Hungary offers a unique opportunity for non-EU nationals to gain residency through investment. Over the years, the options for this program have evolved, with the current focus being on real estate investment and business formation. This program is a gateway for individuals and their families to enjoy the benefits of residing in an EU country.
Hungary residency by investment: an overview
The Hungary residency-by-investment program is a strategic initiative designed to attract foreign investments into the country.
Before 2017, Hungary offered the Hungarian Residency Bond program, where investors needed to commit a minimum of €300,000. After a five-year period, this capital was returned in its entirety without any returns. However, Hungary has since revamped its approach.
The country now offers a unique opportunity to gain residency through a more straightforward and cost-effective method.
By investing in real estate or establishing a business, non-EU nationals can obtain a temporary residency visa. This visa allows them to live in Hungary and offers the freedom to travel within the EU and Schengen area.
The process of gaining residency through real estate investment
One of the primary pathways to obtaining residency under this program is through real estate investment.
Applicants can secure a temporary residency visa by purchasing property in Hungary, specifically in its capital, Budapest. The application process is typically swift, and once approved, the investor is required to make the investment.
Over time, and by adhering to specific regulations and requirements, this temporary residency can be upgraded to a permanent one.
Upgrading from temporary to permanent residency
The temporary residency visa, once granted, is the first step towards establishing a more permanent presence in Hungary. By complying with the program’s regulations and maintaining the investment, applicants can eventually transition to a permanent residence visa.
This progression underscores the program’s commitment to long-term relationships with investors and their potential contributions to the Hungarian economy.
Benefits of becoming a resident of Hungary
Visa-free travel within the EU and Schengen area
One of the standout advantages of obtaining Hungarian residency is the privilege of visa-free travel within the European Union and the Schengen area. This benefit provides residents with unparalleled access to numerous countries, fostering both personal and business opportunities.
Tax benefits: corporate and personal income tax rates
Hungary boasts some of the most competitive tax rates in Europe. Corporate income tax stands at a mere 9%, the lowest in the EU, while personal income tax is 15%. These favourable rates can lead to significant savings and make Hungary an attractive destination for businesses and individuals.
No tax on dividends and capital gains
Further enhancing its appeal as a financial haven, Hungary does not impose taxes on dividends and capital gains.
This policy can result in substantial financial benefits for investors and entrepreneurs, especially those with significant holdings or business operations.
Healthcare, cost of living, and safety
Hungary offers an efficient and affordable healthcare system, ensuring residents receive quality medical care without the exorbitant costs found in some other European nations. Additionally, the cost of living in Hungary is relatively low, allowing for a comfortable lifestyle.
The country also prides itself on its high safety levels, ensuring a secure environment for its residents.
Real estate affordability in Hungary, especially Budapest
Hungary presents a lucrative market for investors specifically interested in the real estate pathway. Real estate prices, especially in Budapest, are considerably lower than in most European cities.
This affordability means investors can secure prime properties at a fraction of the cost they might incur elsewhere.
Education: Free public and international schools
Families considering the move to Hungary will be pleased to know that the country offers free public and international schooling in Budapest. This provision ensures that children receive a quality education without the burden of hefty school fees.
Public transport and natural beauty
Hungary’s public transport system is renowned for its efficiency and coverage. Whether in the bustling city of Budapest or the serene countryside, residents can easily navigate their surroundings.
Speaking of the countryside, Hungary is home to pristine forests, majestic mountains, and picturesque landscapes, making it a haven for nature enthusiasts.
Presence of international companies in Budapest
Budapest, Hungary’s capital, is not just a cultural and historical hub – it’s also a thriving business centre.
Numerous international companies have established their bases here, offering residents ample employment and business opportunities.
Hungary residency-by-investment options
Real estate investment requirements
The real estate pathway is a popular choice for many applicants of the Hungary residency-by-investment program. To qualify, an individual must invest a minimum of HUF 56 million (approximately EUR 150,000) in residential real estate, preferably in Budapest.
This investment should be channelled through a property company established in the applicant’s name.
Given the average property prices in Hungary, this amount can secure a substantial property or even multiple units, which can be considered for rental purposes.
