Immigration to Hungary – Resident permits, Golden Visa, introduction to the new regime

According to the new rules, set out by Act XC of 2023 (further referred to as the “Act”), a third-country national may receive a permanent permit to reside in Hungary under the following twenty-six categories:

1. for business or investment purposes:
   1. as a self-employed visitor,
   2. as a guest investor,
2. for employment purposes, as a guest worker:
   1. with a residence permit for seasonal employment,
   2. with a work permit issued for the purpose of carrying out an investment,
   3. a residence permit for employment purposes,
   4. a residence permit for guest workers,
3. as a highly qualified person for the purpose of employment or as a person with skills in a field of high importance for the country:
   1. with a Hungarian Card,
   2. EU Blue Card,
   3. as an intra-corporate transferee,
   4. as a researcher,
   5. in case of relocation of a company to Hungary, with a Company Card,
4. for employment linked to certain citizenship or for other purposes under the Act, with a National Card,
5. for other reasons specified in the Act, i.e.:
   1. for study purposes,
   2. for training purposes,
   3. as a trainee,
   4. for official purposes,
   5. on the basis of an international treaty for the employment of tourists on temporary work,
   6. with a White Card,
   7. for the purpose of a posting,
   8. for medical treatment,
   9. for the purpose of carrying out voluntary activities,
   10. in the national interest,
   11. for the purpose of ensuring family coexistence; or
   12. on humanitarian grounds.

In this article we provide further information on a few the highlighted categories, which most likely by utilised by a third country national who is wishing to obtain permanent residence permit in Hungary. It is anticipated, however, that the guest investor resident permit will attract the most attention. Our colleagues are ready to elaborate on any other permit type upon request.

While the Hungarian guest investor program is often referred to as a “Golden Visa” program, just like many other investment residency options around the world, the new immigration law regulating it does not use this phrase. Instead, the law calls it a guest investor program, in which investors may obtain residency for 10 years for themselves and their closest family members (meaning spouse and underage children).

This is achieved in two stages:

• First application for a guest investor visa,
• Then application for guest investor residency

The following investments would grant permanent residency to the applicant and his family:

• EUR 250,000: purchase of bonds issued by a real estate fund registered by the Hungarian National Bank
• EUR 500,000: purchase of Hungarian residential real estate
• EUR 1 million: donation to a designated educational or cultural institution.

If an applicant has decided to proceed with one of the options listed above, he or she can apply for the guest investor visa from his/her home country. During the application, the applicant must make a pledge that he intends to realise one of the above investments within 3 months upon first entering Hungary and must prove that he has the funds to do so.

Additional requirements for the visa application include:

• Proof of valid healthcare insurance in Hungary
• Thorough background check (performed by the Hungarian authorities to prove that the applicant has not been expelled from and are not a threat to the European community).

The guest investor visa will let the applicant enter Hungary in order to realize the investment he has pledged, after which he will be able to apply for the guest investor residence permit. The visa will be valid until he receives his residence permit. The visa’s maximum validity is 2 years, but that is included in the law because there needs to be a time limit. If all qualifying conditions are met, the resident permit should be received much sooner.

The guest investor visa also allows multiple entries to Hungary, which is a significant improvement compared to regular visas that allow only one entry.

Once the applicant secured his guest investor visa, he or she is permitted to enter Hungary multiple times, in order to realise the investment he has pledged to make, and in order to submit the application for the residence permit. This must be done within three months, more precisely within 93 days following the first entrance to the country.

This means that the holder will be able to renew the residency upon expiry even if he and his family have not spent the majority of their time in Hungary.

Moreover, the resident permit holder will become not become a tax resident in Hungary automatically, unless he stays more than half of the time in Hungary (defined as more than 90 days in any 183-day period). Of course, income generated in Hungary will be taxed in Hungary.

