Hungarian Residency Bond Program I. HUNGARIAN RESIDENCY VIA RESIDENCY BONDS To strengthen the Hungarian economy and to diversify its external funding sources, at the end of 2012 Hungary enacted a new legislation, which introduced the concept of Residency Bonds. The new Residency Bond system is considered as one of the best residency programs in the world, as other countries offering Residency Investment Programs either require a substantial real estate purchase or a much higher financial contribution. A residency permit in Hungary can be received via purchasing a specially issued bond with a value of minimum EUR 300,000 and with a maturity of minimum 5 years. The applicant may purchase the above bond as an individual or via his/her majority-owned company. Expiration: around Christmas after 5 years. This bond can be issued exclusively by a finance company which received a permission to do so from the Economics Committee of the Hungarian Parliament. This finance company is legally required to immediately buy a specially-issued government bond from the investment proceeds. Thus, the bonds issued by the finance company are fully backed by the Hungarian Government Bonds. The finance company is also required to file a monthly list of participants in the Residency Bond System to the Immigration and Citizenship Authority. After investing at least EUR 300,000 under the Investor Residency Bond Program, a residency permit will be initially issued to the investor. The initial residency permit is valid for 3 or 5 years. After having the residency permit for more than 6 months, this permit can be converted to a permanent residency which is valid for life. After the bond is paid back, the applicant is still qualified for permanent residency.
II. WHY HUNGARY? AN IDEAL PLACE TO LIVE Hungary can offer many advantages to those who wish to be its residents. Located in the heart of Europe, Hungary is a country of stable political system and economy. Its good public security and excellent infrastructure makes it an ideal place to stay and establish business. Owning a Hungarian permanent residency permit guarantees all the rights and benefits that citizens enjoy in Hungary (however, there are some exceptions, such as not being eligible to hold a Hungarian passport or vote in national government elections). The Hungarian permanent residency holder may live, stay and work in Hungary for an indefinite period of time. He or she is allowed to enter Hungary without a visa and stay in Hungary without any time limitation. The favorable personal and corporate tax rates, zero inheritance and gift tax (in certain circumstances) also makes Hungary a great choice not to mention its friendly people, great sites, rich cultural life and exquisite cuisine Hungary is also a good choice for families: permanent residency holders are entitled to attend Hungarian public schools without any restrictions. THE FREEDOM TO TRAVEL Hungary is one of the members of the EU Schengen countries for free movement of persons. Therefore, the investor holding a Hungarian permanent residence permit can travel within the Schengen area (26 European countries) without a visa (using his Hungarian ID documents evidencing his permanent resident status in Hungary), and stay in countries of the Schengen area other than Hungary up to three months every six months. The new Residency Bond system is considered as one of the best residency programs in the world, as other countries offering Residency Investment Programs either require a substantial real estate purchase or a much higher financial contribution.
*26 European countries: Austria, Belgium, Czech Republic, Denmark (except Greenland and Faroe Islands), Estonia, Finland, France (except overseas territories), Germany, Greece, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands (except overseas territories), Norway (except Svalbard), Poland, Portugal, Slovakia, Slovenia, Spain (with special provisions for the provinces of Ceuta and Melilla), Sweden, and Switzerland. Exceptions: United Kingdom, Romania, Bulgaria, Cyprus, Croatia, Ireland OBTAINING A RESIDENCY PERMIT A third-country national, whose entry and stay is considered to be of a national economic interest of Hungary, via a special investment indirectly into the Hungarian Residency government bonds and a special procedure can now obtain a permanent residency permit in a streamlined procedure. The Hungarian Residency Bonds cannot be purchased directly by the applicants, only indirectly through Residency Bond Agents. A Residency Bond Agent is a special finance company which is licensed by the Economics Committee of the Hungarian Parliament to offer participation in the Residency Bond Program. It is not permitted to have any other activity, thus strengthening the safety of the investment.
