Guest Investor Program in Hungary

Explore the extensive benefits offered by the Hungarian guest investor program through our comprehensive article. Discover how this program can provide unique advantages and opportunities for investors seeking residency and business ventures in Hungary.

Moving to Hungary: what sets apart short-term and permanent stay?

The provisions of the act on the general rules of entry and residence of third-country nationals shall enter into force in several phases, but most of the provisions shall be applicable from 1 January 2024. Under the provisions of the legislation currently in force, a distinction shall be made between short-term and permanent or long-term stay.

The key distinction between the two categories can be summarized as follows:

  • Short-term stay: A short-term stay shall be a stay in Hungary of less than ninety days within a period of one hundred and eighty days.
  • Permanent stay: A permanent stay in Hungary shall be any stay in Hungary exceeding ninety days within one hundred and eighty days.

Third-country nationals can stay in Hungary permanently for business or investment purposes as self-employed guests or as guest investors. A guest investor residence permit can be referred to as a golden visa, which is a common expression in international jargon, although the legislation does not use this term.

The rules regarding the residence permit offered to guest investors will not enter into force until later, on 1 July 2024. The legislation also delegated the Hungarian government the power to set forth by decree the procedural rules and conditions for applying for a guest investor visa. Currently, this government decree has not yet been adopted.

What exactly is the Hungarian guest investor visa?

For guest investors, the first step toward a residence permit is applying for a guest investor visa. This visa enables stays exceeding 90 days and allows multiple entries within 180 days, paving the way for the guest investor residence permit application.

The validity period of a guest investor visa cannot exceed six months. The guest investor visa shall become invalid once the guest investor has obtained a residence permit.

Guest investor visas can be issued to third-country nationals whose stay is of national economic interest.

Making one of the following investments is deemed to be in the national economic interest:

  • the acquisition of investment certificates issued by a real estate fund registered by the National Bank of Hungary, in the amount of at least EUR 250,000, or
  • acquiring ownership of residential property located in Hungary, with a minimum value of EUR 500,000, or
  • a monetary donation of at least EUR 1,000,000 to an institution of higher education operated by a public trust performing public functions.

In the following section, we explain the various investment options within the Hungarian Guest Investor Program. Discover the option that best aligns with your investment strategy.

Which options are available in the Hungarian guest investor program?

Real estate fund

The investment certificate of the real estate fund shall be held by the investor for a period of 5 years. A real estate fund can be established solely by a fund manager who holds a financial license and manages the fund based on the investment principles set out in advance in the fund management policy it has drawn up. Only fund managers who hold a site security certificate or are registered with the Constitution Protection Office can act in relation to guest investor visas.

The real estate fund can be open-ended or closed-ended. The primary difference lies in the following.

  • Open-end real estate fund: Open-end fund investment certificates are redeemable continuously throughout their entire term.
  • Closed-end real estate fund: Closed-end fund investment certificates are generally not redeemable during their term by default.

The holdings of investors in a given pool of assets are represented by the certificate. The prevailing price of the certificate shall be determined based on the net asset value per certificate. The net asset value already includes the costs, so it represents the pure asset value of the certificate, i.e. how much the certificate can be sold for at a given moment.

To justify the national economic interest, at least 40% of the net asset value of the real estate fund must be invested in residential real estate projects realized in Hungary.

Real estate

Another alternative way to participate in the Hungarian guest investor program is through the acquisition of real estate within the country. With regard to real estate investment, an important condition is that the property must be strictly residential (commercial or industrial property is not eligible) and that it must be non-contested, free of encumbrances and claims.

The acquisition of the ownership of the residential property can only take place from 1 January 2025.
Properties acquired before this date will not be eligible for the scheme. In practice, this means that
investors considering buying property will have to wait until early next year. As such, only those who buy
units in a real estate fund or opt for the endowment will be able to participate in the scheme from 1 July
2024.

Furthermore, upon the acquisition of ownership of the residential property, a prohibition on alienation and encumbrance of the residential property must be registered in the land register for 5 years reckoned from the date of the conclusion of the sales contract. The residential property shall be owned for five years exclusively by the third-country national applying for the guest investor residence permit, although it is also acceptable for the residential property to be owned jointly by one or more family members (spouse, minor children) of the third-country national.

