Private individuals can buy government residency bonds either in their capacity as a private individual or via a business in which they are a majority shareholder. Hungarian residency bonds, guaranteed by the Hungarian government, will be denominated in euros and will offer a very attractive interest-rate.

The preferential conditions mean that there is no need to live continuously in Hungary in order to become a permanent resident.

Under this preferential process, after the purchase of government residency bonds, a temporary residence permit will initially be issued. This will be converted into a Hungarian permanent residence permit after six months, this being the ‘benefit’ offered in exchange for investing in the securities. There is no need to reside in Hungary following receipt of the permanent residence permit.

János Tamás Varga, Managing Partner of VJT & Partners commented: “Taking into account the relatively low level of financial commitment required and the soft residency requirements, this new law is the most advantageous for investors seeking to relocate to the EU. The technicalities of the new scheme are fairly complex therefore a Hungarian immigration lawyer must be retained according to the new regulation.”

The Hungarian permanent residence permit allows permanent residents to travel freely within the 25 other Schengen countries for up to 90 days every six months. In addition, Hungarian permanent residency offers all the rights and benefits that citizens enjoy in Hungary but with some notable exceptions, such as not being eligible to vote in Government elections or hold a Hungarian passport.

Permanent residency provides a lawful, indefinite-term residence, which will serve as a major route to Hungarian citizenship. Those with citizenship can enjoy all the immigration benefits which Hungary’s EU membership affords, including work, travel and relocation without restrictions anywhere across the EU.

János Tamás Varga, Managing Partner of VJT & Partners, added: “The Government is still refining the technical details of the process and we will certainly keep interested enquirers updated.”

The Hungarian Government welcomes investors from all countries. A significant surge of interest in Hungarian investment is expected, and encouraged, by the Government.

About VJT & Partners

VJT & Partners is a leading independent commercial law firm in Hungary advising international and domestic corporate clients primarily in the field of business, commercial, employment and technology law. The firm’s employment practice, premier-ranked by the international legal directories, includes a full service immigration desk, focusing on business and investment-related immigration to Hungary.

See the original Press Release

János Tamás Varga, Managing Partner of VJT & Partners, commented: ”We have not previously had such a seismic change to Hungary’s immigration regulations. There is already clear evidence that real interest exists from international investors. The proposed terms are very attractive compared to other EU countries, which will, I am sure, be advantageous to Hungary.”

The new Bill proposes that private individuals or private companies, in which a private individual is a majority shareholder, that have purchased and hold €250,000 of goverment bonds (’residency bonds’) with a maturity period of a minimum of five years will qualify for this new special category and be subject to preferential treatment.

Hungarian Goverment bonds are considered as low risk investments, while offering favourable interest rates. At maturity, the original capital is returned to the investor with interest.

The ’preferential treatment’ outlined in the Bill includes exemption from certain existing requirements relating to Hungarian permanent residency. Notably there will be no need for at least three years continuous physical residence in Hungary. Also, unlike other immigration policies, legal representation will be permitted throughout the entire preferential process, meaning that a petitioner’s personal appearance or involvement in the process is not required and the whole matter can be handled through a Hungarian immigration lawyer.

Hungarian permanent residents are entitled to reside in Hungary for an indefinite period of time. Unlike Hungarian citizens, however, permanent residents cannot hold a Hungarian passport or vote in Government elections. But otherwise they enjoy the same benefits in Hungary as citizens do, including eligibility for Hungarian health care, public education, employment and welfare, among others, and they receive a Hungarian ID card. Hungarian permanent residents can travel visa-free to any Schengen state for a maximum stay of up to 90 days.

János Tamás Varga, Managing Partner of VJT & Partners, added: “An EU-wide work permit is inevitably an asset for anyone. Hungarian permanent residency may ultimately lead to Hungarian citizenship which would allow a successful applicant to work in any EU country. In addition, EU citizens can freely travel and relocate within the territory of the EU. A Hungarian passport also allows visa-free travel to a number of countries outside the EU, such as the USA and Canada. Hungarian permanent residency can also serve as springboard for a temporary resident permit in another EU country.”

About VJT & Partners

VJT & Partners is a leading independent commercial law firm in Hungary advising international and domestic corporate clients primarily in the field of business, commercial, employment and technology law. The firm’s employment practice, premier-ranked by the international legal directories, includes a full service immigration desk, focusing on business and investment-related immigration to Hungary.

See the original Press Release

In addition, the employment practice is acknowledged as follows: “the team pays attention to detail, gives reliable advice and does diligent work.”

Of János Tamás Varga, clients noted with respect to his corporate expertise: "he is extremely thorough and responsive," and "an experienced, bright negotiator with great attention to detail.”

In relation to Private Equity, clients and peers recognised that he is an "experienced negotiator" with " international standard qualities: pragmatism, intelligence and reliability."

János Tamás Varga commented, “We are pleased with our showing in Chambers Europe 2012. We feel that as a firm we have made great progress in the last 12 months and this is endorsed by this recognition from this leading independent legal directory through its ranking of our corporate, private equity, employment and TMT practices.”

Managing Partner János Tamás Varga is recommended for his work in M&A, Dispute Resolution, Employment and TMT and partner Dóra Bocskov-Szabó is recommended for her employment expertise.

János Tamás Varga, Managing Partner of VJT & Partners, commented, 'This is further endorsement of the strength of our core practice areas: corporate M&A – especially in relation to TMT - employment, dispute resolution and real estate.'

'This book will be a very useful guide for legal professionals and will also contribute to further reflection on how to make data protection more effective in 2015 and beyond' European Data Protection Supervisor Peter Hustinx said.

The article was first printed in January 2012 and further details of the book can be accessed here.

A copy of the Hungarian Chapter can be made available on request.