Investment amounts and associated fees
Apart from the property investment, there’s an additional program fee of EUR 65,000. This fee covers various administrative and processing costs associated with the residency application.
It’s essential to note that this is separate from other business and investment expenses that might arise during the application process.
When budgeting for the program, applicants should factor in both the property investment and the program fee to get a comprehensive understanding of the total financial commitment.
Residency in Hungary by residential real estate investment
Opting for residency through residential real estate investment is a straightforward process. Applicants can swiftly obtain their residency visa by investing the stipulated amount in Budapest’s real estate market.
This visa not only grants them the right to live in Hungary but also offers the potential for rental income, given the vibrant property market in the capital city.
The program also mandates a fee of EUR 65,000, which covers various administrative aspects of the application.
Eligibility requirements for the program
Age and education prerequisites
To be eligible for the Hungary residency-by-investment program, applicants must be at least 18 years old and need to have completed a minimum of 12 years of education.
This foundational requirement ensures that applicants have a basic educational background, which will be beneficial for their integration and potential business endeavours in Hungary.
Requirements related to business establishment and operation in Hungary
One of the program’s core requirements is establishing a locally registered company with an active Hungarian bank account. This company serves as the primary vehicle for the real estate investment.
Additionally, applicants must demonstrate trading activity, either within Hungary or internationally, supported by a robust and financially sound business plan.
This requirement underscores the program’s intent to attract genuine investors and entrepreneurs who can contribute to Hungary’s economy.
Accommodation and insurance requirements
All applicants must have accommodation in Hungary, irrespective of their investment pathway. This can either be the property they’ve invested in or a rented space. Furthermore, full travel insurance is mandatory for the primary applicant and any accompanying family members. This insurance should cover any potential health or travel-related contingencies during their stay in Hungary.
Health and criminal record checks
The program strongly emphasises the character and background of its applicants. As such, all applicants must undergo health checks and declare any severe health conditions.
Additionally, a clean criminal record is essential and must be verified by a certificate from the applicant’s local authority or police department. This ensures that the individuals entering Hungary through this program are of good standing and pose no threat to the country’s safety or reputation.
Declarations related to other Schengen country residencies and previous applications
Transparency is key when applying for the Hungary Residency by Investment program. Applicants must declare if they hold a valid residence permit in another Schengen country. Additionally, any previous residency applications to Hungary, whether rejected or the applicant was ever expelled from the country, must be disclosed. This information helps the Hungarian authorities make informed decisions and ensures the integrity of the program.
Step-by-step application process
Initial document submission and due diligence
The application journey begins with the submission of all required documents for due diligence testing. This step ensures that all applicants meet the program’s stringent criteria and that their intentions align with the program’s objectives.
Application fee transfer
Once the initial documents are submitted and approved, applicants are required to transfer the application fee. This fee covers the administrative costs associated with processing the application and conducting the necessary checks.
Trips to Hungary for applying and purchasing property
A personal visit to Hungary is essential for the application process. During this visit, applicants submit their application for a temporary residence visa. At this stage, they must also make a declaration committing to purchase property in Hungary with a minimum value of HUF 56 million (approximately EUR 150,000) within three months from the date the residence permit card is issued.
Timeline and property requirements
After submitting the application, there is typically a waiting period of four to six weeks. Once approved, applicants are notified and must make a second trip to Hungary.
This visit involves receiving the Hungarian ID card and selecting the property for purchase. The main applicant must then finalise the property purchase within the stipulated three-month window.
The chosen property should be residential, completed, and of sufficient size to accommodate the applicant and any family members included in the application. It’s crucial to note that the property cannot be rented out and must solely be occupied by the applicant and their family.
Property purchase and communication with Hungarian immigration authorities
Upon finalising the property purchase, applicants must sign a real estate sale and purchase agreement. A copy of this agreement must be shared with the Hungarian immigration authorities to confirm the investment.
This step is crucial, as it verifies the applicant’s commitment to the program and their investment in Hungary’s real estate market.
Residency conditions and property occupancy
The property purchased under the Hungary residency-by-investment program comes with specific conditions. It should be immediately usable as the official address of the applicant.