III. STEPS TO OBTAIN THE RESIDENCY Step 1 - Information and declaration DEM GROUP Pty. Ltd. signed an agreement with the Residency Bond Agent company, according to which DEM GROUP is authorized to contact clients and provide them information about the procedure. The first step on behalf of the Client: contact DEM GROUP or a contracting partner of DEM GROUP, and propose his/her questions about the program, in connection with the terms and conditions and opportunities. Step 2 Check the collection of the documents Regulations laid down in the Immigration Act and international best practices require us to obtain the following documents from the applicant(s): Copy of passport Copy of ID card 1 original bank reference letter issued by an internationally recognized bank, the letter not older than 6 months 1 original professional reference (e.g. from an attorney, notary public, charted accountant or other professional of similar standing), the letter not older than 6 months 1 original document of evidence of residential address (e.g. certified copy of a recent utility bill or bank statement showing full name and address, or written confirmation from a bank, attorney, chartered accountant or notary public) Statement of source of funds to be invested in the Residency Program Police no-criminal record certificate Initiation of the program (in case of extension to family members). Direct relative shall be defined as one spouse of the opposite sex and minor children: 1.) [applications] may be submitted simultaneouslyfor all family members (spouse and minor children),
2.) it is also possible for the Client to submit his/her application independently, then once he/she is granted the residency permit, the family members can submit their own documents. When the Client has decided to participate in the program, he/she shall notify DEM GROUP of this and fill out the Client Declaration. DEM GROUP shall send the Client Declaration and the photocopy of the Client s personal document (personal ID card or passport) to the Residency Bond Agent. Throughout the remainder of the procedure, an employee of the Residency Bond Agent shall maintain contact with the Client in all matters. The Client shall solely pay all fees directly to the Residency Bond Agent company. Neither DEM GROUP or to its contracting partners are permitted to accept the fees. Step 3 Bond subscription The applicant sends EUR 300,000 directly to the Residency Bond Agent. Upon receipt of this amount the Residency Bond Agent shall issue its own registered security (e.g. its own corporate bonds) with a face value of EUR 300,000 and with a five years maturity to the investor*. This corporate bond must have the same maturity and amount of the government bond into which the Residency Bond Agent must invest the funds. As a result, the corporate bonds owned by the investor will be fully backed by the specifically allocated Hungarian Residency Bond. Concurrent with issuing its own security to the investor, the Residency Bond Agent shall provide the investor with an irrevocable declaration, where the enterprise certifies that a treasury bond for a nominal value of 300,000 Euro with a five years maturity will be purchased from the funds received from the investor within 45 days upon issuing his/her residence permit. In the separate agreement between the applicant and Hungarian Bond Agent, there is a separate EUR 40,000 procedure and administration fee. If the procedure is unsuccessful, this fee shall not be refunded to the Client. Clients of DEM GROUP within the framework of the standard procedure shall pay a discounted price of 38,000 instead of 40,000.
Step 4 Residency application The application for a temporary residence permit should be submitted personally to the consular officer of the Hungarian Consulate for the applicant s residency prior to entry to Hungary with the application fee of EUR 60/person. At the time of application the proceeding authority records the biometric data (fingerprint, photograph) of the applicant. Initiation of the program (in case of extension to family members). Direct relative shall be defined as one spouse of the opposite sex and minor children: - [applications] may be submitted simultaneously for all family members (spouse and minor children), - it is also possible for the Client to submit his/her application independently, then once he/she is granted the residency permit, the family members can submit their own documents (see information below) Simultaneously with the application, the applicant s spouse and children (if minors) are also entitled to apply for a residence permit with the purpose of family unification. In their case there is no need to prove the national economic interest by investing additional funds; however, documents certifying the existence of family relations and support declaration by the head of the family certifying responsibility for the living costs, housing, and health care shall be attached to the application The applicant must provide the following documents to the consular officer: Valid travel document 2 original passport-sized photos of the applicant Proof of ownership for the corporate bond issued by the Residency Bond Agent. Irrevocable declaration of the Residency Bond Agent that the Hungarian Government-issued Residency bonds will be purchased in less than 45 days A Power of Attorney issued to a Hungarian lawyer to act as a legal representative. This Power of Attorney must be signed by the applicant and must be certified by the consular officer. If all the documents are in order and the respective conditions are fulfilled, the Hungarian Immigration and Citizenship Authority are expected to issue the residency permit in 8 working days. The applicants must be screened by the relevant Hungarian intelligence authority. The Client shall receive the residency permit as a separate document. At the time of filing the residency application, the applicant must decide whether he/she wants to take delivery of the residency card in person in Hungary or would prefer to have the card sent to the
lawyer representing him/her. In the first case after the residency permit is issued, the applicant could apply for a 30-day visa to travel to Hungary, which will be immediately granted. Step 5 Permanent residency After 6 months the Hungarian residence permit can be converted into a permanent residence permit by visiting either the responsible office of the Immigration and Citizenship Authority or the Hungarian Consulate. During the procedure, the Client must appear in person. The Client shall receive the residency permit as a separate document. (ID Card, permanent residency) This present informational material was prepared to provide information, and shall not under any circumstances constitute an offer.