There may be light at the end of the tunnel for expatriates operating small and medium-sized businesses in Bulgaria.

There has been widespread concern lately over changes to the Law on Foreigners. It states that foreign business owners must employ at least 10 Bulgarians for every non-Bulgarian worker. The law was changed at the end of April and affects many members of the expatriate community who previously qualified for residency but no longer do. As a result, some may have to shut down their businesses.

At a press conference Wednesday Economy Minister Nikolai Vassilev said that foreign investment is the most important factor to the country and the new government is dedicated to increasing the level of money coming into the Bulgaria. "We know about the problems foreign investors have - we heard from them about those problems. We will amend this law as soon as possible, but I can't give an exact date."

One company which will find this statement welcome news is Rainbow Clothing Agency. It employs eight Bulgarians and services clothing companies in Holland and Ireland. The company takes clothing orders for its clients and manufactures them in Bulgaria, for price and quality reasons.

Rainbow brings over five million leva into the Bulgarian economy but under the changes to the law it will either have to shut down or employ 10 locals on its staff. "My business doesn't need 10 people with the size I have right now. I don't need any more people," said Elly Hennessy, who owns and operates Rainbow. She said that while her and her husband Mike are planning to be in Bulgaria for the long-term, the changes to the Law on Foreigners are proving to be quite difficult.

Currently, Hennessy has gotten a three-month extension for her residence permit, but unless the changes, the best she can hope for is to continue getting three-month extensions for her and her husband - an exercise which costs 400 leva each time they do it.

Mark Thomas, the owner of Jamadvice BTI travel agency, now has permanent residency in Bulgaria but said that his company, which provides services for the expatriate community, could only recently be able to employ a foreigner. "We've been here, in our 10th year of operation, and have only this year reached 10 people. As one of the leaders within the industry, it's taken almost 10 years to warrant 10 employees."

A slightly different case is with the Bulgarian office of Seagram. The company has a turnover of several million dollars per year locally yet only employs four staff. Seagram, however, is set up as a representative office and the law does not affect them as long as they do not collect revenue in Bulgaria.

But Andrew Sowray, general manager of Seagram Bulgaria, said that getting a residency permit still proves to be a large obstacle. He applied over four weeks ago to renew his residency and has been told that he may have to wait another three to get it. "I think it is too long and obviously too bureaucratic a system," said Sowray, who has been in Bulgaria for three years. "They clearly have all my details on their system but they treat me like a first-time applicant."

In the past month he has been to the passport office in Sofia three times while his office manager has made eight trips there. "The other thing is they have no respect for your time," he said.

Laura Thomas, the owner of LM Services, a legal firm that arranges residence permits for foreigners, said that companies like Seagram can set up a representative office and one foreign manager will receive permission to stay in the country. Any other foreign employees would have to apply for a work permit and the company would therefore need to have 10 Bulgarian staff.

She said that the laws on foreigners contain many contradictory elements. For example, a company with a foreign manager must declare it is training a local person to become a manager. "Unofficially, nobody respects this," she said. "Everybody implements whatever they want."

Another part of the Law on Foreigners states that new foreigners coming to the country must register with the police within 48 hours of arrival. For those staying in hotels, this law is not of major concern as the hotels will register their guests, but for those staying in private accommodations they must either have their host register, or they must do so themselves.

Hennessy said that the law is surprising for a country which is getting closer to the EU because it is a step back toward communist-style legislation. "The 48-hour thing is like Bulgaria going back into the stone age."

A spokesperson from the Interior Ministry said this part of the law is very unlikely to be amended. They said the reason is that this regulation is a common practice and, according to them, it exists in most of the countries worldwide and there is no reason for it to be lifted.