Foreign investors can apply for business residency in Hungary on the same conditions as everyone else, provided they can prove that they own or control a Hungarian firm offering goods or services, or invest at least EUR 155,000 in real estate. Once the company has been set up, it will receive a corporate tax rate of 9% on its profits.
As a candidate, you should be aware that your family members will also be eligible to reside during the same time period. It is possible to renew residence permits, but you should spend at least two months in Schengen-area countries within the last six month period before applying to renew.
This information can often raise a number of questions among those who are interested in the process. We spoke to Dr Csaba Magnyar, TEP and LLM. He is the managing partner of Crystal Worldwide Law Firm in Hungary, which has over 30 years’ experience in corporate, tax planning, and immigration. You can benefit from his insights on the way to Schengen Immigration through Investment.
What is the Hungarian “Residency by Investment” program, which is active in Schengen countries at present?
Investors can obtain a Hungarian “Residency by investment” permit for three or five years. A residency permit in Hungary allows the holder to travel freely throughout the Schengen Area. You can travel easily between these countries. It is important to know the tax implications and the way the process works.
What are the requirements for the Hungarian Residence Permit by Investment?
You can invest in the Hungarian Residence Permit and benefit from it.
- Company Formation in Hungary. You can create a business in Hungary to trade goods or provide services. You can get a Hungarian business residence permit after investing in this investment for up to three years.
- Second option: direct investment in real estate of at least EUR 155,000. You can apply for a Hungarian residency permit up to five years. The type of property is not restricted; either it’s a residential or commercial property. Investors are allowed to rent the property.
According to the latest statistics from the Hungarian Central Statistical Office (CSO), the average price of new homes in Hungary is approximately EUR 145,000.
What is the Hungarian Immigration Procedure in Practice?
In practice, either you establish your company in Hungary, or buy real estate (at least EUR155,000). You can then apply and receive a residence permit that is valid for a period of three or five year. The residence permit application is simple to complete and can be done at the Hungarian Consulate of your country.
A Schengen Area residency permit is valid in all Schengen Countries.
Family members of the investor can then apply for their own residence permits. You renew your residence permit when it expires in three or five year. To renew your permit, you need to have spent at least 90 days of the last 183 in the Schengen Area. This means that you must spend at least two or six consecutive months in the Schengen Area to renew your residence permit.
What are the benefits of a’residence by investment’ for HNWIs?
The scheme allows foreign investors to invest easily in real estate in Hungary or in a business. The scheme also allows them to travel within the Schengen Area.
Hungary has a corporate tax rate of 9% on profits. It is the lowest rate of corporate tax on profits in the European Union. It is this that makes doing business in Hungary attractive to investors, particularly from abroad.
What are the benefits of living in the Schengen Area, including travel freedoms?
Traveling freely between the 27 Schengen Area countries is one of the biggest benefits to living in the Schengen Area. The Schengen Area does not require a passport and there is no border control.
What are the major legal and financial risks to be aware of during this process?
Most people fall into the trap of not meeting deadlines, making an inadequate investment or not fulfilling all requirements to open a business, purchase real estate or invest in it. Before renewing your permit, you must also meet the 90-day requirement in the Schengen Area. This is a great option for those who want to travel and see multiple locations.
What are the benefits of starting a company in Hungary?
Start a business in Hungary to get residency in this Schengen Area country. You can now travel freely to any country in the Schengen Area. You won’t even need to carry a passport.
Profit from the lowest corporate income tax rate in the European Union, which is just 9%. Hungary has also signed tax treaties in 80+ countries. This means that you will not have to worry about double taxation. The option is attractive to many different types of investors.
The area has a lot of high-quality real estate, which is ideal for investment. Many people are attracted to immigration through investment because of this aspect.
Hungary has a 9% tax on corporate profits. It is the lowest rate of corporate tax on profits in the European Union.
Why would it be a good idea for you to hire a tax and immigration lawyer?
A competent attorney will help to ensure the smooth running of your entire transaction. You will always have someone to turn to when you need answers. You’ll stay on top deadlines and correctly file all paperwork. It can be challenging, especially if this is your first time.
Experienced immigration and tax attorneys will guide you through the process. They’ll make sure you don’t miss any deadlines, and you know the fees you need to pay. Also, they will help you to understand the documents required for the process. They can help with administrative tasks as well as other tasks such opening a bank.
These lawyers can also help you to ensure that you pay your taxes on time and do what is required. They will also protect you if you’re buying real estate. An immigration and tax attorney helps you to stay on the right side, whether you’re in the United States or another country. They can help you with everything from ensuring you buy something legally, to making sure it is properly insured.
Your immigration and tax attorney can help you overcome any language barrier. Their assistance is crucial if you do not speak Hungarian fluently. If they are not present, they will make sure that you have a translator and may even assist you in finding language tutors. By investing in the Schengen region, you can avoid letting your language be a barrier to immigration.
Some tax and immigration attorneys can help you to find smart investments in real estate that will not only provide you with residency, but also allow you to invest. Some may even provide services like serviced offices to your business. You may also see services such as tax services, filing of paperwork, legal assessment, and providing contacts to other businesses or goods.
Your immigration and tax lawyer will also be able to help you overcome any language barrier.
This article should help you better understand the Schengen region’s immigration process. The freedom to travel freely between the 27 countries that make up this area is attracting more investors. There’s no doubt that the population and business will continue growing in the Schengen area.
You will receive expert financial, tax, and legal advice from the right service. You will be able to get the best piece of property for your needs with their help. Your lawyer will help you to manage the administrative side of things and represent your interests. If needed, they will also provide banking assistance and accounting services.
You will also receive the same level of attention, help with any language barriers, and a single point of contact to assist you. This and other reasons make it essential to hire an experienced attorney to assist you in your journey towards Schengen Immigration through investment. You don’t want to waste time or money on a process that you can get right the first time.
Dr Csaba magyar, Managing partner
Tel: +36 1 383 0333
Dr Csaba Magyar is Managing Partner at Crystal Worldwide Law Firm. His practice focuses on international wealth planning and tax planning. He has handled complex transactions, and successfully managed cross-border taxation issues and investment matters for corporate and individual clients. Dr Csaba magyar offers immigration services and fiduciary solutions for HNWIs.
Crystal Worldwide Group specialises in international business consulting, tax planning and asset protection. In our 25 years of operation, we have provided professional and legal solutions to save tax and protect assets, as well as fast, timely and discreet services.