FDI Screening in Bulgaria — Foreign Direct Investment Review (2026)

Legal framework

The Bulgarian FDI screening regime is codified in the Investment Promotion Act (IPA), in the newly added Chapter Six “Screening of Foreign Direct Investments”. The chapter was introduced by an amendment to the IPA published in the State Gazette No. 20 of 8 March 2024 and entered into force on 12 March 2024.

Although the substantive framework applied from March 2024, its practical enforcement was limited until the adoption of the Implementing Regulation to Chapter Six of the IPA, published in the State Gazette on 22 July 2025. From that date the regime is considered fully operational, with approved notification forms, internal rules of the Inter-ministerial Council and procedural deadlines.

At EU level, the foundation of the Bulgarian regime is Regulation (EU) 2019/452 of the European Parliament and of the Council establishing a framework for the screening of foreign direct investments into the Union. The Regulation does not harmonise national regimes but sets a common framework for cooperation between Member States and the European Commission through an information exchange mechanism.

In November 2025, the National Assembly passed an amendment to the IPA specifically targeting the screening of assets of an oil refinery. By Decree No. 208 of 5 November 2025, published in State Gazette No. 95 of 7 November 2025, the President vetoed the amendment and returned it for re-deliberation. The core March 2024 regime, however, remains in force and is applied without interruption.

Competent authority

The primary decision-making body for FDI screening is the Inter-ministerial Council for Screening of Foreign Direct Investments at the Council of Ministers. The Council is a collective body composed of representatives of key ministries and agencies responsible for national security and public order.

• Bulgarian Investment Agency (BIA) — acts as the one-stop shop for filing notifications. BIA is a secondary budget authority under the Ministry of Innovation and Growth and handles the procedural side: receiving applications, verifying completeness and forwarding them to the Council.
• State Agency for National Security (SANS) — provides opinions on national-security risks, including source of funds and ultimate beneficial ownership (UBO).
• Sector ministries — depending on the specific sector (energy, transport, defence, healthcare, telecoms, etc.), an opinion is required from the relevant line ministry.

The Council’s decisions take the form of administrative acts and are subject to judicial review before the administrative courts under the general rules of the Code of Administrative Procedure.

Who is covered

The regime applies to “foreign investors” within the meaning of Regulation (EU) 2019/452 and Chapter Six of the IPA. A notification obligation arises in two situations:

• Non-EU/EEA investors — natural or legal persons with their seat, permanent residence or citizenship outside the European Union and the European Economic Area.
• EU-incorporated legal entities controlled by non-EU persons — companies incorporated in an EU Member State but directly or indirectly controlled by a natural or legal person from outside the EU. Control is assessed on the basis of UBO criteria, including control via shares, voting rights, contract or any other means.

Investors from the EU/EEA that are the ultimate beneficial owners, as well as investments by the State or its bodies, fall outside the scope. However, the regime has extended reach — even in complex corporate structures, a substantive non-EU element can trigger screening.

Notification thresholds

A notification obligation arises when the following thresholds are met, cumulatively or alternatively depending on the type of investment:

Automatic screening — no value thresholds

Certain situations trigger screening regardless of deal value or the size of the stake acquired. In these cases, notification is mandatory even at symbolic consideration:

• Oil and petroleum products — investments in the exploration, extraction, refining, transport and trade of oil and petroleum products.
• Russian and Belarusian investors — any participation by natural or legal persons of Russian Federation or Republic of Belarus origin/citizenship/seat is subject to screening.
• Non-EU state-backed investors — where the capital of the foreign investor is held, directly or indirectly, by a State outside the European Union.
• Government financing — where the investment is supported by significant funding from a government body of a third (non-EU) country, including sovereign wealth funds, export credit agencies or state-owned banks.

