MiFID License in Bulgaria

Bulgaria has proven to be the perfect jurisdiction for incorporating and running FX companies. This is due to its attractive tax regime, their EU Member Status, its implementation of Markets in Financial Instruments Directive (MiFid), and a strong regulatory regime.

According to the Bulgarian legislation, only licensed and registered investment intermediaries can provide FX trading/investing services. This requires direct approval of the Financial Security Commission (FSC) in accordance with Markets in Financial Instruments Act. A few of these requirements are minimal capital investment as well as personal and professional guidelines in regards to the firm’s director.

Every FX brokerage firm licensed by the FSC falls under MiFID, the regulatory organizations for investment services across the 30 European Economic Area member-countries. As such, the ensuing license is valid across the EU, and allows FX brokerage firms to offer investment services, establish representative offices, and create fully-operational branches in any desired location within the European Union.

Minimum Capital Requirements

The follow initial capital requirements are configured for general investment intermediaries:

  1. € 50 000 – Limited Investment Services: reception and transmission of orders in relation to one or more financial instruments, intermediating the conclusion of transactions in relation to financial instruments, and the provision of investment advice to clients. The investment intermediary can not hold clients’ money or/and clients’ financial instruments.
  2. 125 000 – Moderate Investment Services: All of the previous abilities with the addition of executing orders on behalf of clients, portfolio management, and holding clients’ money or/and client’s financial instruments.
  3. € 750 000 – Full Scope of Investment Services: This includes the above-mentioned as well as dealing in financial instruments on a company’s own account and the operation of a multilateral trading facility.

Directors

A Bulgaria Licensed FX company must be managed and represented jointly by at least two persons meeting specific requirements. Some of them are:

  • Having the higher education and professional experience necessary for management of an investment intermediary, in accordance with the designator level of services and activities
  • Having no convictions for a premeditated offence at public law
  • Having no effective disqualification from occupying a position of property accountability

General Conditions to grant a license:

Some of the conditions are:

  • The Memorandum of the Company must have specific clauses regarding the nature of this business
  • The applicant company must fulfill the minimum capital requirements as set out above
  • The company has a physical office space in Bulgaria
  • The suitability of the shareholders. As with the directors, the shareholders pass a fit and proper test, especially a background check whereby FSC is satisfied that they have a clean criminal record as well as experience in the business

Application Procedure – General Outline:

  1. Registration of a firm and preparation of the full set of documents necessary to obtain the license
  2. Filling the license application before the FSC
  3. Examination of the application by the commission and issuing a decision
  4. Issuing a license

FSC Application Fees:

Depending on the case, there is an initial administrative cost for applying for a license, and the fees range from € 2150 to € 5100.

Do not hesitate to book an appointment with our professional consultants – send us an email.

Acquiring BG citizenship by investment

 I. Under Art. 12 of Bulgarian Citizenship Act

The physical person :

  1. Must be an adult;
  2. Before no less than 5 years has been given permit for permanent or long-term residence in Bulgaria;
  3. Has not been convicted of a crime by Bulgarian court or is not prosecuted for such a crime, unless rehabilitated;
  4. Has an income or occupation that enables him to live in Bulgaria;
  5. Is skillful at Bulgarian language;

Permit for long-term residence – requirements (LFRB art. 24, para 1, items 19, 20):

  • Visa D;
  • Investment of no less than 600 000 BGN or  investment in economically disadvantaged regions of no less than 250 000 BGN plus opened at least 5 workplaces for Bulgarian citizens;

Permit for permanent residence – requirements (LFRB art. 25, para 1, items 16, 17):

  • Investment of no less than 500 000 BGN plus opened at least 10 workplaces for Bulgarian citizens;

Or

  • Acquired permit for long-term residence and keeping the investment over 5 years;

II. Under Art. 12a of Bulgarian Citizenship Act

Permit for permanent residence – requirements (LFRB art. 25, para 1, items 6, 7, 8, 13):

  • Investment of over 1 million BGN or  increase of the investment with this amount through the acquisition of:
  1. shares in Bulgarian commercial companies, traded on a regulated Bulgarian market;
  2. shares and treasury bonds and derivative instruments issued by the State or by municipalities, with a residual maturity not less than 6 months;
  3. ownership rights over an isolated part of the property of a Bulgarian commercial company with more than 50 percent state or municipal participation in the capital under the Act of Privatization and Post- privatization Control;
  4. shares or stocks owned by the state or municipalities in a Bulgarian commercial company in compliance with the Act of Privatization and Post- privatization Control;
  5. Bulgarian intellectual property – objects of copyright and related to it rights, patent-protected inventions, utility models, trademarks, service marks and industrial design;
  6. rights under concession contracts on the territory of the Republic of Bulgaria;

or

  • Deposit of 1 million BGN in a licensed credit institution in Bulgaria under fiduciary management for a period not less than five years;

or

  • Investment in the capital of Bulgarian company which shares are not traded on a regulated market of no less than 6 million BGN;

or

  • Performing activities and certification under the Investment Promotion Act – implementing and/or maintaining an investment which has received a certificate for class А, class B, or priority investment project;

The physical person :

  1. Must be an adult;
  2. Before no less than 5 years has been given permit for permanent or long-term residence in Bulgaria;
  3. Has not been convicted of a crime by Bulgarian court or is not prosecuted for such a crime, unless rehabilitated;
  4. Has an income or occupation that enables him to live in Bulgaria;

 III. Under Art. 14a of Bulgarian Citizenship Act

The physical person :

  1. Must be an adult;
  2. Has not been convicted of a crime by Bulgarian court or is not prosecuted for such a crime, unless rehabilitated;

A) Before no less than 1 year has been given permit for permanent residence in Bulgaria under LFRB art. 25, para 1, items 6 or 7 and has increased the investment under the same conditions to 2 million BGN or  has invested in the capital of Bulgarian company no less than 1 million BGN for implemented priority investment project;

or

B) Before no less than 1 year has been given permit for permanent residence in Bulgaria for performing activities and certification under the Investment Promotion Act – implementing and/or maintaining an investment which has received a certificate for class А, class B, or priority investment project. During this year the investments performed and put into exploitation are maintained above the minimum score for certificate for class А;

Permit for permanent residence – requirements (LFRB art. 25, para 1, items 6, 7):

  • Investment of over 1 million BGN or  increase of the investment with this amount through the acquisition of:
  1. a) shares in Bulgarian commercial companies, traded on a regulated Bulgarian market;
  2. b) shares and treasury bonds and derivative instruments issued by the State or by municipalities, with a residual maturity not less than 6 months;
  3. c) ownership rights over an isolated part of the property of a Bulgarian commercial company with more than 50 percent state or municipal participation in the capital under the Act of Privatization and Post- privatization Control;
  4. d) shares or stocks owned by the state or municipalities in a Bulgarian commercial company in compliance with the Act of Privatization and Post- privatization Control;
  5. e) Bulgarian intellectual property – objects of copyright and related to it rights, patent-protected inventions, utility models, trademarks, service marks and industrial design;
  6. f) rights under concession contracts on the territory of the Republic of Bulgaria;

or

  • Deposit of 1 million BGN in a licensed credit institution in Bulgaria under fiduciary management for a period not less than five years;

If you have any questions regarding the acquiring of Bulgarian citizenship, do not hesitate to contact us.