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The Treatment of Non-Monetary Contributions

The recent passage by the National Assembly of the Law on Economic Activity of Foreign Persons and on Protection of Foreign Investments represents a major step forward in the nation's efforts to build the legal structures for foreign investment in post-Communist Bulgaria. Many of the perceived shortcomings in the prior Law on Foreign Investment were removed, making Bulgaria more attractive to Western investors.

One area of significant improvement in -the new Law is the deletion of the requirement of a US ,000 cash investment in a commercial firm. Under Article 3, paragraphs (1) and (2) of the Law, foreign investors are permitted to engage in economic activity on the same basis as Bulgarian citizens, with a few limited exceptions. This provision clarifies the right of foreign investors to invest by contributing non-monetary assets to Bulgarian firms. Contributions of this type are permitted under the Law on Commerce for Bulgarian citizens, and this right is now extended to foreigners.

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