The treatment of foreign investors is stipulated in the Bulgarian Act on Foreign Investment. The guiding principle guarantees foreigners the right to perform economic activity in the country under the same conditions applicable to Bulgarian investors, except where otherwise provided by law. Bulgaria is also a signatory to a system of bilateral treaties on promotion and mutual protection on foreign investments. When international treaties to which Bulgaria is a party provide more favorable terms and conditions for foreign investment, these terms have precedence over the local rules. This guiding rule is applicable to the agreements governing the abstaining of double taxation. Foreign investments are further guaranteed against subsequent legislative changes. Foreign investments made prior to the adoption of amendments in law, which causes an adverse effect, shall not be affected by these restrictions.
The Bulgarian Constitution allows forcible expropriation of property in the name of the state or for municipal needs only if affected by virtue of a law provided that these needs cannot otherwise be met, and after a fair compensation has been ensured in advance. Expropriation under Bulgarian Law is governed by the Law on State Property and Law on Municipal Property. Another protection for foreign investors - the Law requires compensation in the form of other immovable property in the same location, and only if given the foreign investor’s consent, in another location, or by cash if the foreign investor prefers so. Compensation equals the immovable property’s market price on the day of expropriation.
