Bulgaria Golden Visa Funds
Bulgaria Golden Visa Funds offer a unique pathway for non-EU citizens to secure permanent residency—and potentially citizenship—through a regulated investment of 512,000 EUR. These funds satisfy the requirements of the Foreigners Act, the legislation that governs eligibility for Bulgarian permanent residency. By investing in a government-regulated fund that is both incorporated and managed in Bulgaria and focused solely on Bulgarian assets, investors not only gain access to a new country but also tap into the nation’s economic opportunities.
Types of Bulgaria Golden Visa Funds
There are two main types of funds that meet the criteria of the Foreigners Act:
- Exchange-Traded Funds (ETFs)
- Alternative Investment Funds (AIFs)
Each fund type offers a distinct investment approach, with its own benefits and risk profiles.
Understanding ETFs in the Context of the Bulgarian Golden Visa
An Exchange-Traded Fund (ETF) is a type of investment fund that holds assets such as stocks, commodities, or bonds and is traded on stock exchanges. ETFs offer diversification across various sectors and are known for their liquidity and lower fee structures compared to traditional mutual funds. In the context of the Bulgarian Golden Visa, investing in an ETF can be a dynamic and diversified approach to fulfilling the program’s investment requirements.
For Bulgaria Golden Visa purposes, ETFs must invest solely in Bulgarian assets and be managed locally. While many investors are familiar with ETFs like those offered by BlackRock or Amundi that track the S&P 500—historically outperforming gold—Bulgaria Golden Visa ETFs differ. They cannot invest in global indices like the S&P 500; instead, they focus exclusively on the Bulgarian market. This exclusivity can limit diversification, as the Bulgarian Stock Exchange indexes, such as the highly concentrated Sofix index, may expose investors to risks not present in more diversified global benchmarks.
Understanding AIFs in the Context of the Bulgarian Golden Visa
An Alternative Investment Fund (AIF), as defined by EU law, is a collective investment vehicle that pools capital from multiple investors, aiming to invest this collective sum based on a pre-defined strategy for their benefit. AIFs can vary significantly in structure—they can be either open-ended or closed-ended, and may be listed or unlisted on stock exchanges. They often carry higher risk than conventional investments but can yield greater rewards, attracting professional investors. However, some AIFs are designed to mitigate risk and offer stable investment opportunities for Bulgarian Golden Visa applicants while ensuring moderate returns.
Unlike ETFs, AIFs have the flexibility to invest beyond just stocks and bonds. They may target a broader range of opportunities within Bulgaria’s economy, including:
- Construction Projects: Investment in residential or commercial development projects where markups can reach beyond 200%.
- Sector-Specific Ventures: Investments in airport concessions, mineral rights, equity stakes in betting or insurance companies, and other alternative ventures. (The Concession of Sofia airport is taken by the Sof Connect consortium, consisting of the French investment fund Meridiam (99% stake) and Austria’s Strabag (1% stake).
- Innovative Financial Strategies: For example, engaging in pre-market bond purchases where the dirty price is lower than the actual price, thereby securing a high coupon rate—as demonstrated by initiatives from banks like BACB and TBI in Bulgaria.
This flexibility allows AIFs to tailor their strategies to manage risk effectively, even while venturing into sectors that may offer higher returns.
Safety and Regulatory Oversight
A common concern for investors is the safety of their capital. All Bulgaria Golden Visa Funds are rigorously regulated by the Bulgarian Financial Supervision Commission and overseen by the National Security Agency. This regulatory framework ensures that the funds operate transparently and in compliance with both national and international standards.
