The Hungarian Golden Visa Explained: Investment, Residency, and Beyond
Hungary’s Guest Investor Residence Permit, commonly referred to as the Hungarian Golden Visa, has been relaunched in July 2024, offering a compelling opportunity for global investors seeking residency in Europe. This program allows individuals and their families to obtain a 10-year renewable residency permit through various investment options, including real estate and contributions to higher education.
With Hungary’s strategic location in Central Europe, vibrant culture, and favorable economic conditions, the Golden Visa program not only facilitates access to the Schengen Area but also provides a pathway to permanent residency and potential citizenship. This article explores the key features of the program, eligibility requirements, investment options, and the benefits it offers to investors looking to establish a foothold in Europe.
Contents
Benefits of Hungarian Residence by Investment
Tax Implications for Non-Residents
Comparison of Hungarian Golden Visa with Top Programs
About the Program
The Hungarian Golden Visa program allows investors to secure residency by committing to an eligible investment option. Designed with flexibility and efficiency in mind, the program ensures fast-track processing and minimal residency requirements, making it particularly appealing for global investors.
Key Features:
- Residency Validity: 10 years, renewable indefinitely.
- Pathway to Permanent Residency: After five years of full-time residence.
- Minimal Residency Requirement: No requirement to live in Hungary to maintain the permit.
- Family Inclusion: Spouse and children under 18 are eligible.
Why Choose Hungary?
Hungary is one of Europe’s oldest and most historically rich nations, offering a unique blend of tradition and modernity. It combines a high quality of life, vibrant culture, and affordable living with a central location that provides easy access to Europe’s Schengen Zone.
Highlights of Hungary:
- Population: 9.7 million
- Currency: Hungarian Forint (HUF)
- Language: Hungarian
- Capital: Budapest
- Strategic Location: Located at the crossroads of Eastern and Western Europe, Hungary is a gateway to major European markets.
- Cultural and Economic Appeal: Hungary offers a rich cultural scene, strong education and healthcare systems, and a growing economy ideal for investment.
Hungary’s economy, after facing challenges like high inflation and slow growth post-pandemic, has shown strong signs of recovery since late 2023. GDP growth is projected to accelerate in the coming years, with inflation expected to decrease. The labor market remains stable, supported by low unemployment and wage growth. Hungary continues to attract foreign direct investment, particularly in manufacturing, and is positioned for long-term economic growth. With ongoing fiscal adjustments and a favorable business climate, Hungary’s economic outlook is increasingly positive, making it an attractive destination for investment and business expansion.
Benefits of Hungarian Residence by Investment
- Fast Track to European Residency
Secure Hungarian residency in as little as 6–8 weeks, providing quick access to Europe. - Visa-Free Travel Across the Schengen Zone
Enjoy unrestricted travel within Europe’s Schengen Area, simplifying frequent business or leisure trips. - Family Inclusion with Minimal Requirements
Spouses and children under 18 can join without additional residency requirements, making it a family-friendly solution. - Affordable and Flexible Investment Options
Begin your journey to European residency with a minimum investment of just €250,000, with potential for rental income. - Residency Renewal Every Ten Years
Enjoy the convenience of renewing your residency every decade without needing to reside in Hungary. - Pathway to Permanent Residency
Achieve permanent residency after five years of full-time residence, offering long-term stability and deeper ties to Hungary. - No Tax Obligations for Non-Residents
Non-residents are exempt from Hungarian taxes on global income, providing a financial advantage.
Investment Options
- Real Estate Fund Investment
- Minimum Investment: €250,000
- Requirements: At least 40% of the fund must be allocated to Hungarian residential property.
- Regulation: Funds are overseen by the Hungarian National Bank, ensuring security and transparency.
- Residential Real Estate Purchase
- Minimum Investment: €500,000 (starting January 2025).
- Requirements: Properties must be residential; commercial investments are not eligible.
- Commitment: Property cannot be sold for at least five years.
- Higher Education Donation
- Donation Amount: €1,000,000.
- Purpose: Support Hungarian public trusts focused on higher education initiatives.
Note: Applicants should budget an additional €60,000 for legal, application, and processing fees across all options.
Application Process
Eligibility
Who Can Apply?
- Applicants must be at least 18 years old.
