Alternative investment funds in Bulgaria may require manager registration or full FSC authorisation depending on assets, leverage and redemption terms. This guide also covers 2026 changes and marketing.
Vassilev & Chisuse Law Firm · 2026-10-12 · Legal review: 12 October 2026
Setting up an alternative investment fund in Bulgaria requires a distinction between the fund itself, the entity managing it and the way interests in the fund will be offered to investors. Bulgarian law applies different regimes depending on the assets under management, leverage, redemption terms, investor category and whether the manager operates only in Bulgaria or across the European Union.
In 2026 the Bulgarian framework was materially amended. Changes effective from 7 August 2026 expanded the rules on alternative investment fund managers, delegation, liquidity-management tools, loan-originating funds, supervisory reporting and the legal forms available for certain open-ended funds. A new project should therefore be structured against the current law rather than older AIFMD summaries.
An alternative investment fund is a collective investment undertaking that raises capital from a number of investors with a view to investing it in accordance with a defined investment policy for the benefit of those investors and is not required to be authorised as a UCITS. The legal form and investment strategy may vary, so the regulatory analysis should start with the substance of the arrangement rather than its commercial label.
Private equity, venture capital, real estate, private credit and other investment structures can fall within the alternative investment fund framework where the statutory elements are present. Conversely, an ordinary holding company or joint investment arrangement is not automatically an alternative investment fund merely because several investors participate.
The Financial Supervision Commission is the competent Bulgarian authority for licensing and registering persons managing alternative investment funds. A Bulgarian manager must determine whether it is subject to full authorisation or the lighter registration regime for managers below the statutory thresholds.
The regulatory status of the manager is separate from the legal form of the fund. Creating a company or contractual fund does not by itself satisfy the manager's regulatory obligations.
A Bulgarian person directly or indirectly managing alternative investment funds must obtain a licence where the aggregate value of the assets under management exceeds EUR 100 million, including assets acquired through leverage. A higher threshold of EUR 500 million applies where the portfolios consist of alternative investment funds that do not use leverage and in which no redemption right may be exercised for five years from the date of the initial investment in each fund.
These thresholds are manager-level thresholds. Where one manager manages several funds, the assets are considered in aggregate in accordance with the statutory rules. Structures should not be divided artificially between vehicles in order to avoid the applicable regime.
A manager whose assets under management do not exceed the statutory thresholds is generally subject to registration with the Financial Supervision Commission rather than the full authorisation regime. The manager must file the information and documents required for entry in the Commission's register and comply with the ongoing obligations applicable to registered managers.
Registration is not the same as being outside financial regulation. The manager remains subject to the Bulgarian alternative investment fund framework, including regulatory information and reporting requirements, and must monitor whether growth in assets causes the applicable threshold to be exceeded.
The 2026 amendments introduced significant changes to the Bulgarian legislation on collective investment undertakings and alternative investment funds. The Financial Supervision Commission has highlighted changes to the scope of activities and services of management companies and alternative investment fund managers, new requirements for persons managing and representing those entities, and new rules on delegation and sub-delegation.
The amendments also introduced a dedicated framework for liquidity-management tools for open-ended alternative investment funds, specific rules for loan-originating funds, expanded supervisory reporting and a new legal form for an open-ended alternative investment fund organised as a contractual fund.
These changes are particularly relevant when selecting the structure and operating model of a new fund. An older template based only on the original AIFMD implementation may no longer reflect the current Bulgarian requirements.
Bulgarian law accommodates alternative investment funds with different redemption structures, subject to the applicable legal form and regulatory requirements. Whether the fund is open-ended or closed-ended affects liquidity management, redemption rights, valuation processes and, in some cases, the regulatory treatment of the vehicle.
The 2026 amendments are especially relevant for open-ended funds because they introduced a specific framework for liquidity-management tools. The fund documents and operational arrangements should therefore reflect how liquidity stress, subscriptions and redemptions will actually be managed.
The 2026 amendments introduced a specific Bulgarian framework for alternative investment funds that originate loans. A private-credit strategy should therefore be assessed not only under the general rules for alternative investment funds but also under the dedicated requirements for loan origination, risk management and the other conditions introduced by the amended legislation.
The exact structure depends on the proposed lending activity, borrower profile, concentration, leverage and liquidity. Separate rules governing lending, consumer credit or other regulated financial activities may also be relevant depending on the model.
Delegation is possible only within the statutory framework and does not remove the manager's regulatory responsibility. The 2026 amendments strengthened and updated the rules on delegation and sub-delegation of functions, activities and services by alternative investment fund managers.
A delegation arrangement should therefore be assessed for the delegate's competence, conflicts of interest, supervision, information access and the extent to which the manager retains sufficient substance and control. Contractual outsourcing cannot turn the manager into an entity that no longer genuinely performs its regulatory role.
Marketing is a separate regulatory question from the formation of the fund. The Bulgarian rules distinguish between offers to professional investors and offers to retail investors, and between Bulgarian, EU and third-country funds and managers.
The Financial Supervision Commission's current guidance confirms that the AIFMD notification framework applies to offers to professional investors. Where interests are offered to retail investors, additional Bulgarian requirements apply, including the rules applicable to national investment funds in the situations specified by law.
A fund should therefore determine its target investor base before launch. Offering documents, distribution arrangements and investor eligibility controls should be consistent with the regulatory route chosen.
An authorised Bulgarian alternative investment fund manager can use the EU notification framework to market qualifying EU alternative investment funds to professional investors in other Member States, subject to the conditions and procedure under the Bulgarian legislation implementing AIFMD.
The Financial Supervision Commission acts as the home authority for the notification process. Cross-border marketing should be planned with the fund launch because the documents, jurisdictions and distribution arrangements form part of the regulatory workstream.
The manager should be able to explain the ownership and governance structure, investment strategy, target investors, assets under management, leverage, redemption model, valuation, risk management, delegation, depositary arrangements where applicable, conflicts management, reporting and distribution plan. The documents should describe one coherent operating model.
Where the project is below the licensing thresholds, the registration application should still be approached as a regulated filing rather than a simple corporate registration. Where full authorisation is required, governance, capital, substance and organisational requirements become more extensive.
The decision follows from the statutory thresholds and the proposed operating model, not from preference alone. A manager below the relevant assets-under-management threshold can generally use the registration route, while a manager above it requires full authorisation. The use of leverage and the availability of redemption within five years determine which threshold is relevant.
Growth should also be considered. A structure expected to cross a threshold shortly after launch may benefit from planning the future licensing transition from the beginning rather than redesigning governance and documentation later.
Vassilev & Chisuse Law Firm advises fund sponsors and managers on the structuring, registration, licensing and distribution of alternative investment funds in Bulgaria. Our work can cover regulatory classification, fund and manager structure, governance, offering documentation, investor eligibility, delegation and cross-border marketing.
For related regulatory matters, see our Alternative Investment Funds, Banking and Finance and Capital Markets practices.
This article reflects the Bulgarian regulatory framework reviewed as of 12 October 2026 and is provided for general information only. It does not constitute individual legal or investment advice. The applicable regime depends on the fund structure, manager, assets under management, leverage, redemption rights, investor category, distribution model and other facts of the project.