The purchase price shall be specified in the contract for the sale of the property. The fair sale price may be verified by the immigration authority with the assistance of an expert. Registration in the Land Registry shall be based on at least a contract countersigned by a lawyer.

A foreign natural person can acquire ownership of the real estate in Hungary with permission from the government office having jurisdiction over the location of the real estate. The necessary documentation includes a preliminary contract, which may be utilized for permission application purposes. Enclosed should be copies of the buyer’s:

  • certified travel document,
  • certificate of good conduct,
  • and the title deed.

The Government Office shall contact the municipality having jurisdiction over the location of the property and ask for a statement as to whether the acquisition of the property is in any way prejudicial to the interests of the municipality. The immigration authority shall also be contacted for information concerning threats to the public interest (expulsion, bans on entry and residence, arrest warrants). The deadline for processing shall be 45 days.

A duty of 4% is payable on the purchase of the property, calculated on the basis of the market value of the property. The legislation does not exclude the possibility for the investor to utilize the property, for example by renting it out. In Hungary, the personal income tax on rental income is limited to 15%.

Monetary donation to an institution of higher education

The third and priciest method of participating in the Hungarian guest investor program involves making a monetary donation of no less than EUR 1,000,000 to an institution of higher education run by a public trust that carries out public functions. Given its high cost, guest investors typically opt for the methods mentioned above instead.

Visa application for a participant in the Hungarian Guest Investor Program

When applying for a visa, the applicant shall declare that they hold or plan to hold at least one of the above investments. Thus, at this stage of the procedure, it is not necessary to already possess an investment, it is sufficient to commit. In such a case, three months are available for making the investment reckoned from the date when the applicant entered the territory of Hungary with a guest investor visa.

In addition to the above, the applicant shall also prove that they have a legitimate source of funds for the investment, which funds shall be available in or transferable to the territory of Hungary. This also implies that the amount to be invested has to be specifically available in Hungary. Understandably, this is not a requirement for the investments already made, only for future investments.

When applying for a guest investor visa, the following documents are required in addition to the above-mentioned:

  • a valid travel document,
  • permission to return or onward travel,
  • proof of the purpose of entry and stay,
  • proof of financial coverage,
  • for housing and subsistence expenses for the entire duration of the stay, as well as travel expenses,
  • any medical expenses.

The Hungarian government will issue a separate decree laying down the rules for demonstrating proof of health care and financial coverage for third-country nationals.

The applicant shall not be the subject of a Schengen Information System (SIS) alert, expulsion, or ban on entry and stay, nor shall they be a threat to public order, public security, national security, or public health in Hungary (grounds for exclusion).

The immigration authority shall also seek the opinion of the law enforcement and national security services of Hungary in relation to the application for a guest investor visa.

The deadline for processing immigration procedures shall be 21 days. The processing period starts on the working day following the day the application is received by the authority.

How can I acquire the Hungarian guest investor residence permit?

Guest investor residence permits can only be obtained by applicants who hold a valid guest investor visa.

The maximum period of validity of a guest investor residence permit shall be ten years, renewable for a maximum period of ten years for the same purpose only. The period of validity of the guest investor residence permit may exceed the period of validity of the applicant’s travel document. The guest investor residence permit can be extended to a family member of the applicant. Spouses and minor children shall be considered as family members.

The guest investor residence permit shall not allow additional family members to join, however, in accordance with the general rules, a residence permit may be granted to the dependent parent of the reunifying partner or spouse, as well as to their siblings and direct relatives if those are unable to care for themselves due to their health conditions. The validity of this residence permit shall be up to 3 years, but shall not exceed the validity of the applicant’s travel document.

The guest investor residence permit shall entitle the holder to

  • stay in the territory of Hungary,
  • carry out business activities,
  • be an executive officer of a company,
  • find a job as an employee.

The above options would ensure that a person with a guest investor residence permit can carry out almost any economic and entrepreneurial activity in Hungary.

Request for a Hungarian guest investor residence permit

The applicant shall submit the application for a residence permit for guest investors to the immigration authority or via its electronic platform (Enter Hungary) cases no later than 93 days from the date of first entry into the territory of Hungary with a guest investor visa.

