Investing in Budapest: Hungary Introduces Guest Investor Program

Published: November 21 2023

Hungary's government has introduced a new program called the "guest investor status," which offers residency sales to foreign investors in the country. This program aims to attract foreign investors and allows stays exceeding 90 days, multiple entries, and the option to apply for a guest investor residence permit. However, the program has raised concerns due to its potential impact on real estate funds associated with Prime Minister Viktor Orbán's son-in-law, István Tiborcz.

The "guest investor status" is part of Hungary's efforts to tighten migration policies in response to mass immigration. It permits stays longer than 90 days, multiple entries, and grants the option to apply for a guest investor residence permit, similar to the now-discontinued Golden Visa program. This status aims to attract foreign investors to Hungary.

The introduction of the guest investor program has raised questions regarding its potential impact on real estate funds connected to István Tiborcz, who is Prime Minister Orbán's son-in-law. These funds, including the Central European Real Estate Fund (CEI) and Diófa Thales, have the potential to significantly increase their turnovers through the new program. It is worth noting that this connection has raised eyebrows among critics.

To be eligible for the guest investor status, individuals must either invest in Hungarian real estate funds or meet specific criteria, such as purchasing real estate worth at least EUR 500,000 or providing a grant of EUR 1 million to a designated higher education institution. This program is attracting a record number of foreign buyers in the Hungarian real estate market, particularly due to the cost-effectiveness of obtaining a residence permit through investment in real estate fund units.

The European Commission (EC) has expressed reservations about investor resettlement schemes, including Hungary's guest investor program. The EC is concerned about potential issues like money laundering, tax evasion, corruption, and the possibility of sanctioned individuals from Russia and Belarus obtaining Schengen visas through these programs. The EC has recommended that governments conduct rigorous checks before granting residence permits under such programs.

Overall, Hungary's guest investor program offers foreign investors the opportunity to obtain residency in the country, but its connection to Orbán-linked real estate funds and concerns raised by the European Commission warrant careful consideration of the potential implications.

What is the guest investor status in Hungary? The guest investor status in Hungary is a residency program introduced by the government to attract foreign investors. It permits stays exceeding 90 days and multiple entries, and there is an option to apply for a guest investor residence permit.

What is the purpose of the guest investor status in Hungary? The guest investor status in Hungary is part of the government's efforts to tighten migration policies in response to the crisis situation caused by mass immigration. It aims to attract foreign investors to the country.

What are the investment criteria for obtaining guest investor status in Hungary? To qualify for guest investor status in Hungary, individuals must either invest in Hungarian real estate funds or meet specific criteria, such as purchasing real estate worth at least EUR 500,000 or providing a grant of EUR 1 million to a designated higher education institution.

What are some of the concerns raised about the guest investor program in Hungary? There are concerns about potential issues like money laundering, tax evasion, and corruption associated with the guest investor program in Hungary. The European Commission has expressed reservations about investor resettlement schemes and urged governments to conduct rigorous checks before granting residence permits under such programs.

Are there any real estate funds associated with the guest investor program in Hungary? Yes, there are real estate funds associated with the guest investor program in Hungary, notably the Central European Real Estate Fund (CEI) and Diófa Thales. These funds, listed among the 24 funds registered with the Central Bank, have the potential to significantly boost their turnovers.

Is there a record number of foreign buyers in the Hungarian real estate market? Yes, there is already a record number of foreign buyers in the Hungarian real estate market. The guest investor program in Hungary adds to this trend, as the most cost-effective route to obtaining a residence permit appears to be through investment in real estate fund units.

What are some of the concerns of the European Commission regarding investor resettlement schemes? The European Commission is concerned about the possibility of sanctioned individuals from Russia and Belarus obtaining Schengen visas through investor resettlement schemes. They have also expressed concerns about potential issues like money laundering, tax evasion, and corruption associated with these schemes.