Rules and Regulations
for the Implementation of the Act on Encouraging Investment
Prom. SG. 74/24 Aug 2004, amend. SG. 34/19 Apr 2005
Chapter one
GENERAL PROVISIONS
Art. 1. These Rules and Regulations set forth the terms and procedures for the implementation of the Act on Encouraging Investment (AEI) with regard to encouraging investments to
Art. 2. (amend.- SG 34/2005) According to their size investments shall fall into three classes:
1. first class - investments over BGN 70 million.
2. second class - investments from BGN 40 million to BGN 70 million, and
3. third class - investments from BGN 10 to 40 million.
Art. 3. The investment shall be considered realized upon carrying out the investment plan.
Chapter two
CERTIFICATE FOR INVESTMENT CLASS. INVESTMENT PLAN
Section І
Procedure for issuance and content of the certificate for investment class
Art. 4. (1) Certificate for investment class shall be issued by the Executive Director of the InvestBulgaria Agency (IBA) or thereby authorized official as based on investor Request.
(2) the following documents shall come enclosed with the Request:
1. investment plan;
2. if the Requestor is a legal entity registered in the
a) a court certificate of incorporation;
b) annual financial reports for the past three years, verified by registered auditors under the terms and conditions of the Independent Financial Audit Act, with auditor reports thereon. A branch shall additionally enclose the annual financial reports for the past three years of the foreign person, auditor verified in compliance with its national legislation, with auditor reports thereon;
c) investment projects carried out so far, if any;
d) documents to certify capacity for project financing;
e) (amend.- SG 34/2005) declaration for the origin of the financial resources in the form set by the Executive Director;
f) document to certify absence of liquid and due tax liabilities and mandatory security contributions as at the moment of filing the Request in compliance with its national legislation.
3. if the Requestor is a foreign legal person:
a) a registration document as per its national legislation;
b) annual financial reports for the past three years, auditor verified, with auditor reports thereon;
c) investment projects carried out so far, if any;
d) documents to certify capacity for project financing;
e) (amend.- SG 34/2005) declaration for the origin of the financial resources in the form set by the Executive Director;
f) document to certify absence of liquid and due tax liabilities and mandatory security contributions as at the moment of filing the Request in compliance with its national legislation.
4. if the Requestor is a natural person:
a) a copy of its identification document;
b) investment projects carried out so far, if any;
c) documents to certify capacity for project financing;
d) declaration for the origin of the financial resources in the form set by the Executive Director;
e) (amend.- SG 34/2005) document to certify absence of liquid and due tax liabilities and mandatory security contributions as at the moment of filing the Request in compliance with its national legislation.
5. (new – SG 34/2005) if the Requestor is a group of some of the subjects under items 2, 3, and 4, the documents shall be submitted for each of the participants in the group.
(3) (new – SG 34/2005) If the Requestor is a foreign person or group in which a foreign person participates, all documents in foreign language shall be submitted translated in Bulgarian as well.
(4) (new – SG 34/2005) The ability of the Requestor to fund the project shall be certified by the following documents:
a) loan agreements
b) contracts for financial leasing;
c) bank and other guaranties;
d) letters of commitment for funding the project by the owners of the capital;
e) other documents.
Art. 5. (1) An investor request filed, the Executive Director, or thereby authorized official shall appoint the Agency staff to examine the investment plan and thereto enclosed documents.
(2) (new – SG 34/2005) In cases when an assessment of other competent state body is required due to the specificity of the investment plan InvestBulgaria Agency shall send the respective documentation and shall request presentation of a statement within 7-days period from the receipt of the request.
(3) In virtue of the examination the authorized persons shall prepare an opinion on the investment conformity with the terms and conditions of Art.12 of the IEA and the investment class pursuant to
Art. 2 of the present Rules.
(4) In virtue of the opinion thus prepared, the Executive Director, or thereby authorized official, shall issue a certificate for investment class within one month of the filing of the Request.
(5) If the investment plan does not meet the requirements pursuant to Art. 10, or not all required documents have been presented, the Agency staff shall advise the investor in writing of correcting the admitted irregularities, within time lines under
Art. 6. The Executive Director, or thereby authorized official shall refuse to issue a certificate in case:
1. the requirements in compliance with Art. 4 have not been fulfilled;
2. the investment does not conform with the terms and conditions of Art. 12 of the law, or Art. 2 of the present Rules.
3. (new - SG 34/2005) if convincing evidences regarding the abilities of the person to fund the project have not been submitted.
Art. 7. (1) The Certificate shall comprise the following requisites:
1. serial number;
2. if the Requestor is a legal entity or sole-trader registered in the
3. the class of investment;
4. investor’s rights as per the law;
5. date of issuance;
6. signature of the Executive Director, or thereby authorized official and the Agency stamp.