Furthermore, the property must meet a minimum size requirement, ensuring a comfortable living space for the applicant and their family.
As mentioned earlier, renting out the property is not permitted, and the applicant and their family should be the sole occupants.
Required documents for application
Photocopies of all applicants’ passports
Every application begins with the submission of clear photocopies of all applicants’ passports. These documents serve as primary identification and are essential for the due diligence process.
Two passport photos for all applicants
In addition to the passport photocopies, two recent passport-sized photos for each applicant are required. These photos should adhere to standard passport photo guidelines, ensuring clear visibility of facial features.
Personal data sheets and CVs
Each family member included in the application must complete a data sheet providing essential personal details. Additionally, CVs for each person are required to offer a comprehensive view of their educational and professional backgrounds.
Proof of financial stability and investment capability
Applicants must provide evidence of their occupation, income, and savings to demonstrate the ability to make the required investment and sustain living expenses in Hungary.
This proof can be in the form of employment contracts, business ownership documents, or other relevant financial statements.
Recent bank statements
Bank statements provide a snapshot of an applicant’s financial health. The program requires recent bank statements from the main applicant’s account, not older than 30 days and covering the previous six months.
These statements should be signed and stamped by the relevant bank officer and presented in English. Importantly, these statements should clearly show the availability of funds for the property investment and living expenses.
Certified copies of relevant personal documents
Any relevant personal documents, such as marriage or birth certificates, that support the application or the inclusion of family members must be submitted. These documents should be certified copies, ensuring their authenticity.
Declaration of financial commitments
Applicants must provide a detailed breakdown of their financial commitments to ensure transparency and gauge their financial capability.
This includes showcasing the availability of funds for the property investment and an additional HUF 6 million (approximately EUR 20,000) per family member to cover living costs in Hungary.
Minimum investment details
Breakdown of total costs and property investment amounts
While offering numerous benefits, the Hungary residency-by-investment program requires a significant financial commitment from applicants. Understanding the breakdown of these costs is crucial for potential investors to make informed decisions.
Program fee
The program mandates a fee of EUR 65,000. This fee encompasses various administrative and processing costs associated with the residency application. It is essential to note that this fee is separate from the actual investment in real estate or any other associated expenses.
Residency by real estate investment path
For those opting for the real estate investment pathway, a minimum investment of approximately EUR 150,000 in property is required. This amount should be directed towards residential real estate, preferably in Budapest. Given the average property prices in Hungary, this investment can secure a substantial property, potentially in prime locations within the capital city.
Additional expenses
Apart from the program fee and the property investment, applicants might encounter other expenses. These could include legal fees, property registration charges, and any costs associated with setting up and operating a company in Hungary, if that’s the chosen investment route.
FAQs
Language requirements for the program
There is no requirement to speak Hungarian for the temporary residency-by-investment schemes. However, if an individual is pursuing citizenship, which is theoretically possible after eight years of permanent residence, they must be fluent in Hungarian to qualify.
Duration of the temporary residency visa
The temporary residency visa obtained through the investment program is typically valid for a specific period. After adhering to the program’s regulations and requirements, this temporary visa can be upgraded to a permanent one, further solidifying the investor’s ties to Hungary.
Is the investment refundable?
The investment made in real estate is not a donation but a genuine property purchase. This means that the property remains under the ownership of the investor. Depending on market conditions, investors can choose to sell their property in the future, but it’s essential to consider any regulations or stipulations set by the program.
Can family members be included in the application?
Yes, the main applicant’s spouse and children under 18 can be included in the visa application. Once approved, they will also be eligible for benefits like free local healthcare and education in Hungary.
What happens after the temporary residency period ends?
After the temporary residency period, investors can upgrade to a permanent residency visa, as long as they adhere to the program’s regulations and maintain their investment. This progression offers long-term benefits and a more established presence in Hungary.
Conclusion
The Hungary Residency-by-investment program offers a unique opportunity for non-EU nationals to establish a foothold in Europe.
With its competitive tax rates, affordable real estate market, and the promise of visa-free travel within the EU and Schengen area, the benefits are manifold.
Beyond the tangible advantages, living in Hungary offers a blend of rich cultural experiences, safety, and a high quality of life.
