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"There is always danger for those who are afraid." - George Bernard Shaw
The Bulgarian Citizenship by Investment Program is definitely the hot ticket since 2014-2015 – a fact, which we were made to fully realize. Nowadays, we are being approached on daily basis by agents and lawyers from all over the world, trying to find out as much information as possible about the particularities of the Bulgarian program. Many of them are backed by clients, ready and waiting to apply for Bulgarian citizenship straight away, but are stuck with their agents, who know nothing about Bulgaria.
With all the fuss around the Bulgarian fast-track citizenship program, what happened next didn’t come as surprise to anyone. Basically, those international agents who didn’t have adequate and reliable access to comprehensive Bulgarian legal support (we estimate these to be about 99,9% of the cases), but had contacts with determined clients, had to choose between the next three options:
- Let their customers go and lose all the money;
- Liaise with local Bulgarian qualified agent in order to service the customers and share the profit (lose some of the money);
- Pretend that they can do the job and proceed further with the citizenship application of their customers.
In our, dominated by money world, it is no surprising that the first two options were chosen only by few. There was unfortunately also a fourth category – those who have opted for the straightforward scam.
The most common cases that should really raise the "red flag"
Don’t get us wrong, we are in now way trying to suggest that only non-Bulgarian agents are failing to provide adequate service. Local Bulgarian companies and lawyers have also failed in many ways. Please read below to find out about the most common cases where extreme caution is advised.
The financed option
"I try not to borrow, first you borrow then you beg." - Ernest Hemingway
This is probably the most frequent source of problems for the participants in the fast-track citizenship program. The whole idea behind the investment citizenship legislation in Bulgaria is to attract individuals who posses the required resources. The government is not asking any financial contributions (as is the case in Malta for example); it is just trying to evaluate those who are financially independent and to give them a boost in life by providing them the opportunity to become EU citizens. What more could one wish for?
We always tell our prospective clients, that if they can’t meet the financial criteria with their own means, then the Bulgarian program is probably not suited for them. There are many other solutions, albeit not of such life changing magnitude, that would be more suitable for people with lower net-worth status (long term residency, permanent residency, long term visa, etc.).
So why is the financed option such an issue so we have even placed it on top of our "beware list"?
First of all, in some cases, financing the investment is simply forbidden by law. In the case of investment in trust account with Bulgarian bank for example, the law is quite clear – it is not allowed to finance this investment through another Bulgarian financial institution. Of course there are ways around, such as to finance it through non-Bulgarian bank, or of course, to opt for investment in Bulgarian shares or bonds, where no refinancing restrictions exist. Still, the broader legislation in Bulgaria states that "contracts, meant to circumvent the legislation are deemed to be void". This is of course an overcautious approach, to even consider this as an obstacle, but as legal compliance is our top priority, we feel obliged to warn our customers for all possible pitfalls. In some cases though, where the client has absolutely no other choice, but to seek second citizenship of an EU country, we may be in position to assist and achieve 100% legal conformity.
The real danger however lies elsewhere. You have probably seen already different offers on the internet that lure the client into paying irrevocably some fixed amount instead of investing the required capital of 1 024 000 EUR. The amounts usually range anywhere between 300 000 and 500 000 EUR. These offers claim that the money will be used to finance the required investment so the citizenship applicant doesn’t have to come up with the whole sum. Sounds logical, doesn’t it? But think for a second; why should one part with half a million for good rather than keep a million on his own bank account? There are actually only two categories of clients who feel tempted to go for such a scheme. To the first one belong the clients who really don’t posses the required million and are so desperate to get EU citizenship that they are eager to pay the ridiculous fee. The second category is formed by customers who do not trust the financial system or, in the majority of the cases, have absolutely no clear understanding of how the financial markets operate and do not comprehend that the investment amount remains theirs at all times. These clients prefer to part forever with the smaller amount than to live in their own "world of uncertainty" about the whole capital. And this is exactly the situation when the scammers strike. Clients from both categories are vulnerable – they are either desperate or financially illiterate. Having paid 300 000 EUR or more upfront (to finance the investment as they think), in more than 90% of the cases, the story ends here. No need to explain further.
Notwithstanding all of the above, we are in no way trying to suggest that the financed option is always a scam – not at all. There are cases when financing of the investment can be both morally and legally justified. We are only trying to warn all potential clients not to be tempted into diving in the deep waters where scammers feel really comfortable.
The "alternative" investment
This is another field of expertise of the scammers. They will offer an alternative sort of investment, not inline with the requirements of the Bulgarian Citizenship by Investment Program. They will often explain you that they have set up a pool of investments and have formed some sort of trust, which fits into the legal framework to be used to apply for the fast-track Bulgarian citizenship. By utilizing their trust arrangement, you can invest less money than is required by the Bulgarian law and if you also pay some irrevocable fee, your citizenship application will be approved. These arrangements are, according to our experience, 100% scam.
The investment amount to be transferred to the agent’s account (or to an escrow account)
This is unfortunately another scam that is being used more and more frequently. The investment, and that is backed by the Bulgarian law, should always remain on the account of the citizenship applicant. If you are asked to transfer the required investment capital to someone else, being the agent or any sort of escrow account, run away!
The "home delivered" Bulgarian passport and ID card
If you are ever told that your citizenship application is approved and you are to receive your Bulgarian passport and ID card delivered to you directly, run away and seek legal advice immediately. All these documents are to be picked up by you personally from the state authorities and they will be never dispatched in another way. If your agent tells you that he will bring them to you or you are to expect DHL delivery, you have been scammed!
Not straightforward scam, but still a no-no...
Below are the main examples of cases when the application procedure will simply not be processed adequately and ultimately your citizenship will be never obtained.
The international posh agent
If you are entrusting your application to an international (non-Bulgarian) agent with no reliable Bulgarian legal backing, no matter how shiny his offices might be, think twice. The citizenship application procedure is comprehensive process that involves different authorities and in-depth knowledge of the Bulgarian legal and administrative codes. We are constantly being contacted by misfortunate customers who have been let down by even the most trustful international entities, such as private banks, etc. (yes, many private international banks are trying to facilitate the process of obtaining Bulgarian citizenship to some of their clients through their legal departments). On top of that, non-Bulgarian agents are in general not licensed in Bulgaria to carry out many of the procedures, required for the successful citizenship application. So, if you prefer to deal with your trusted private bank or local (non-Bulgarian) legal provider, be sure to enquire about their connections in Bulgaria and how reliable these connections are.
The Bulgarian "one-man show" agent
On the other side of the spectrum is the Bulgarian "one-man show" agent. After the boom of the Bulgarian citizenship by investment fever, many local attorneys and consultants started to offer their services to the international clientele. While the Bulgarian agents are in general much better equipped with the required knowledge about the program than their foreign counterparts, the citizenship application procedure, being enough complex, requires the input of a whole organization rather than of a single person. So logically, many have failed to provide the adequate service and many citizenship applications initiated by these entrepreneurs are still hanging in the air. So if you think of hiring Bulgarian law or consultancy company (or even worse, a single Bulgarian consultant/lawyer) and you only meet one or two people from that company (assuming that there are no more), our advice is to think again.
The Bulgarian agent from the middle of nowhere
In Bulgaria everything happens in the Capital Sofia. No matter what, ultimately, all applications, all paperwork is to be processed in Sofia. It is not impossible to provide good service from another town in Bulgaria, but it is much, much more difficult. Even agents from big cities like Plovdiv and Varna are utterly lost when they have to deal with the authorities in Sofia. Nothing is impossible of course, but it should be in your best interest to entrust a centrally located agent in the Capital rather than one from the countryside.