Kiss: Much Faster Process, Lower Thresholds Key to Hungary Outcompeting EU Golden Visa Rivals

Speaking to IMI on the sidelines of the Global Citizen Week Cairo 2024, Lazslo Kiss, Managing Partner at Discus Holdings, fielded questions about Hungary’s new golden visa, the GIP. Europe’s newest residence by investment program, applications for which will open in July, promises to give rival EU golden visas in Spain, Portugal, and Greece formidable competition.

“How trustworthy can the Portuguese government be, changing the rules so many times and taking out the property component?” asked Kiss in response to questions about how the Hungary GIP will impact the competitive landscape in Europe. “Greece? How many times have they changed their thresholds? Now it’s €800,000. Hungary is half a million or €250,000.”

Considering the lower property investment thresholds and the similarly high quality of life in Hungary, the program is likely to be competitive “money-wise,” he argues.

Moreover, Kiss is confident that the Hungarian scheme will stand out to investors seeking a hassle-free and quick application process. Backlogs counting thousands of applications are now leading to serious processing delays in Greece and multi-year wait times in Portugal.

“Last time Hungary had a program, they processed applications in three months,” Kiss points out. This was despite the program’s high application volume, which reached several thousand a year. “If [applications] are processed in three months also this time, then this program will be the best, because clients want to see results.”

Hungary’s golden visa will open this summer with three routes for investors:

• A €250,000 investment in real estate funds, which must hold 40% of assets in Hungary;
• A €500,000 investment in new residential units (meant to pre-empt any negative impact on property prices for locals); or
• A €1 million donation to scientific or creative research/institutions.

See also: Dr. Csaba Magyar's detailed guides on the Hungary GIP's fund investment and real estate investment options.

While Kiss is clear that he expects hardly any applications to come in under the donation option, he isn't confident about which of the two investment options will ultimately become more popular.

"Sometimes, people prefer a lower amount, and sometimes they prefer direct ownership. […] What the ratio will be, I can only guess. 60/40 in favor of funds? Probably, they will favor the €250,000 option because it's a smaller amount of money."

New GIP should have none of the risks of the erstwhile bond program

This isn't Hungary's first foray into the golden visa market. The Residency Bond Program, which opened in from 2013 was plagued with controversy, corruption allegations, and nepotism before closing in ignominy in 2017. Kiss foresees no such complications this time around, because of the direct nature of the investments.

The former program, he remarks, "was an indirect government bond purchase program that included some counter-party risk. If the agent went bankrupt or wanted to steal the money, that was theoretically possible."

For the new program, Kiss points out, money is going directly into funds and properties, so there is "no real chance that anything like that could happen."

In the full 7-minute interview, available in the IMI Pro Members' Lounge, Kiss further discusses:

• The complicated bureaucratic procedures that authorities need to address to make Hungary's golden visa a success
• The potentially negative impact of the physical presence requirement to qualify for permanent residency
• Why shortcomings in the program regulations - such as the inability to include adult dependents - will be ironed out over time

IMI Pros who can help with Hungary residency