(2) The Certificate shall be deemed valid until the expiry time specified in the investment plan for investment realization.
(3) The validity of the Certificate may not exceed three years from the date of its issuance.
Art. 8. (1) The Certificate shall be issued in duplicate – one to be preserved at IBA, and the other – presented to the investor.
(2) The Certificate and the documentation under Art. 4 shall be preserved as provisioned in the State Archive Stock Act.
Section ІІ
Investment plan
Art.9. (1) The investment plan shall contain the following requisites:
1. if the Requestor is a legal entity or sole-trader registered in the
2. purpose of investment pursuant to Art. 12 of the IEA;
3. cash amounts to be invested in long-term fixed assets acquisition;
4. itemization of expected profits and losses;
5. expected cash flow breakdown;
6. sources of financing;
7. expected staff number – at the beginning of investment plan performance, as well as its expected increase in the process of its performance, the requirements for personnel’s professional qualification, and expected spending on staff qualification training and re-training programmes;
8. determining the place where the enterprise will be built or production equipment localized. Splitting of the investment into many individual projects/sites on different locations is not allowable;
9. type of equipment and facilities, as well as size in square meters of the area where they will be built: manufacturing facility, store houses, administrative buildings, etc.;
10. information regarding the planned construction of new buildings, leasing, or buying existing ones;
11. stages in the performance of the investment plan and the cash resources to be allocated for each stage.
Art.10. (1) IBA staff shall be obliged not to reveal the information under Art. 9, which they have become familiar with in relation to the performance of their official duties;
(2) IBA staff shall sign confidentiality declaration in a form established by the Executive Director.
Chapter three
INDIVIDUAL ADMINISTRATIVE SERVICING PROCEDURE
Section І
Relationships between the Investor and the Agency staff
Art. 11. (1) Individual administrative servicing shall be initiated by Request of an investor having received a Certificate for first or second class investment.
(2) The Request shall be filed in person, or by an investor authorized representative, with the InvestBulgaria Agency in writing following a form established by the IBA Executive Director.
(3) The Request shall be filed in an entry register, noting down the date it is received.
(4) The individual administrative servicing shall be provided by the Agency free of charge. Fees as legally set forth for the issuance of documents and/or performing an administrative service shall be for the investor account.
Art. 12. Over each filed Request official staff shall be designated by the Executive Director, or thereby authorized person, to carry out the individual administrative servicing needed for the realization of the investment plan.
Art. 13. The appointed staff shall prepare and provide the investor with complete and accurate information on all administrative procedures over the fulfillment of an investment plan, including necessary documents, set forth deadlines and fees, as well as the bank accounts of the respective competent authorities.
Art. 14. The investor shall present the necessary documents, including documents for paid fees and shall authorize the appointed official Agency staff to obtain from the respective competent authorities all required documents for the performance of an investment plan.
Section ІІ
Relationships between the Agency staff and the officials from the competent administrative authorities. Obligations of the competent administrative authorities’ officials.
Art. 15. The individual administrative servicing shall be carried out by specifically designated Agency staff in collaboration with the officials under the respective administration, as per the list of names pursuant to § 27, para 2 of the Act on the Amendment of the Foreign Investments Act (State Gazette, iss. 37/2004/Amendment and Supplementation Act of the Foreign Investments Act)
Art. 16. To carry out the individual administrative servicing the authorized Agency staff shall prepare a Request to the competent authorities for the initiation of the respective administrative procedures and shall provide the necessary documents to the respective administration officials, on the list under § 27, Para 2 of the Act on the Amendment of the Foreign Investments Act.
Art. 17. The respective administration officials shall be obligated to cooperate fully with the Agency’s staff in the preparation of the necessary documents for the initiation of administrative proceedings, via:
1. providing relevant information on the administrative procedures in their administrative competence - needed documents, time lines, fees, bank accounts, etc., duly informing about subsequent changes to them;
2. securing continuous and unconditional access to all administrative acts and forms, and cooperating in the completion of documents;
3. advising immediately about needed elimination of irregularities and/or provision of further information or documents;
Art. 18. (1) The officials from the respective administration shall carry out all due official action for the initiation and execution of the respective administrative procedures as their official duty, unless it has been required by the law that a Request shall be made by the interested person in person, or its representative.
(2) Whenever, for carrying out the respective administrative procedures it is necessary to obtain documents to be issued by other administrative authorities, the officials shall officially request them, unless provisioned by law that the Request shall be made by the interested party in person, or by its representative.
(3) In cases pursuant to Para 2, the authority having issued the document shall officially send that to the administrative official in whose competence it is to issue the final document.
(4) Upon issuance of the needed documents the respective administrative officials shall advise the IBA staff of their receipt.
