Since a great number of our clients have expressed interest in the Hungarian government’s new program granting permanent residency to investors, we have decided to share with you the text of the actual amendment to the immigration law that was passed last December. While the text below is quite vague, please find some guidelines for interpreting it below:
* “national interest” has been re-defined as to include investors who participate in the particular investment program mentioned below and made more specific in a governmental decree that has also been published since (check the next blog post!)
* there will be a designated organization for each country of origin (referred to in the law as “enterprises”) that will be licensed to actually issue the relevant bonds, and these organizations will cooperate with agencies (such as Helpers) based Hungary for the implementation of the application process; since Helpers works with a number of such licensed organizations, we will be able to assist you “on the ground” regardless of where you come from!
* the value of the bonds will be uniformly EUR 250K, and the run time of the program will be five years Feel free to peruse the text (containing all relevant parts of the amendment) below for details, and please direct any questions you may have regarding the implementation to investment@helpers.hu!
Act CCXX of 2012 amending Act II of 2007 on the Entry and Stay of Third-Country Nationals
Article 1 The following paragraphs (3)–(11) are to be appended to Article 28 of Act II of 2007 on the Entry and Stay of Third-Country Nationals (hereinafter: Third-Country Nationals Act):
“(3) A third-country national who fulfills the conditions specified in points a) and c)–i) of Article 13(1), and whose investments in Hungary qualify their entry and stay as being in the interest of the economy at large may receive a residence permit “for other purposes”.
(4) For the purposes of paragraph (3), a third-country national’s stay in Hungary is considered to be “in the interest of the economy at large” in particular if
a) the third-country national who is applying verifies that he/she or a company in which he/she holds a majority stake (the third-country national and/or his/her company hereinafter collectively referred to as: “third-country entity”) own(s) a security with a nominal value of at least EUR 250,000 and a duration of at least five years which security is issued by an enterprise that meets all the following conditions:
aa) the enterprise invests exclusively in zero-coupon Hungarian government bonds issued for this particular purpose with a nominal value of EUR 250,000 and a duration of at least five years, and does so only under the conditions specified in a decree issued by the minister responsible for public finances; this bond, which will be repurchased by the issuer at the nominal value upon maturity, is issued at a discount price, less interest, where the discount interest rate at the time the bond is issued is 1.5 percentage points lower than the secondary market yield of the euro-denominated bond issued by the Hungarian State with the residual maturity closest to five years, but no less than 2 per cent;
ab) the enterprise has a contract with the Government Debt Management Agency (ÁKK Zrt) concerning the activity specified in subpoint aa);
ac) the enterprise issues only registered securities; and ad) the enterprise has all of the necessary licenses to carry out the above activity according to the laws of the relevant country [of origin of the applicant]; and b) the applicant attaches the (final and irrevocable) declaration of the enterprise specified in point a) to the effect that it will use the applicant’s contribution for subscribing the government bond specified in subpoint aa) of point a) for a nominal value of at least EUR 250,000, and will do so within 45 days of the issue date of the applicant’s residence permit.
(5) The contract specified in subpoint ab) of point a) of paragraph (4) may be concluded only with enterprises approved by Parliament’s Standing Committee for Economic Affairs.
(6) The Parliament’s Standing Committee for Economic Affairs shall approve only one such enterprise to serve each third country [of origin of applicants].
(7) The approval specified in paragraph (5) must be withdrawn if the enterprise provides false data or violates its obligation to subscribe the designated bonds.
(8) The Parliament’s Standing Committee for Economic Affairs shall notify the immigration authority and the Government Debt Management Agency if an enterprise’s approval has been withdrawn. In this case, the Government Debt Management Agency will terminate the contract specified in subpoint ab) of point a) of paragraph (4).
(9) In order to help monitor the number of applicants entitled to residency, the enterprises issuing the securities shall submit a consolidated report to the immigration authority by the tenth day of every month. The report is to include the number of securities issued in the given month, the personal details of the buyers of the securities, and, in case the third-party entity is a company, the personal details of the majority shareholder, the number of government bonds subscribed by the enterprise in total, and data as to which applicants’ contributions were used for bond subscriptions. The immigration authority shall file the data provided by the enterprise for six years.
(10) The residence permit will be revoked if the government security to which it is linked is not subscribed within the deadline specified in point b) of paragraph (4).
(11) With the exception of cases where appearance in person is stipulated by law, legal representation is compulsory in the procedure specified in paragraph (3).”
Article 4 This Act enters into force on the day following its publication.
János Áder (m.p.)
President of the Republic
László Kövér (m.p.)
Speaker of Parliament
* This Act was passed by Parliament on 11 December 2012.
UPDATE: with 1 January 2015, the face value of the investment has been increased to EUR 300,000.
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