Hungarian investment citizenship
In December 2012 the Hungarian Parliament adopted an amendment to the immigration law, which creates a legal framework for the so called „investment citizenship” (investor residency) in Hungary. Likewise some other countries, Hungary has introduced a simplified application for the permanent residence permit in return for purchase of government residency bonds (in Hungarian: államkötvény). Similar institutions already exist, among others in Canada, Spain, Austria, Bulgaria or Cyprus.
Who can apply for the Hungarian investment citizenship?
The „investment citizenship” (permanent residence permit in return for investment) may be granted to the third country nationals (i.e. from outside the European Economic Area, hereinafter: „the foreigners”), meant as individuals or a business entity, in which a foreigner is a majority shareholder. Foreigners applying for investment citizenship in Hungary are expected to invest at least 250.000 EUR in special government residency bonds with a 5-year maturity date. Such investor residency is valid for 5 years, with a possibility to renew it for the next period. It should be bear in mind that the purchase of government bonds does not guarantee an investor the Hungarian citizenship, but the permanent residence permit – the latter, however, allows a foreigner to travel freely within the Schengen zone countries for up to 90 days every six months. A permanent resident enjoys the right to work in Hungary, as well as the right to health service and education system.
Preferential treatment
After the purchase of government bonds, a temporary residence permit will be issued to the foreigner, providing that he or she fullfills all necessary conditions. After 6 months the foreigner will be entitled to apply for a permanent residence permit. According to the Hungarian immigration law, the procedure of application for the „investment citizenship” shall not last longer than 30 days, nevertheless, in practice this might be as long as 2-3 months. According to the ministerial decree of February 2013, the sales of the government bonds will be made exclusively by the Államadósság Kezelő Központ Zrt.. The Hungarian government offers an interest rate for the residency bonds, which is ca 50% lower than in case of other government bonds.
The process of applying for a permanent residence permit in return for purchase of government residency bonds is far more preferential towards the foreigners than the standard procedure. The most important aspect of the investor residency is the fact that the continuous residence of 3 years prior to the application is not required. Moreover, unlike in other countries which offer the possibility of investment citizenship (e.g. Austria, Spain, Bulgaria), Hungary does not require a purchase of real estate. It is sufficient for a foreigner to have a permanent address of residence in Hungary – such as the address of a rented apartment.
The conditions of the acquisition of the „investment citizenship” in Hungary belong to the most advantageous in Europe. In comparison – to obtain investment citizenship in Bulgaria in general at least 500.000 Euro investition in bonds and a purchase of a real estate worth 300.000 Euro is required, in addition to this, opening 10 workplaces and 1-year residency on the territory of Bulgaria. In Cyprus a direct investition of 10 mln Euro is required and a purchase of a real estate worth at least 500.000 Euro.
If you are interested in applying for an investment citizenship, i.e. permanent residence in Hungary, please do not hesitate to contact our lawyers at: izabela.kislow@bisztrai.com or gabor.bisztrai@bisztrai.com.
March 2013
Bisztrai Law Firm