Art. 19. (1) The issuance of a document an/or the provision of an administrative service on the part of the competent authority may be denied by means of a motivated act statement also stating the terms and the procedure for its appeal.
(2) The authorized Agency staff shall be immediately notified of the denial.
(3) No opinion expressed within the time set shall be considered tacit consent in the cases and under the terms and conditions provisioned by the Law on the reduction of administrative regulation and administrative control over the economic activity.
(4) Upon non-compliance of time lines pursuant to Art. 15 of the law the Agency staff authorized under Art. 35 Para 1 of the law shall prepare an act statement of establishment of administrative violation.
Art. 20 (new - SG 34/2005) (1) For a first-class investment, the Minister of Economy shall table at the Council of Ministers an offer for encouragement of an investment plan under Art.20 of the Encouragement of Investment Act if the presence of the following requirements:
1. the investor of who has received a certificate has not entered in insolvency or liquidation procedure;
2. the investor funds the project with not less than 25% own capital, in which the state aid is not included.
3. evidences for compliance of the project with the ecology requirements of the national legislation
4. project and technical documentation which shall be prepared by the ministry executing the state functions, regarding the relevant infrastructural element and also plans for construction of the elements of the technical infrastructure.
(2) Documentation under item 4 shall be prepared upon request of the Minister of Economy within 1 month from the investor’s request.
(3) The Minister of Economy shall assess the investment plans on the grounds of pre-approved by him/her and announced in public methodology under the following criteria:
1. proportion between the amount of the investment and the needed funds for constructing the technical infrastructure;
2. the number of the new job positions opened related with the investment;
3. criteria of additional index of significance;
a) investments in high-technological production and services
b) investments in other productions besides these under item ”a”;
c) investments in regions/municipalities of higher than the average for the country unemployment, that open and maintain more than 100 job positions for a period not shorter than 5 years.
Chapter four
Extension of resources for building elements of technical infrastructure
Art.21. (1) In case of extension of state funds resource for the building of elements of the technical infrastructure, by decision of the Council of Ministers the Minister of Economy shall be authorized to conclude a contract with the investor having received a certificate for first class investment, for building elements of the technical infrastructure in relation to the realization of an investment project within the real estate borders.
(2) This contract shall obligate the investor to accomplish the investment plan, and the state – to secure the building of the technical infrastructure elements related to the realization of the investment plan within the real estate borders.
(3) The contract shall necessarily contain:
1. subject of contract
2. time lines for the realization of the investment plan
3. key rights and obligations;
4. the type and size of guarantees for the performance of contract obligations;
5. the type and size of liability over non-performance of contract obligations;
6. control over the performance of obligations by the parties;
7. manners of settling differences of opinion between the parties;
8. grounds for early contract termination and the rights of the non-defaulting party;
9. other elements on which agreement between the parties has been reached.
(4) The investment plan shall be an indispensable part of the contract.
Art. 22. (1.) Upon extension of state resources for building elements of the technical infrastructure, needed for the realization of an investment plan within the real estate borders, the investor shall present a bank guarantee to the amount of the funds extended.
(2) The bank guarantee shall be presented as a collateral for the actual cash expenses made for building the elements of the technical infrastructure.
(3) The time the guarantee amount is released shall be specified in the contract depending on the type and specificity of the production or service specificity, yet not until 50% of the envisioned investment plan amount has been deposited.
Art. 23. (1) Upon extension of state resources for building elements of the technical infrastructure, the Council of Ministers, by force of a decision shall authorize the minister performing the state functions in regard to the respective infrastructure element, to conclude a contract with the person who is to build the connecting infrastructure.
(2) The Contract under para.1 shall contain:
- subject of contract;
- time lines for the realization of the infrastructure project;
- stages of site development and cash resources envisioned for each of them;
- key rights and obligations;
- the type and size of guarantees for the performance of contract obligations;
- the type and size of liability over non-performance of contract obligations;
- control over the performance of obligations by the parties;
- manners of settling differences of opinion between the parties;
- grounds for early contract termination and the rights of the non-defaulting party;
- other elements on which agreement between the parties has been reached.
(4) the investment plan shall be an indispensable part of the contract.
SUPPLEMENTARY PROVISION
& 1. The high-technological productions and services shall be determined as per the Statistic Classificatory of the Economical Activities of the European Union to which responds this of the National Statistic Institute – NKID 2003 under the existing classification of EUROSTAT and OISR
& 2. Classified information shall be provided as per the terms and conditions of the Classified Information Protection Act.
CONCLUDING PROVISIONS
& 3. The Rules and Regulations shall be adopted in virtue of & 28 of the Transitional and Final Provisions of the Amendments and Supplements to the Foreign Investment Act (SG, iss. 37 of 2004).
& 4. The Rules and Regulations shall be effected starting the day of its promulgation in “State Gazette”.
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