- A clean criminal record is mandatory.
Family Eligibility:
- Spouse.
- Children under 18 years old.
- Unmarried, financially dependent children above 18 years old.
Timeline for the Hungarian Golden Visa
Step 1: Obtain the Guest Investor Visa
Submit an application declaring your intent to invest in one of the eligible options. Finalizing the investment is not required at this stage, allowing applicants to begin the process with flexibility.
Step 2: Travel to Hungary and Finalize Investment
Once the visa is issued, travel to Hungary to complete your investment within three months. Submit your application for the Guest Investor Residence Permit, including proof of investment, either in person or via the Enter Hungary platform.
Step 3: Receive Long-Term Residence Permit
Upon fulfilling all requirements, you and your qualifying family members will receive a renewable 10-year residence permit. No further travel to Hungary is necessary to maintain the permit.
Path to Hungarian Citizenship
Hungary does not offer a direct citizenship-by-investment program. However, residency can lead to citizenship through naturalization.
Requirements for Citizenship:
- Reside in Hungary for at least 8 years.
- Demonstrate basic proficiency in the Hungarian language.
- Show integration into Hungarian society, such as a stable income and clean criminal record.
Exceptions to the residency requirement may apply to individuals with Hungarian ancestry, those married to a Hungarian citizen, or those who contribute significantly to the country. Once granted, Hungarian citizenship provides full EU benefits, including the right to live, work, and study in any EU member state.
Tax Implications for Non-Residents
- Tax on Global Income:
- Non-residents are generally taxed only on their Hungarian-source income. This means they are not subject to Hungarian taxes on income earned outside of Hungary, allowing for greater financial flexibility.
- Capital Gains Tax:
- Capital gains realized by non-resident shareholders from the sale of shares in a Hungarian company are typically not taxable in Hungary, unless the shares are held in a Hungarian real estate company or if specific tax treaties impose taxation.
- For capital gains from the sale of real estate, non-residents may be subject to a 15% capital gains tax if the property is sold within five years of acquisition. However, if held for longer, they may qualify for exemptions.
- Income Tax Rates:
- Non-residents pay a flat personal income tax rate of 15% on any Hungarian-source income, such as rental income or employment income derived from work performed in Hungary.
- Dividends and interest earned by non-resident individuals are also subject to a 15% withholding tax rate.
- No Tax Obligations on Foreign Income:
- Non-residents are exempt from Hungarian taxes on their global income, which means that any income earned outside Hungary is not taxed by the Hungarian government. This is particularly advantageous for international investors looking to maintain investments or business operations in multiple countries.
- Availability of Tax Treaties:
- Hungary has numerous double taxation treaties that can further mitigate tax liabilities for non-residents. These treaties often provide exemptions or reduced rates on various types of income, including dividends and interest, depending on the specifics of the treaty with the investor’s home country
In summary, non-resident investors in Hungary enjoy a favorable tax regime that allows them to minimize their tax liabilities on foreign income while benefiting from specific taxation rules applicable to Hungarian-source income. This structure makes Hungary an attractive destination for international investment.
Comparison of Hungarian Golden Visa with Top Programs
The Hungarian Golden Visa program offers a unique set of benefits and requirements compared to other European residency programs. Here’s a detailed comparison with notable programs like those in Portugal and Greece:
| Feature | Hungarian Golden Visa | Portugal Golden Visa | Greece Golden Visa |
| Minimum Investment | €250,000 (real estate fund) | €250,000 (real estate) or €500,000 (investment fund) | €250,000 (real estate) |
| Residency Validity | 10 years, renewable indefinitely | 2 years, renewable every 2 years | 5 years, renewable every 5 years |
| Processing Time | 6-8 weeks | Several months | Approximately 2 months |
| Minimum Stay Requirement | None | 7 days in the first year, then 14 days every two years | None |
| Family Inclusion | Spouse and children under 18 included | Spouse and dependent children included | Spouse and dependent children included |
| Pathway to Citizenship | Yes, after 8 years of residency | Yes, after 5 years of residency | Yes, after 7 years of residency |
| Tax on Global Income | Non-residents are exempt from Hungarian taxes on global income | Non-residents are taxed only on Portuguese-source income | Non-residents are taxed only on Greek-source income |
| Investment Options | Real estate fund, residential real estate, donation to education funds | Real estate, investment funds, business investments | Real estate, strategic investments in various sectors |
| Visa-Free Travel | Schengen Area | Schengen Area | Schengen Area |
Key Insights
- Investment Flexibility: The Hungarian program offers a starting investment option of €250,000 in a real estate fund. This is competitive with Portugal’s options but provides a unique route through investment funds that must allocate a significant portion to Hungarian residential properties.
