Hungary Enacts 3 Consequential Changes to Its Upcoming Guest Investor Program

Csaba Magyar
Budapest

Under the new Hungarian Immigration Act, the Guest Investor Program will start from 1 July 2024. The scheme provides a 20-year residence permit in exchange for one of the following investments:

• EUR 250,000 acquisition of investment units issued by a real estate fund registered with the National Bank of Hungary
• EUR 500,000 acquisition of residential property in Hungary; or
• EUR 1 million donation to an institution of higher education run by a public trust with a public-service mission.

But before the program has even formally opened, the Hungarian Parliament has already made changes to the law. The recently amended legislation took effect on 11 May 2024. Apart from minor clarifications, the substantive changes fall into three chief categories:

1. Guest Investor Visa amendments

The first step in obtaining a residence permit as a guest investor is to apply for a Guest Investor Visa. Only once you hold a Guest Investor Visa can you apply for a residence permit as a guest investor. The guest investor is required to travel to Hungary with the Guest Investor Visa and make the investment. Under the original legislation, the investor had two years to enter the country. Under the new rules, this is reduced to six months.

2. Real estate investment amendments

The residential property can only be acquired from 1 January 2025. Properties acquired before this date will not be eligible for the scheme. In practice, this means that investors considering buying property will have to wait until early next year. As such, only those who buy units in a real estate fund or opt for the endowment will be able to participate in the scheme from 1 July, while those who prefer direct property ownership will need to wait a few more months.

See also: Everything You Need to Know About Hungarian Golden Visa Property Investment

3. Fund investment amendments

The question of which real estate fund managers are eligible to participate in the Program has long been an issue. Under the amendments, only those who are on the list of qualified market operators will be eligible to participate in the Program.

The Constitution Protection Office maintains this list of qualified market operators. The Office will include in this list the fund managers who apply for inclusion based on a successful prior national security screening.

The preliminary qualification consists of a company check, a personal check, and an examination of the economic operator’s field of activity.

See also: Everything You Need to Know About Hungarian Golden Visa Real Estate Funds

Furthermore, in order to participate in the Program, alternative investment fund managers must be authorized to manage at least the following asset values:

• EUR 100 million
• EUR 500 million, where the AIF’s portfolios consist of AIFs that are not leveraged and for which redemption rights cannot be exercised within five years of the date of the initial investment in certain AIFs.

In an additional case, non-alternative investment fund managers may also participate in the Program, provided they manage a real estate fund with an asset value exceeding EUR 600 million.

As is evident, it can take time for real estate fund managers to be included in the list of qualified operators, so it is worth waiting for the guest investors and making sure that they acquire investment units managed by a legally compliant real estate fund manager.

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