Sensitive sectors (Art. 4 of Regulation 2019/452)

The Bulgarian regime adopts the sensitive sectors catalogue under Art. 4 of Regulation (EU) 2019/452. Investments in these sectors trigger enhanced requirements and, in some cases, automatically override standard thresholds:

1. Critical infrastructure — physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral and financial infrastructure, as well as sensitive facilities and land essential for their operation.
2. Critical technologies and dual-use items — artificial intelligence (AI), robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies, as well as nano- and biotechnologies.
3. Critical inputs and resources — energy supply, raw materials, food security.
4. Access to sensitive information, including personal data, or the ability to control such information.
5. Freedom and pluralism of the media — investments in media companies with the potential to affect media independence.

Procedure and timelines

The screening procedure unfolds across several clearly delineated stages:

1. Filing with BIA — the investor submits an electronic notification to the Bulgarian Investment Agency containing information on ownership structure, source of funds, type and value of the transaction, investment purpose and sector, and the ultimate beneficial owner (UBO) along the full control chain.
2. Standstill obligation — from the moment of filing (and until a final decision), the deal cannot be closed. This suspensory effect means that legal acts transferring ownership, rights or assets may not be carried out prior to clearance.
3. Initial review — the Inter-ministerial Council has a deadline of up to 45 days for its initial review and decision. During this period opinions are collected from SANS and the sector ministries.
4. Extension — in complex cases or where additional information is required, the deadline may be extended by up to 30 days (75 days in total).
5. Possible outcomes — the procedure may end in:
   • unconditional approval;
   • conditional approval — with mitigation measures (e.g. restrictions on information access, governance requirements, divestments);
   • prohibition of the investment — full block of the deal;
   • unwinding of a closed transaction — where closing occurred in breach of the standstill obligation or information was concealed.

Penalties

The sanctions regime in Chapter Six of the IPA is among the most stringent in the region and aims to secure compliance with both the notification duty and the standstill effect:

For repeat infringements the penalties may be doubled. In addition to monetary sanctions, a deal closed in breach of the standstill obligation may be unwound by order of the Council — with all ensuing civil and accounting consequences for the parties.

Interface with merger control (Competition Act)

FDI screening is independent and applies in parallel with other regulatory regimes. The most common overlap is with merger control under the Protection of Competition Act (PCA), administered by the Commission for Protection of Competition (CPC).

A single transaction may require multiple parallel clearances:

• CPC clearance — where the PCA turnover thresholds are met (antitrust merger control).
• FDI clearance — where the transaction falls within the scope of Chapter Six of the IPA.
• Sector clearances — from the Bulgarian National Bank (qualified holdings in banks and payment institutions), the Financial Supervision Commission (capital markets, insurance, pensions), the Energy and Water Regulatory Commission (energy and water utilities), and the Communications Regulation Commission (electronic communications).

When structuring a deal, all relevant approvals must be planned, and the long-stop date in the SPA should accommodate the longest expected timeline — typically FDI screening with extension (75 days) plus preparation and response to information requests.

Practical tips

1. Assess FDI risk at LOI / term sheet stage — identify early whether the deal falls within scope to avoid late surprises and structural changes.
2. Include FDI clearance as a condition precedent in the SPA — the share purchase agreement should expressly provide for FDI clearance as a CP, with clear allocation of filing obligations and costs.
3. Plan the long-stop date with a buffer — the CP deadline must accommodate the 45+30-day procedure plus time for document preparation and responses to information requests.
4. Document the source of funds — bank statements, audited financial statements, UBO declarations and source of wealth/source of funds evidence are mandatory annexes.
5. Russian or Belarusian UBO ⇒ automatic screening — even indirect or minority participation triggers it. Thorough due diligence across the full corporate chain is essential.
6. Non-EU sovereign participation ⇒ automatic screening — investments by sovereign wealth funds, state-owned enterprises or banks of third countries require heightened scrutiny and detailed justification.
7. Coordinate with tax and corporate workstreams — FDI clearance does not relieve the investor from tax, accounting and registration obligations (including permanent establishment, withholding tax and compliance with the EU Data Act where data is processed).

Frequently asked questions