Hungary Investor Residency Bond Program Review
In 1989 Hungary emerged from the shadow of the Iron Curtain to take its rightful place among the free world and become a democracy. In 2004 it became part of the European Union, in 2007 part of the Schengen Zone, and in 2013 announced its very own resident investor program. But is it any good?
Hungary in a Nutshell
Hungary is a landlocked nation located in the Carpathian Basin of Central Europe which borders Slovakia, Romania, Serbia, Croatia and Austria, with whom it used to be united. Universally respected for its rich cultural history, Hungary has contributed significantly to the arts, to music, as well as literature, sports, science and technology. In addition to its wealth of culture and history, the Hungarian language is so unique, it shares almost no words with the native tongues of other nations.
Despite its lack of a coastline, Hungary is known as the “Land of Waters” as it is crisscrossed by a multitude of rivers and lakes, including Europe’s largest, Lake Balaton. Even Hungary’s capital is split by the River Danube, with Buda on the Western side and Pest on the East bank, hence the name Budapest. Hungary is famed for its sumptuous, breathtaking inland scenery and vistas. Unsurprisingly the country is popular with tourists, and is the 11th most popular destination in Europe, with 14.5 million visitors, who enjoy partaking in camping, fishing, sailing, hiking and skiing holidays.
As well as the EU and the Schengen Zone, Hungary is also a respected member of the United Nations, NATO, WTO, World Bank, the AIIB, the Council of Europe and Visegrád Group.
- Official Language: Hungarian
- Capital City: Budapest
- Largest City: Budapest (Pop; 2.1 million)
- Surface Area: 93,000 km2
- Religion: Roman Catholic
- Population: 9.8 million
- Government: Parliamentary Republic
- Legal system: Civil legal system based on Roman law
- Currency: Hungarian Forint
- GDP per capita: $12,621.74
- Climate: Continental, featuring hot summers and mild, snowy winters
Hungarian Citizenship by Investment Program
On the official Hungarian immigration and asylum website, www.bmbah.hu, their investor program and the thinking behind it is described thus;
“A national permanent residence permit may be issued to a third-country national for establishing residence in Hungary if the entry and residence of such third-country national is in the interest of the national economy for reasons related to the investments made by such person in Hungary, including the spouse of and the descendants and parents supported by such third-country national.
National interest shall, in particular, mean:
- if the third-country national provides evidence that he or she, or a business association in which he/she has a majority stake has securities with a maturity of not less than five years, of a nominal value of at least EUR 300,000, issued by a company defined in the relevant legislation, and
- a guarantee made by the company defined in the relevant legislation to subscribe within 45 days following the date of issue of the applicant’s residence permit the government bonds, of a nominal value of at least EUR 300,000, from the funds made available by the applicant.”
In Layman’s Terms
Hungary initiated its own variation of a CBI (Citizenship by Investment) program in 2013, entitled the “Hungarian Investor Residency Bond Program”, and it is arguably the best value program of its kind in Europe, possibly the world. It has proved to be hugely popular with high net-worth investors, particularly from the Middle-East and China, and by the summer of 2016 more than 3,650 residency programs had been purchased, netting Hungary approximately €1.1 billion in revenue.
The bonds in question are Hungarian Government Bonds, and €300,000 worth must be purchased by an applicant, and they must then be retained for a minimum of five years in order to maintain the owner’s Hungarian residency. The Hungarian residency permit allows its holder the right to live and work within the Schengen Zone for 90 days at a time. Upon competition of five years, residents can apply for full Hungarian citizenship.
What Will Be Required From Applicants
Aside from the necessary capital required for the purchase of Hungarian government bonds, applicants should prepare themselves for the following:
- A Thorough And Detailed Background Check: During the initial application stage of the Hungarian residency bond program, the Hungarian authorities will follow standard due diligence and anti-money laundering procedures, and any applicant must be prepared to provide both proof of income and how they acquired their current personal net worth.
- A Possible Random Interview: The Hungarian administration officers in charge of the investor residency bond program reserve the right to request an interview meeting with an applicant, which can be exercised at random. While this practice is not mandatory, applicants should nevertheless be prepared for such an event in case it does take place.
Hungarian Investor Residency Benefits
- There are no mandated trips to Hungary required during either the application or residential process. The initial application can be lodged at the investor’s closest Hungarian Consulate
- The applicant’s government bonds are 100% guaranteed, and will be returned in full value after completion of the 5 years of residency
- The Hungarian residency permit entitles its holder the right to live and work throughout Europe’s Schengen Zone for 90 days at a time
- A single application qualifies all family members without age restrictions
Pros and Cons of Life In Hungary
The cost of living is far cheaper than in Western Europe, and property prices are especially appealing. A plush four bedroom country house will cost around €150,000, and even a two bedroom apartment in Budapest will only cost €90,000.
The pace of life is slow, the rate of serious crime is low, and the locals are warm, friendly and many speak English.
If one is relying on an income in Hungary, either from work or creating a business, the pay is low, and money in general is scarce. The Hungarian language is quite possibly the most difficult to learn of any European dialect.
Passport Reviewer Ranking: B
The Hungarian Investor Residency Bond Program represents great value, with the allowance of multiple family members accepted on just one application a real selling point.
The only drawback is the five year wait for full citizenship and an EU passport, but if an investor is patient, they will be able to gain European Union citizenship and even get a refund on their investment, which technically means they are gaining an EU passport for free!