GUIDELINES FOR APPLYING FOR “PREFERENTIAL” HUNGARIAN PERMANENT RESIDENCY BASED ON 250,000 EUR INVESTMENT

The Immigration Authority has come out with a set of guidelines for third-country nationals wishing to apply for permanent residency in Hungary based on investment into government bonds. We have been discussing this program with many of our clients in these pages as well as through private conversations. Although to this date we cannot start processing applications due to technicalities (basically, we are waiting for the go-ahead and also some detailed information from the Parliament as well as the Immigration Office), we are now happy to share the latest information with you. Please find an extract of the guidelines (which we have translated into English and interpreted / clarified for your convenience) below. You can also access the same file via PDF.

If you have any questions, as always, we are happy to hear from you at investment@helpers.hu!

Guidelines and requirements: Residency program for investors

On the rules and procedures of applying for a Hungarian permanent residence permit (PR) with reference to ‘national interest’

First steps: Applying for a ‘preliminary’ and subsequently a ‘permanent’ permit

1.) In the first stage, a residence permit application must be submitted at a Hungarian consulate or other authority that is authorized to handle residence permit applications and operates in the country of the applicant’s citizenship or permanent residence. Taking into consideration that the entry and stay of the applicant are matters of significant national interest, applications in this category may also be submitted with any office authorized to receive applications if there is a demonstrable and insurmountable obstacle to submitting at the applicant’s local consulate.

2.) Third-country nationals legally staying in the territory of Hungary (with or without a visa) may submit their application for a resident permit with the relevant regional authority in Hungary.

The residence permit application must be submitted in person. The receiving authority will make a record of the applicant’s biometric data at the time the application is submitted (fingerprints, photo). The processing fee for the application is EUR 60 or its equivalent in another currency.

If the application is submitted to a foreign representative office, the Budapest and Pest County Regional Directorate will be responsible for evaluating the application.

Contents of the application

In addition to the application form, the following must be attached to the application:
* documents proving the purpose of entry and stay (please see below)
* power of attorney (please see below)
* two passport photos
* a passport whose expiration date is min. 3 months later than the expiry of the resident permit requested by the applicant (see below).
Furthermore, the applicant must formally declare that they agree to voluntarily leave the territory of the European Union if the application is rejected. The applicant’s accommodation to be occupied during their stay in Hungary must also be declared, either when submitting the application or no later than within three days of entry into Hungary. This declaration of accommodation must be done at the regional directorate where the accommodation is located, and can be done via the applicant’s authorized legal representative or in person.

Use of legal representation in the permit application process

In addition to the requirement of appearing in person at the authority receiving the residency application, the applicant must also appoint a legal representative to represent them in certain steps of the procedure (specifically, transactions related to subscribing the relevant government bond, as discussed below). For this reason, the applicant must attach a valid and properly drafted and certified power of attorney to the residency application.

Time frame for evaluating the application

If it is determined that the applicant’s entry and stay represent a matter of Hungary’s economic interest (see below), the Budapest and Pest County Regional Directorate will decide on the application as soon as possible but no later than eight days of receiving the application.

Proving that the category of “national interest” applies to a third-country national

A third-country applicant can prove that their entry and stay in Hungary represent a matter of national interest in the following ways:

– with a credible document certifying that the applicant him-/herself or a company that is majority owned by the applicant has made a payment towards a government bond issued by a licensed agent with a nominal value of at least EUR 250,000 and a duration of at least five years; and
– with a document issued by the licensed agent handling the issue and purchase of the government bond in which the latter verifies that it will use the applicant’s contribution to subscribe the government bond for a nominal value of at least EUR 250,000 and that it will do so within 45 days of the issue date of the applicant’s residence permit.

If the application is deemed to fall into the “national interest” category based on the applicant’s investment in Hungary, the evaluating authority will presume that the applicant has the funds to provide for their livelihood, accommodation and healthcare in Hungary.

Receiving the permanent residence permit

If the regional directorate approves the application for a permanent residence permit, it will simultaneously issue a preliminary permit that enables the applicant to travel to Hungary at any time within six months and pick up their permanent resident permit in person.

The preliminary permit authorizes a one-time entry and a stay of up to 30 days in the territory of Hungary for the purpose of receiving the permanent residence permit. Once in possession of this, the third-country national may enter the Schengen Area, which includes Hungary, and may receive their residence permit document at the Budapest and Pest County Regional Directorate.

The applicant may request that the preliminary permit (described above) be mailed to a legal representative or to a foreign representative office.

The validity of the permanent residence permit

The permanent resident permit can be issued to applicants in the “national interest” category for a maximum of five years, which can be extended for up to five years at a time.

Permissible activities for holders of a permanent resident permit

A third-country national in possession of a permanent residence permit as described above may enter the territory of Hungary and may stay in Hungary within the period of validity of the residence permit. This residence permit also entitles the third-country national to stay in the territory of other Schengen member states for up to three months within any six month period.

If the third-country national would like to engage in gainful activity or take employment in Hungary, the changed purpose of the stay must be registered at the competent regional authority.

The entry and stay of family members (‘family unification’)

The spouse and minor children of third-country nationals applying for permanent residency in Hungary in the ‘national interest’ category are also entitled to submit an application for a residence permit for the purpose of family unification simultaneously with the main applicant. In their case, no special proof of ‘national interest’ is required, only a document proving the existence of the family relationship or a support declaration verifying the conditions of livelihood, housing and healthcare must be attached to the application.

Additional family members (parent, sibling, lineal relative) may also apply for family unification in accordance with the general rules specified in Hungary’s immigration law. In this case, a document proving adequate funds for the planned duration of the stay and a document proving accommodation in Hungary must be attached to the application unless these family members are also holders of the EUR 250,000 government bond and thus qualify for the ‘national interest’ category in their own right.

Preferential process for the issue of PR in the ‘national interest’ category

Third-country nationals who have been holders of any type of temporary or permanent resident permit for at least six months and whose stay in Hungary is in the interest of the Hungarian economy can also apply for permanent residency in the preferential category. Namely, if a third-country national who has been legally staying in Hungary for at least 6 months purchases a designated government bond with a nominal value of EUR 250,000, he/she becomes entitled to make a preferential application for permanent residency without having to change status. The spouse and any dependent children of such a third-country national, provided they have a valid residence permit, are in this case also eligible for the preferential treatment specified above.

UPDATE: From January 2015, the face value of the investment has increased to EUR 300,000, while the government processing fee has been raised to EUR 60,000, depending on the size of the family and related due diligence fees. Learn more here.