- Processing Speed: Hungary’s processing time of 6-8 weeks is notably faster than Portugal’s several months and Greece’s approximately two months. This makes Hungary an attractive option for those seeking quicker residency.
- No Residency Requirement: Unlike Portugal’s requirement for minimum stay periods, Hungary allows investors to maintain their residency without needing to reside in the country full-time. This flexibility can be appealing for international investors with commitments elsewhere.
- Pathway to Citizenship: Both Hungary and Greece provide pathways to citizenship after several years of residency. However, Hungary requires eight years compared to Greece’s seven years.
- Tax Advantages: Non-residents benefit from favorable tax treatment in Hungary by being exempt from taxes on global income. This is similar to the tax treatment in Greece but differs from Portugal, where non-residents are taxed only on Portuguese-source income.
Conclusion
- The Hungarian Guest Investor Residence Permit, or Golden Visa, presents a unique and attractive opportunity for global investors seeking residency in Europe. With its low minimum investment threshold, rapid processing times, and minimal residency requirements, the program stands out among European residency options. Investors can benefit from Hungary’s strategic location within the Schengen Zone, a vibrant culture, and a growing economy.
- Moreover, the program allows for family inclusion and offers a pathway to permanent residency and citizenship after several years. While potential investors should remain aware of the specific requirements and obligations associated with their chosen investment option, the overall framework of the Golden Visa program is designed to facilitate a smooth transition into Hungarian residency.
- As Hungary continues to stabilize its economy and attract foreign investment, the Golden Visa program remains a compelling choice for those looking to secure their place in Europe. Whether for business opportunities, lifestyle changes, or educational pursuits, the Hungarian Golden Visa opens doors to a wealth of possibilities in one of Europe’s most historically rich and strategically located nations.
FAQ
Q: Is the Hungarian Golden Visa the same as citizenship-by-investment?
A: No, the program offers residency by investment, but citizenship requires naturalization after 8 years of residence.
Q: Can I generate income from my investment?
A: Yes, the Real Estate Fund and Residential Real Estate options allow for rental income.
Q: Are there any restrictions on nationalities?
A: Most nationalities are eligible, but certain restrictions may apply depending on Hungary’s policies.
Q: What happens if I sell my investment?
A: The investment must be maintained for five years to retain residency. Selling it earlier could result in the loss of your permit.
Q: Can I include my parents in the application for the Hungarian Golden Visa?
A: No, the program allows for the inclusion of a spouse and children under 18 years old. However, parents are not eligible for residency under this program.
Q: What happens if I do not meet the residency requirements after obtaining my permit?
A: The Hungarian Golden Visa has minimal residency requirements, meaning you are not obligated to reside in Hungary to maintain your permit. However, if you wish to apply for permanent residency or citizenship in the future, you will need to meet specific residency criteria.
Q: Are there any restrictions on selling my investment property?
A: Yes, if you choose to invest in residential real estate, you must hold the property for at least five years before selling it. Selling the property before this period may jeopardize your residency status.
Q: Can I work in Hungary with a Golden Visa?
A: Yes, holders of the Hungarian Golden Visa can work in Hungary without needing a separate work permit. This allows for greater flexibility in pursuing employment opportunities while residing in the country.
Q: Is it possible to apply for the Golden Visa from outside Hungary?
A: Yes, you can initiate your application from abroad. The initial Guest Investor Visa can be obtained through a Hungarian consulate or embassy, allowing you to travel to Hungary and finalize your investment.
Q: Will I need to learn Hungarian to maintain my residency status?
A: No, there is no language requirement for maintaining your residency under the Golden Visa program. However, if you decide to pursue citizenship later on, you will need to demonstrate basic proficiency in Hungarian as part of the naturalization process.
