Permanent residence in Hungary. Section 3

This program was originally intended so that the main applicants for residence permit in Hungary obtaining will be the citizens of China. According to the statements of Mr. Rogán Antal, his initiative came out of the recommendations of the Chinese partners, who were concerned about excessive bureaucracy at the entrance of Chinese citizens to Hungary and in obtaining visas.

However, based on statistics we possess, most of the applicants who applied for the purchase of residential bonds are the citizens of Russia. Second after the Russians are citizens of China, followed by citizens of Arab countries.

It is no secret that the lake Gyyviz district, or as they say in Russia – Heviz, is populated by the citizens of the Russian Federation by 70%.

Since the collapse of the USSR around 65-70.000 citizens of the former USSR relocated to Hungary. According to data obtained in the course of the last census, more than 50,000 residents of Hungary indicated Russian as a native language.

This program became very popular among the citizens of the Russian Federation after the Russian government appealed to other countries with a request to report about the presence of the real estate, bank accounts and the second citizenship of Russians outside the Russian Federation. In the appeal the availability of a residence permit of the citizens of the Russian Federation in other countries was not mentioned, so many became interested in this program in particular.

Chinese citizens have also become interested in the introduction of this program in Hungary after a new round of the program to combat corruption due to which many Chinese citizens wanted to protect at least part of property and capital.

In addition, a big plus for Chinese citizens is that the real estate in Hungary is two times cheaper than in China. And this is a real estate purchase, not 90-100 years lease, as in China.

Holders of the permanent residence of Hungary obtained on the basis of government bonds purchase, have the same rights as the citizens of Hungary, except for the right to vote, be elected and to occupy leading positions in government institutions. They also have the right to state social protection, health care, education, work on general terms with Hungarian citizens, entrepreneurial activity and to the same tax benefits as the Hungarian entrepreneurs.

Two important points in this program are:

• no need to obtain a certificate of no criminal record. Hungarian law enforcement services themselves will be able to find the necessary information about the applicant, and in some countries to obtain such a document is not an easy procedure.
• No need to come to Hungary to undergo any procedures and for documents obtaining – all of these issues can be solved by means of the Hungarian Embassy.

Powerful argument in choosing the permanent residence of Hungary is the fact that the investor has the right to include in the list of applicants not only his spouse and minor children, but also his retired parents who are maintained by him.

Hungarian program as of today has no alternatives in terms of its content. Hungary’s main competitors are:

• Bulgaria
• Spain
• Lithuania

But the programs in these countries are worse than Hungarian on several counts:

• Bulgaria does not allow travelling freely throughout Europe and almost 360 days a year be in other EU countries;
• in Spain the amount of investments is less – it amounts to115.000 Euros, but, in addition, in Spain the necessary requirement is the purchase of real estate;
• in Lithuania the investor who obtained a residence permit through his investment, is required to stay in Lithuania for more than 90 days in half a year. In Hungary, the holder of the permanent residence is not required to stay in the country after permanent residence obtaining.

In the market the programs of more developed countries are also present, but they are more expensive and, to some extent, non-returnable or active.

From the very launch of this program, the government put an emphasis on attracting not super-rich investors, but particularly those for whom an investment of 300,000 Euros will not be unaffordable sum, i.e. businessmen with upper middle income.

The average value of real estate in good areas of Moscow or Beijing is around 400-600.000 Euros. Even those citizens who do not have other major savings except for the real estate by selling their real estate in the homeland, can easily afford to obtain a permanent residence in Hungary through this program and to purchase a good real estate in Hungary, starting life in Europe. Everyone knows that real estate in Hungary is one of the cheapest in the EU.

Control and management of the program is carried out by the Administration of the state economy (AKK Zrt.), which also issues resident government bonds.

Initially the Hungarian government planned to attract about a thousand and a half investors for the purchase of residential government bonds, which should have brought 375 million Euros of profit. A recent meeting of the Administration of the state economy has made adjustments in plans and, according to recent estimates of administration, only for 2014 it is expected to attract more than two thousand investors, the profits of which will be half a billion Euros.

For 2013, the government planned to attract 400-500 investors. Total amount of attracted investors for 2013 was 412.

The issuance of government bonds under this program has already passed two stages of issuance:

• The first to the amount of 430 pieces in June 2013;
• The second to the same amount in January 2014.

The profits from the program since its launch have already reached 125.5 million Euros, including the profit for the year 2013 as well, which amounted to 103 million Euros.

As to the end of February, 502 applications were filed.

Only for the first 2 months of 2014 the number of applications amounted to more than 90.

Statistics on the program is the following:

• in March 2013 – 23 applications
• in April – 18
• in May – 12
• in June – 10
• in July – 28
• in August – 30
• in September – 75
• in October – 57
• in November – 83
• in December – 76
• in January 2014 – 38 applications
• in February – 34.

This brought a profit of 8.5 million Euro to the country only in February.

Unfortunately, the overall statistics for March is not yet available, but according to preliminary estimates, from 25 to 40 applications were filed in March.

All candidates wishing to obtain a permanent residence in Hungary by this program undergo serious control through national security protocol, and all the funds invested are verified as to money laundering. Thanks to these procedures, we can say with certainty that through this program no negative elements can get neither to Hungary nor to the European Union.

Since this program attracts well-to-do investors, it is no secret that it is the “alternate airfield” for citizens of other countries. It is also worth noting that this program does not pose any serious risks to the labor market in Hungary and the EU as a whole. In addition, it has all chances to become a launching pad for real additional investment in both the Hungarian economy, and the EU economy as a whole.