Russians are being offered settlement in Hungary as if it were a state programme

Since the introduction of the dubious residency bonds in spring 2017, there has been no golden visa-like paid state immigration option for wealthy foreigners in Hungary. However, advertisements targeting foreigners less familiar with the domestic situation suggest that there is still some kind of paid state scheme that could help foreigners obtain EU residency or even long-term citizenship, allowing travel within the Schengen area.

However, there are perfectly legal immigration pathways in Hungary, along the lines of other EU countries, which could be tempting for the wealthier.

However, on Russian-language websites, they are often misleadingly presented as state resettlement schemes linked to "real estate or other investments". In recent months, there has been a growing number of offers of resettlement or visa schemes in Hungary, often leading to Russian companies with unidentified backgrounds, but there are also Hungarian operators.

Several Hungarian legal immigration operators have noticed the appearance of such advertisements, almost all of whom have indicated that they have not seen an increase in enquiries from Russia, but all of them have warned that many grey operators, or those who rip off their clients, have started to take advantage of the legal opportunities and see the Russia-Ukraine war as an opportunity.

In the case of the latter, the method that has been promoted in recent Russian-language advertisements is typically the same: it is easy to obtain Hungarian papers by buying two properties and setting up a company. The general solution is to rent out the purchased property and set up a company for this activity, in which case many immigration brokers also take on the task of finding tenants.

Immigration permits for gainful employment

Many wealthier entrepreneurs have already been attracted to Hungary by the "residence permit for the purpose of earning income", which has been operating in various forms for about 20 years. Such a permit can be granted to third-country nationals whose purpose of residence is to engage in an activity for which they are legally entitled to engage in independently for remuneration or to work as a manager of a company, cooperative, etc.

The rationale behind the procedure is basically to provide a controlled, legally verifiable option for non-EU persons who want to make some form of profit in Hungary, pay tax legally and have personal control over their company's activities.

And the conditions here can also be attractive for a foreigner: compared to some Western countries, domestic price levels are lower (or used to be lower, in nominal terms at least), property prices and rents are much more affordable, while the corporate tax rate is only 9%.

And the fact that Hungary can be a good business environment for many people is shown by the fact that, according to the Directorate General for Aliens Policy (OIRF), 1,000-1,500 applications for residence permits for the purpose of earning income were received annually in previous years. It is difficult to navigate between the statistics, because until 2016 they were published under the heading of gainful employment, which also included work applications, but since then the data can be seen separately: in 2017, 1,098 such applications were submitted, in 2018 1,431, in 2019 1,563 and in 2020 1,229.

In response to a question from Portfolio, the OIRF has now said that a total of 3,462 applications for residence permits for income purposes were submitted in 2021 and 2022.

And statistics available on the Directorate General's website show that 1928 applications were submitted last year alone, almost 30% more than in 2021. However, it is not entirely clear whether these are all first-time applicants or whether the figures include renewal applications.

We were also informed that the largest number of applications were typically from Thai, Chinese, Russian, Mongolian, Indian, Turkish, Ukrainian, Pakistani, Iranian, South Korean and American citizens. Napi.hu's previous data request shows that in 2020, 283 Chinese, 120 Thai, 118 Iranian, 82 Turkish, 72 South Korean and 554 other nationalities were registered, so the appearance of Russian or Ukrainian nationals is a new phenomenon. Although 79 Russians were known to have applied in 2019, Ukrainians never appeared among the nationalities listed.

Claimants are often victims of the situation

The packages based on the purchase of real estate are priced at €220-250 thousand by professional, credible operators, who include a €60 thousand brokerage and agency fee in this amount. Now, however, many Russian-language advertisements add the service provider costs of between EUR 20 and 60 thousand to the EUR 220-250 thousand figure. In the latter case, the advertisements are often ambiguous as to whether these are state costs or the service fees of the respective settlement companies.

Depending on the HUF exchange rate, the programme is not cheap, it can cost a client up to HUF 75-80 million, and even more if they deal with a more expensive administrator.

Since Hungarian is a difficult language and immigration administration is inherently complicated, lawyers are needed to set up companies and write contracts, and applicants for permanent residence are often ripped off by profiteering entrepreneurs. Frequently, they turn to trustworthy companies, well-known on the market, for help afterwards if they discover that they have been cheated out of a lot of money: most often, the real estate they have bought is overpriced, or even a loan contract is smuggled in with the signed documents. It is also not uncommon for them to advertise for a residence permit, but in reality they are only being offered a visa. In addition, it is also a common scam to promise applicants that family members will be granted a second round of permits, which does not materialise.

Because they are presented as a government scheme, many people believe that there is some guarantee that they will be able to obtain a residence permit, retaining the documents they have already received. Except that the dishonest operators usually have several intermediaries, which build on each other in the process, and it is difficult for the duped foreigners to know who they can take legal action against.

Often the immigrants concerned are also tricked into believing how quickly and after how long they can obtain Hungarian citizenship. Sometimes 6-12 months are written in the advertisements, which is completely different from the Hungarian legal system and the practice of the authorities, which grants this right after 8 years of residence.

This high cost may also explain why there does not yet seem to have been a mass influx of people from Russia to Hungary: only 30 companies in Opten's database dealing with real estate transactions were found to have been founded by Russian interests since 2022, the year of the war. Previously, there were 2-5 such companies per year.

Another explanation could be that, as Hungary is also an EU country, even though the advertisements call Hungarians friendly people who are nice to the Russians, many people are afraid of sanctions. In Serbia, the wave of immigration is much more impressive: 4,500 companies have already been set up there by the more than 200,000 Russians who have arrived in the last two years, according to an article on Politika.rs.

Digital nomads have not invaded the country either

Another option that is much easier for non-EU nationals to obtain is the White Card for digital nomads. The only condition is that the applicant must have a documented employment relationship in a country outside Hungary in a job where he or she can perform it from anywhere using some form of digital technology. In addition, it is also possible to apply if someone has a share in a company with a proven profit in a country outside Hungary and can manage their work or business from Hungary.

But monthly living expenses must be proven (minimum income of €2,000), and the time spent in Hungary while holding the card does not count towards the period of residence, and cannot be extended to family members.

When contacted by Portfolio, the Directorate General for Aliens Policy also said that a total of 609 White Cards were applied for by foreigners in 2021-2022, all countries combined.

This option is not even explicitly advertised to Russian citizens, but rather other means of resettlement. Among these, offers advertising other immigration opportunities have also recently appeared on the internet, priced at €155,000. This has not yet become dominant on Russian-language sites, but Chinese or Arabic portals have been posting a lot of advertisements in the last month and a half, often advertising them as if they were backed by a state programme and that paying the money would guarantee residency.

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