How to apply for the Hungarian Guest Investor Visa?

Upon the announcement of the Hungarian Guest Investor Visa program in July 2024, investors from third-country nations are waiting for the opportunity to apply for a 20-year residence permit in Hungary.

While the program is legally in force, some circumstances make it difficult for investors to proceed. Here is the current state and challenges of this visa program in Hungary, a country part of the European Union.

WHAT IS HUNGARY’S GUEST INVESTOR VISA?

Hungary’s so-called “Golden Visa” program offers golden opportunities. It allows third-country nationals and their family members to enter the Schengen Area without restriction, create business investment opportunities, and enable them to live, study, and work in the European Union (EU) while engaging in any social activity.

Applying for the Hungarian Guest Investor Visa (GIV) has two major steps.

1. Applying at the Hungarian Consulate of the applicant's habitual residence country.

2. Apply for the Guest Investor Residence Permit in Hungary upon getting the visa.

To obtain the Guest Investor Visa, besides the usual requirements, the applicant must show a “National Economic Interest.” This unique requirement lays down the purpose of the residence by investment programs. For decades, countries have tried to pull in wealthy individuals and success by enticing high-net-worth individuals (HNWI) to move in by granting them permanent residency or something equivalent. To make this happen, these investment arrangements request applicants to invest in a way that benefits both parties.

An applicant who wishes to show their national economic interest can choose one among the three options:

Acquiring an investment certificate issued by a real estate fund, registered within the National Bank of Hungary, with a minimum value of 250,000 euros.

1. Owning residential property in Hungary, with a minimum value of 500,000 euros.

2. Donating to a higher education institute operated by a public charity foundation in Hungary, with a minimum value of 1,000,000 euros.

Currently, a GIV validity period is only 6 months. Upon the Guest Investor Visa issuance date, the applicant has 3 months to complete the investment they committed to while applying.

THE REAL ESTATE FUND INVESTMENT PATH

For this option, the applicant must hold an investment certificate issued by a qualified fund manager for at least 5 years. The fund manager will be a professional with a financial license registered and enlisted by the Constitution Protection Office of Hungary. Investors must keep in mind that for a valid national economic interest, at least 40% of the value of the real estate fund must be invested in real estate projects in Hungary.

However, there is a unique situation regarding the real estate fund investment path right now. An eligible fund manager responsible for a fund for the Hungarian GIV must be qualified and enlisted by the Constitution Protection Office in Hungary. This also requires them to undergo a background check.

Those who choose the Hungarian investment fund option are currently waiting for qualified fund managers who are approved by the Hungarian authorities. Clients must be able to invest in a Hungarian real estate fund, where a minimum of 250,000 euros shall be invested.

After a lengthy wait, the immigration authorities have finally approved the first fund manager for the program. Currently, there is only one fund manager operating under this program. However, they indicated that four additional real estate funds will be approved and qualified in the coming weeks, with all approvals expected by the end of the year. This should provide applicants with more options, allowing them to select the best fit for their needs.

Despite the waiting period, the real estate fund option appears to be the most appealing investment choice. This approach is relatively straightforward, as a qualified fund manager will handle the investment on behalf of the investor. The professional fund manager manages property selection and utilization—such as selling, renting, and operational management—providing a sense of security for the investor.

APPLYING THROUGH A DIRECT REAL ESTATE INVESTMENT

Those who choose this investment option will purchase a residential property with a value equal to or superior to 500,000 euros. This property must meet several requirements, which are listed here:

- Strictly residential, free from encumbrances and claims, and uncontested.

- Must last at least for five years (it can be owned by the main applicant or/and spouse and minor child).

- A lawyer must sign a sale and purchase agreement pertaining to a residential property.

- Must be in Hungary and recorded in the Land Registry with its parcel identification or topographical LOT number. Once the applicants obtain ownership of the residential property, a restriction on alienation and encumbrance will be entered in the Register for five years from the date the purchase contract is signed.

- The main applicant must own the property solely or their family members applying for a residence permit as guest investors. Furthermore, the authority will assign an expert to assess whether the property's value has been accurately determined.