The applicant shall, within three months of entering the territory of Hungary, provide proof via entering Hungary that they have completed one of the investments.

In accordance with the procedural rules, once the applicant is in possession of a guest investor visa, they are required to travel to Hungary and can only subsequently apply for a guest investor residence permit. No further travel to Hungary is necessary.

When applying for a guest investor residence permit, the following documents are required in addition to the above-mentioned:

  • a valid travel document,
  • permission to return or onward travel,
  • proof of the purpose of entry and stay,
  • proof of accommodation or residence in Hungary.

As can be seen from the above list, whereas for a visa proof of means of subsistence and health care coverage is required, this is not a requirement for a residence permit. Additionally, in the case of a residence permit, proof of accommodation or residence in Hungary is also required.

The third-country national shall provide the following information about their place of residence in Hungary to the authority:

  • natural personal identification data,
  • identification data of the travel document,
  • address of the accommodation,
  • the start and expected end date of the use of the accommodation,
  • the number of the visa or residence permit.

The applicant shall not be subject to any of the grounds for exclusion mentioned in the case of the guest investor visa (SIS alert, expulsion, etc.).

The guest investor program in Hungary offers numerous advantages.

Frequently asked questions

How does taxation work for individuals holding a guest investor residence permit?

A person holding a guest investor residence permit shall not be considered a Hungarian tax resident provided that such a person spends less than 183 days in Hungary in any 12 months.

How can I renew a guest investor residence permit in Hungary?

An extension of the guest investor residence permit may be granted if the applicant holds EUR 250,000 worth of investment certificate in the real estate fund at the time of submitting the application. In this case, the legislation does not require it to be the same certificate as at the time of the initial application.

Should the first application be linked to the purchase of real estate, to obtain an extension, the applicant shall have an investment of at least EUR 500,000 in the real estate based on which the permit is granted. However, if the property has been sold (after the 5-year holding period) or if the real estate investment no longer amounts to EUR 500,000, a new investment of a sufficient value shall be held at the time of application. In the case of grants provided to foundations, an extension can be requested automatically.

The extension does not require the applicant and their family members to provide proof of residence in Hungary. Extension shall be possible for a period of up to 10 years.

What are the procedures for guest investors to acquire Hungarian citizenship?

Holders of a guest investor residence permit shall not be subject to any special rules on permanent residence or Hungarian citizenship, therefore they shall be subject to the same rules as anyone else.

What is the national residence card?

The legislation uses the term ‘long-term residence’ instead of ‘permanent residence’ used in international practice. Holders of a guest investor residence permit can obtain permanent residence status by means of a national residence card. Such a national residence card can be issued to a person whose accommodation and livelihood in Hungary are guaranteed, and who is insured for the full range of healthcare services or who can cover the costs of healthcare services even in the absence of such insurance coverage.

Who can apply for a Hungarian national residence card?

A national residence card can be issued to a person who already holds a residence permit and has resided in Hungary for at least three years without interruption before applying. Leaving the territory of Hungary for less than four months at any one time shall not constitute an interruption, provided that the total duration of such leaves does not exceed two hundred and seventy days in any three years.

A national residence card can be granted only if the applicant’s long-term residence is in line with the interests of Hungary and the applicant fulfills the conditions for social cohabitation.

The government will issue a further decree regulating the granting of national residence cards and the required conditions for social cohabitation.

No national residence card can be issued to a person who is subject to the grounds for exclusion mentioned in the case of the guest investor visa (SIS alert, expulsion, etc.).

What does the naturalization process entail?

Hungarian citizenship can be obtained through naturalization, for which an application can be submitted after eight years of proven residence. During the naturalization procedure, proof of permanent residence and livelihood in Hungary, as well as a clean criminal record, is required. An additional requirement is that, as a general rule, an exam in basic constitutional knowledge shall be taken in the Hungarian language. Naturalization shall not be detrimental to public security and national security.

Seek professional assistance for the Hungarian guest investor program

Are you planning to participate in the Hungarian guest investor program? It can be quite overwhelming without professional guidance. However, Crystal Worldwide – an international business consulting firm with specializations in tax planning, asset protection, and second citizenship – fills this void. Reach out to our highly experienced team for assistance with the Hungarian guest investor program.

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