On 1 January 2024, the Act XC of 2023 on the General Rules for the Entry and Residence of Third-Country Nationals (Btátv.) entered into force, the main innovation of which – and the subject of our article – is the introduction of the so-called “foreign investor status”, which will be available to those entitled to it from 1 July 2024.
Below we will briefly describe the three stages of the domestic presence open to foreign investors and the main requirements related to them: the foreign investor visa for a shorter stay, the foreign investor residence permit which, as a general rule, entitles to a ten-year stay and the national residence card for permanent residence.

The foreign investor visa

The first step to becoming a foreign investor is the “foreign investor visa”, which is issued for a maximum period of two years and entitles the visiting investor to multiple entries, to stay for more than 90 days in 180 days and, most importantly, to apply for a foreign investor residence permit.

To obtain a foreign investor visa, a number of conditions must be met: the entry, stay and investment must be related to the national economic interest, the foreign investor must have valid travel documents and the necessary authorisation to return or continue the journey, must provide proof of the purpose of entry and stay, must have financial means to cover their expenses, health insurance and must not be subject to an entry or stay ban or SIS alert.

In addition to all these conditions, the visiting investor must declare that they intend to make an investment of national economic interest (for which they will need to provide the necessary legitimate funds) and that they undertake to make this investment within three months of entering Hungary.

The law considers the following three types of investment to be of national economic interest:

• the purchase of investment units of a real estate fund registered with the MNB with a value of at least EUR 250,000,
• the acquisition of ownership of residential property located in Hungary with a value of at least EUR 500,000, for which a prohibition of alienation and encumbrance is registered for 5 years,
• making a monetary donation of at least EUR 1.000.000,- to a higher education institution maintained by a public foundation with a public function.

If one of the above conditions are met and the investor obtains a foreign investor visa, they will be eligible to apply for the next level of foreign investor status, i.e. the foreign investor residence permit.

Foreign investor residence permit

The foreign investor residence permit entitles the holder to reside in Hungary, to work without restrictions and to act as a managing director of a company or legal entity. In addition to the above-mentioned criteria foreign investor visa, the foreign investor residence permit also requires the holder to have a place of residence or domicile in Hungary. The visiting investor must also prove to the aliens’ policing authority within 3 months of entering the country that they hold at least one of the investments of national economic interest described above.

The residence permit for a visiting investor is valid for 10 years and may be extended once for a further period of 10 years, provided that the applicant still holds the investment for which the application is made at the time of the application for extension. It should also be pointed out that a family residence permit can be applied for in connection with the foreign investor residence permit, which entitles the family members listed in the law to enter and stay in Hungary.

National residence card and EU residence card

For foreign investors who intend to stay in Hungary for longer than the above period or even actually move or settle in the country, the national or EU residence card is available as a “last step”. Both cards entitle their holders to “long-term residence”, which in fact means indefinite stay.

The main difference between the two cards is in the conditions for obtaining them: for the national residence card, the visiting investor must have resided in Hungary for at least 3 years without interruption before applying, while for the EU residence card the required period of residence is 5 years. Leaving the country for less than four months at a time is not considered as an interruption of residence, provided that it does not exceed 270 days in three years and 300 days in five years.

A number of further detailed rules on the status of the foreign investor and the investment of national economic interest to be made by the foreign investor are laid down in the Btátv. and its implementing decree, as well as in other sectoral legislation. Should you have any questions on this subject, our colleagues are at your disposal.

The content of this post does not constitute legal or tax advice and does not create an engagement. In each case, detailed knowledge of the individual case is necessary to assess it and to find a tailor-made solution. If you have any questions, please do not hesitate to contact us at http://www.bekespartners.com/.