- It must be fully built. Properties under construction do not qualify as investments.

- The residential property must have a permit from the municipal authority where it is located. Investors should look through the residential properties in advance, as three months is a relatively short time to decide to buy a place.

- Investors can also use this property for profit, like renting. The personal income tax in Hungary is only 15%. In other countries that introduce similar investment arrangements, such as Malta, Portugal, and Greece, this percentage is around 35%, 44%, and 48%, respectively.

However, this option is still on hold because, after the amendment regarding the residential property option, only properties purchased after January 1, 2025, will be eligible for the investor regime.

As the Guest Investor visa is only valid for six months, the applicant only has three months to complete the committed investment upon the issuance date. So, for now, it is wise to look for possible options on the market but not rush because the residential property market can change and fluctuate in 2025.

THE PATH OF MONETARY DONATION TO A CHARITABLE ORGANIZATION

This alternative requires the investor to obtain a certificate from a higher education institution that is supported by a public trust with a mission focused on public service. This certificate must indicate that the organization received a financial contribution of at least 1,000,000 euros from the primary applicant to aid in educational, scientific research, or artistic creation initiatives. However, this option is less favored compared to others since it essentially offers no investment value; nonetheless, if the applicant chooses this route, there will be no necessity to submit a renewal application because it will undergo an automatic renewal process.

GUEST INVESTOR RESIDENCE PERMIT

After applying at the Hungarian Consulate of the applicant's habitual residence country, the second step is to request a Guest Investor Residence Permit. With a valid GIV, the investor can enter Hungary, and upon entry, they are obliged to show proof of the chosen investment within three months of their entry. The application for the permit can be made via the website of enterhungary.com, but the applicant must be in Hungary for the biometrics and to hand over the official documents. This residence permit can be extended for the spouse and minor children of the main applicant, and they are also eligible for a renewal of 10 years.

Compared to other Golden Visa programs, Hungary’s has very similar requirements. But what makes the country stand out is:

The residence permit issuance process is quite quick. After around 3-4 months of processing time, the applicant and their family can enjoy the benefits of living in Hungary.

The residence permit also allows third-country nationals to work in Hungary. So, the applicant and their family members who received the permit can work, study, and live in Hungary without an additional permit.

The Hungarian Golden Visa does not require a minimum stay in the territory, so applicants can obviously choose to live and stay in Hungary, but they can also visit once to finish the last sphere of the application.

WHAT MAKES LIVING IN HUNGARY ATTRACTIVE?

Residents of Hungary can enter the Schengen area without any restriction. With affordable medical services in reach, living, studying, and working in the EU is now possible.

Hungary is recognized for its favorable tax regime, with one of the lowest personal income tax rates in the EU at 15%.

According to the Global Peace Index, Hungary is 14th among the 163 remaining countries, making it one of the safest places to live. For applicants who will settle in Hungary with their families, security can be a huge contributing factor. But it’s not just working and living with the Guest Investor Visa; applicants and their families can also study in Hungary. Apart from the elementary schools and secondary education institutes, Universities in Hungary welcome growing numbers of international students for full degrees, and most of the courses that are offered are entirely taught in English. According to QS World Ranking, Eötvös Loránd University ranked 651 while Corvinus University ranked 801.

PERMANENT RESIDENCE & CITIZENSHIP

Applicants who have been staying in Hungary for three consecutive years while holding a valid residence permit can apply for the National Residence Card called Permanent Residency. For residence to be counted as continuous, holders of a residence permit cannot leave Hungary for more than four months in a row or more than 270 days in total each year.

For citizenship, it is possible to apply after eight years of stay, having a clean criminal record, and passing the Basic Constitutional Test in Hungarian. Showing that the applicants are adapted to society and embrace the values of the culture, the Golden Visa can open the way for citizenship as well.

Overall, the Hungarian investor program has potential. With many advantages and benefits, even from the start, interest in this scheme made it different from its competitors. As the Hungarian Guest Investor Visa starts accepting the first applicants, many will follow.