Please see some further detail sin each qualifying investment category:

• The fund must be one registered by the Hungarian National Bank;
• At least 40% of the portfolio must consist of residential real estate projects realised in Hungary;
• The investor must hold onto the bonds for at least 5 years.

The following conditions apply to investments in residential real estate:

• Strictly residential (so commercial or industrial real estate is not allowed);
• Must be uncontested and free of any claims (including mortgage);
• The property cannot be sold for 5 years, and this must be indicated on the title deed;
• Either the investor must be the sole owner or they can share ownership with one or more of the family members applying together (but with no one else outside the family group);
• If the investor is not planning to live in this property, he is not allowed to rent it out.

The rules pertaining to property purchase in Hungary apply to the acquisition of the qualifying property purchase. This means that a third-country national will need to ask the local municipality for a purchase permit and pay a 4% property transfer tax. If the investor decides to rent the property out, he will need to pay taxes on that income too.

The investor is allowed to sell the property after 5 years. However, if they wish to renew their guest investor residency after 10 years, by that time they must purchase another piece of residential real estate that matches the requirements.

The following conditions apply to donation made for a designated educational or cultural institution:

• It must be an institution managed by a public foundation (this is a specific category of institutions in Hungary);
• The institution must be one of higher education that is involved in scientific research or artistic activities as well as education;
• The list of specific institutions will be published later.

Since this is a donation, repayment is not possible. If the investor wishes to renew their guest investor residency after 10 years, they can do so without submitting any additional proof that conditions are still met.

First applications under the program are expected to be accepted following 1st July, 2024. The Hungarian Government has been given the power to work out and publish further details of the program, but his has not yet happened. It does not mean, however, that prospective investors should sit back and wait. If you believe that you would like to take this unique opportunity to obtain permanent residency in a reputable European jurisdiction, please contact our colleagues to start preparation as early as possible. Identifying suitable real estate objects to purchase takes time. In addition, we envisage possible difficulties with channelling the needed fund to realise the qualifying investment. The collection of suitable proof of funds documentation which will be required by banks, real estate owners, developers, lawyers etc. may take a while to produce.

This type of resident permit shall be granted to a third-country national whose purpose of residence is to carry out an activity which can be carried out independently for consideration, or act as a senior executive of a legal entity.

Please note, however, that the residence permit of the guest self-employed shall be valid for a maximum period of one year and it may be extended for a maximum of two years, so the residence permit may not be renewed for a period exceeding three years after the date it was first issued.

A residence permit for employment purposes may be issued to a guest worker who, on the basis of his/her employment relationship, performs actual work for or under the direction of another person for consideration.

The Minister responsible for employment policy may specify in a communication the occupations for which a residence permit for employment purposes may not be issued.

The number of guest worker residence permits and residence permits for employment purposes issued in Hungary is determined each year by the Hungarian Government.

A residence permit for employment purposes may also be issued to a guest worker who is employed in Hungary on the basis of an employment relationship with an employer established in a third country in order to fulfil an agreement with a domestic employer.

During the period of validity of the residence permit for employment purposes and after its expiry, no other residence permit may be applied for in the country, and no family member may join the resident permit holder during the validity of his permit.

The Hungarian Card is a residence permit which entitles the holder of a higher professional qualification to reside in Hungary and at the same time to work in Hungary, with the view of long term occupation.

The permitted higher professional qualification will be set out on a list, by the appointed ministry. Such list has not yet been published.

IT professionals, health care professionals, engineers are expected to make the list. A Hungarian Card may be issued to those third-country nationals:

a) whose purpose of residence is to perform actual work for or under the direction of another person for consideration on the basis of his/her employment relationship, or

(b) who, as owner or manager of a company, cooperative or other legal person established for gainful purposes, is actually carrying out work in addition to the activities falling within the scope of that activity.

The EU Blue Card is a residence permit which entitles its holder with a high level of qualification to reside and work in the territory of a Member State, in our case, in Hungary.

