign direct investment;
• the investor implements a foreign direct investment without first obtaining the requisite authorisation under the IPA;
• the investor makes a foreign direct investment in violation of conditions imposed by a conditional authorisation granted under the IPA; or
• the investor fails to comply with a measure imposed by the Interinstitutional FDI Screening Council.

The Interinstitutional FDI Screening Council may, irrespective of any fine or pecuniary penalty, also impose such restrictive measures on the foreign investor as it deems necessary to ensure security or public order, including a change of control, change and/or cessation of activity, unwinding of the foreign direct investment or other appropriate measures. Any such measures shall be applied after the conduct of negotiations between the investor and an empowered representative of the Interinstitutional FDI Screening Council.