Many international entrepreneurs are attracted to residency programs in Eastern and Central Europe as successful applicants gain visa-free access to the EU. Hungary has one popular program that allows international entrepreneurs the opportunity to become a resident if they invest in real estate or start a business.
Hungary is a popular destination in Central Europe because of the country’s rich history, lower cost of living, and excellent outdoor attractions. Budapest is very popular among expats and is an ideal location for international companies that want to operate in Hungary and the EU.
Gyor, City in Western Transdanubia region, Hungary
OPTIONS ARE LIMITED BUT STILL AVAILABLE
Many programs have been available during the past decade for people wishing to become Hungary residents. However, applicants may encounter two main issues: the government cancelled some programs, and the path to citizenship for residents is not clear. However, becoming a resident of Hungary still opens you up to many benefits, and there are still multiple ways to apply to become a resident.
The Hungarian government created a residency by investment program in 2013, which allowed people to gain residency in 2-3 months after investing in bonds. Under this program, you were required to invest €300,000 ($295,735 USD) in government bonds and hold this investment for five years. Similar programs in Eastern Europe, such as Bulgaria’s golden visa program, have since been cancelled. The remaining options available require applicants to play a more active role by staying in the country long-term and setting up a company.
However, there are still options available if you are willing to take an active approach and spend more time living in the country. If you are an EU citizen, then all you need to do is purchase a property or sign a lease agreement. If you have Hungarian ancestors, then the pathway to residency and citizenship is much more accessible.
- Student Visa
- Purchasing Real Estate
- Starting a company
- Working for a company
Related content: The Basics Of How To Get A Second Passport Or A Second Residency.
Lake Balaton, Hungary
INVESTING IN HUNGARY'S REAL ESTATE INDUSTRY
One of the simplest ways to gain residency is to purchase €200,000 ($197,157 USD) worth of real estate in Hungary. Real estate prices in Hungary are still attractive, and you could potentially buy multiple apartments and rent them out. The average home price in Hungary was around €100,000 ($98,578 USD) as of 2020.
One important thing to note is that you will need to play an active role in managing the company and can’t receive residency by passively investing in real estate in Hungary. If you plan to go this route, you must set up a local company in Hungary and appoint yourself as the director. You can then manage a real estate company that owns these apartments or houses and rent them to other people in Hungary. I would love to be able to help you with this procedure, and you can click here to get in contact with me.
Hungarian Forint, banknotes and coins
STARTING A COMPANY IN HUNGARY
Hungary also has a Business Residence Program that allows business owners to become permanent residents of Hungary. To be eligible for this program, individuals need to either be an owner or board member of a company registered in Hungary. Applicants must also provide supporting documentation to demonstrate that they run a successful business. You must provide a business plan, professional services agreements, and other supporting documentation to verify your business.
The business permit is initially valid for two years, and you can later extend it for an additional two years. You will need to spend a total of five years in Hungary before you are eligible to apply for permanent residency in Hungary. To apply, you must visit Hungary and be prepared to pay various legal fees, including company formation, setting up a bank account, translation fees, and filing the application with a registered court.
Hungary on Map
RESIDENCY IN HUNGARY BY EMPLOYMENT
You can also become a resident of Hungary if you work for a local company in Hungary. Many multinational corporations have established branches in Hungary and set up R&D centers, and some local companies may be open to hiring foreign talent. If you are interested in this route, it is best to apply for an initial 30 days visa to Hungary and then gather documentation from your employer to prove that you have a long-term contract and sufficient funds to support yourself. You will also need to provide other documentation about your accommodation and submit this to the Hungarian Immigration Office. One benefit of this route is that your employer may assist with this process if they have hired other expats and may be able to provide support when you apply. While there are many job postings online, it may be best to network in the country. Completing a master’s degree program in Hungary could be a solid way to build a network while you are a temporary resident.
Heroes Square with Millennium Monument in Budapest, Hungary
BENEFITS OF OPERATING IN HUNGARY
Hungary is an excellent place to establish residency if you have a long-term interest in Europe. I listed below a few reasons for this:
Cost of Living: The cost of living is low in Hungary, so it can be affordable if you bring your family and they need to access the local healthcare or education systems.
Taxes: Many people choose to move to Hungary because of the low tax rates. The personal tax rate is 15%, while the country’s corporate tax rate is only 9%. Because of this, many people abandon residency in their home country because the corporate and personal tax rates are much higher.
Labour: Because many companies and international entrepreneurs choose to relocate to Hungary, it can be easy to network and hire talented local employees. This country's labour costs are also low relative to other EU countries.
Chain Bridge in Budapest at Night
HOW DO I OBTAIN HUNGARIAN CITIZENSHIP?
Although you are eligible to apply for citizenship after you become a permanent resident of Hungary, the process is not very straightforward and is time-consuming. It is best to consider other Citizenship by Investment Programs in Europe if you are set on citizenship. You can technically apply for Hungarian citizenship after you have lived in the country for eight years and demonstrate that you are fluent in Hungarian. If you marry someone from Hungary, this process is expedited, and you can apply for citizenship after three years. If you have Hungarian ancestors, this process can be expedited, as you are eligible for citizenship immediately after becoming a resident. Hungary allows dual citizenship, so you will not need to renounce citizenship.
Interior of Budapest Parliament, Hungary
Hungarian residency by investment is a very “hands-on” residency program. You will need to own around $200,000 USD worth of property, actively manage them, and live in Hungary. The good part is that the Hungarian real estate market is starting to rise again, giving an ideal opportunity to buy low and sell high later.
If you wish to obtain a permanent residency visa or citizenship quicker and with a more passive requirement, I recommend you look at Portugal’s Golden Visa among other EU countries. Though most of them, if not all, will have higher taxes than Hungary and possibly higher investment requirements. I feel it is necessary to mention that the Hungarian residency program is for those that truly wish to live in Hungary and have a love for that country.