Applicants for an EU Blue Card need to meet the following criteria:

• Have been offered a job position in Hungary or have a valid work contract for a duration of at least one year (12 months);
• Meet the minimum salary threshold in Hungary, which is currently gross HUF 3,912,000 per year, (approximately EUR 10,000);
• Have completed a study course with a duration of three years and have a diploma recognized by Hungarian educational institutions;
• Have proven professional work experience;
• Not considered a threat to the public policy, public security, national security, or public health of Hungary.

EU Blue card applications might be submitted at the nearest Hungarian diplomatic mission, embassy or consulate.

The EU Blue Card must be issued for at least two years.

If the employment contract is for a period of less than two years, the EU Blue Card shall be issued for a period exceeding three months of the duration of the employment relationship under the employment contract.

A residence permit for study purposes is issued to third-country nationals who:

a) establishes or has established a student relationship with a public education institution registered in Hungary as a public education information system for full-time education or a full-time education work schedule, or wishes to reside in Hungary in the framework of full-time education at a state-recognised higher education institution or a foreign higher education institution operating in Hungary in order to pursue studies or to participate in preparatory studies organised by the higher education institution,

b) certifies that he/she has sufficient knowledge of the language for the purpose of studies,

c) has paid the fees charged by the educational establishment or higher education institution,

d) has declared a genuine domestic address as his/her accommodation in Hungary.

A third-country national holding a residence permit for the purpose of studies may not be granted an additional residence title for a third-country national on the grounds of his/her stay in Hungary, in other words, cannot invite his or her family members to join him/her.

A student, who successfully finished his or her education, may be granted a residence permit to look for a job or start a business, for a maximum period of nine months, following which period he or she must apply for a Hungarian Card, or an EU Blue card or a residence permit as a self-employed visitor, in order to extend his or her stay.

A White Card is a residence permit whose holder is in a certified employment relationship in a country outside Hungary and performs his/her work from Hungary using advanced digital technology, or holds a share in a company – outside of Hungary – with a certified profit in a country outside Hungary and performs his/her work or manages his/her business from Hungary using advanced digital technology.

During the period of validity of the White Card and after its expiry, no other form of residence permit may be applied for in the country.

The residence permit of a third-country national who holds a White Card may not be used to establish the residence title of another third-country national on the grounds of his/her residence in Hungary.

Generally applicable rule to all types of resident permits, that a resident permit visa is to be obtained by a third-country national who has been granted a residence permit under the Act (and a guest investor visa for someone seeking a guest investor resident permit, as explained in the relevant section of the article).

The sole purpose of this visa is to grant entry in order to organise the final stage of receiving a resident permit, in the territory of Hungary. The period of validity of a visa entitling the holder to receive a residence permit shall not exceed three months.

Several resident permit categories do not allow the holder to invite further third-country national family members to reside in Hungary, for the purpose of family reunification. The complete list of residence permits that do not allow family reunification is the following:

a) a residence permit for self-employed persons as a guest for at least one year,

b) a residence permit for seasonal employment,

c) a work permit issued for the purpose of carrying out an investment project,

d) a residence permit for employment purposes,

e) a residence permit for guest workers,

f) a White Card,

g) a residence permit for the purpose of study or training,

h) a residence permit for the purpose of a traineeship; and

i) a residence permit for the purpose of voluntary service is a volunteer in an activity as a volunteer.

A permanent residence card entitles its holder to live and work in Hungary for indefinite time. The receipt of such card may be seen as the last step before application for citizenship. The Act has tightened the rules under which a permanent residence card may be issued.

Taking a leap of faith and seeking a country to set op a new residence for a family is a serious decision. Such move takes careful planning, and even more careful execution. Unprepared, incomplete applications may cause major delays, additional expenses, and ultimately, refusals. Please make sure that you always seek professional advice when embarking on the journey of relocation. Please contact our colleagues in connection with the immigration rules and practices of Hungary, and several other countries.