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Hungary

Residence Permit for the Pursuit of Gainful Activity

The Hungarian residence permit may be issued to non-EEA nationals for the pursuit of gainful activity. Non-EEA nationals intending to reside in the country and work self-employed or establish a business, cooperative or some other legal entity, or as a member of the executive, representative or supervisory board of such entity, are eligible for a Hungarian residence permit.

The purpose of the self-employed gainful activity may be verified by:
- A private entrepreneurial license, or
- Business Plan, or
- Small-scale agricultural producer license, or
- Professional service contract, or
- Any other reliable means.

In the case of engaging in a gainful activity by being owner or director or executive officer of a company in Hungary, the purpose of entry and residency will be verified if:
- The company employs at least three Hungarian citizens or persons with the right of free movement and residence in full time employment for at least six consecutive months, legitimately, without any interruption, or
- The residence of the applicant in the territory of Hungary is essential for the company, and the business plan enclosed with the application contains sufficient information to ascertain that the business will prosper to ensure the applicant’s subsistence. The contents of the business plan must be verified by credible means, such as, in particular, by supplying a work contract, a personal services contract, an agreement, or a supply or sales contract.

The Residence permit has a validity of 3 years, renewable for 3 more years, provided that the resident still conducts an economic activity. Family members can be included (Spouse, child, parent).
Once a Residence permit is obtained, you may apply for a EU Blue card, which will entitle you to travel visa-free across the European Union.

After 5 years of continuous residence in Hungary, you may apply for an EC Permanent Residence card, with a validity of 5 years, renewable. After 8 years of residence (temporary or permanent), you may be eligible to apply for Hungarian citizenship. You will be required to pass an examination in basic constitutional studies in the Hungarian language.

The required period for citizenship may be shortened if you were born in Hungary (5 years), married to a Hungarian citizen or parent of Hungarian citizen (3 years), you have Hungarian ancestors (immediate after getting your residency card) or by decision of the President of Hungary.

EEA nationals may apply directly for an Interim Permanent Residency Card (provided that the above requirements are met), which has a 5-year validity, renewable. After 5 years, they may apply for a Permanent Residence Card, which is valid indefinitely.

Requirements


Documents for proof of means of subsistence in Hungary:
- A statement from a Hungarian or foreign financial institution concerning the applicant’s bank account, or
- an income certificate issued by the tax authority for the previous year, or
- an income certificate issued by the employer, or
- a certificate issued by the employer and/or tax authority as proof of regular income received from abroad, or
- other reliable means.

Documents on Hungarian accommodation:
- A residential lease contract in proof of the rental of a residence, or
- a document on accommodation by courtesy, or
- documentary evidence to verify the reservation of accommodation and payment;
- a statement on boarding (dormitory) services, or
- a document for proof of ownership of a home, in the form of abstract of title issued within 30 days to date, or
- a real estate sales contract and a copy of the decision of the competent Budapest or county government agency granting permission for the acquisition of a real estate property, or
- other documents.

Documents on comprehensive health insurance

Documents evidencing your means of exit:
- You should provide a statement undertaking the commitment of voluntary departure of the EU if your application is refused,
- a valid passport or the permits necessary to return to your country of origin, or any other non-EU country, and
- a valid ticket for departure, or sufficient funds to purchase such a ticket, or a means of transport.

Restricted Nationalities


No nationality is officially restricted

dual citizenship


Dual citizenship is recognized in Hungary. You are not required to renounce your previous nationality to become a citizen of Hungary.


Documents Required


  • Bank Statement
  • Evidence of Residential Address
  • Evidence of Health Insurance
  • Proof of net wealth
  • Business Plan
  • Proof of ownership or rental housing
  • Medical Certificate
  • Original and photocopy of passport
  • Original or Certified copy of Birth Certificate (if applicable)
  • Original or Certified copy of Marriage Certificate (if applicable)
  • One passport-size photo
  • dual citizenship Yes
  • Family members included Yes
  • land ownership No
  • Physical residence required No
  • Personal visit required Yes
  • Language skills required No
  • Interview required No
  • Investment Single -
  • Investment Family 4 -
  • Minimum annual income -
  • Time to citizenship 96
  • Time to permanent residency 60
  • Visa-free countries 167
  • Financing available No

Country details

Hungary
HUF
36
Budapest
Europe
Hungarian
9,982,000
Hungary is a landlocked Central European country, and a member of the European Union. It is located on the Pannonian plain and has borders with Slovakia to the north, with Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. Its over 93,028 sq. m. are inhabited by almost 10 million people.

Its capital and most populated city is Budapest, as well as its main industrial, trade and transport center. Considered to be one of the most beautiful cities in Europe, Budapest has several World Heritage Sites, including, on the banks of the Danube, the Buda Castle district, Andrássy Avenue, the Heroes’ Square and its Metro, the second oldest in the world. Its official language is Hungarian and its legal tender currency is the Hungarian Florint (HUF), and for now, there is no set date for for the adoption of the euro.

Visa Free Travel

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Taxes

Tax residents in Hungary are Hungarian nationals, EEA nationals with a registration card issued in Hungary and spending at least 183 days per year in the country, foreigners permanently settled in Hungary, or not permanently settled but with their center of vital interests in the country, or spending at least 183 days per year in the country.

Tax residents are subject to income tax on their worldwide income, while non-residents are only taxed on their income arising from Hungarian sources.

Income tax rate is currently 15%. Capital gains, dividends, interests and rental income are generally taxed at a standard rate.


Municipalities levy property tax on buildings and plots. There is an inheritance tax of 18%, but inheritances to direct descendants and spouses are fully-exempted. Certain transactions involving the sale of immovable and movable properties are subject to transfer tax. There is no net wealth tax.

The V.A.T. standard rate is 27%, with reduced rates of 18% and 7%.

Regarding corporate taxation, Hungary has the lowest corporate tax rate of the European Union, at 9%. Resident entities are subject to tax on their worldwide income.

In January 2019, Hungary implemented the EU-wide Anti-Tax Avoidance Directive Measures, which include new rules on controlled foreign companies (CFCs). Under these new rules, a foreign entity or foreign permanent establishment (PE) of a Hungarian taxpayer will be considered to be a CFC if:

The taxpayer directly or indirectly holds themselves, or with associated enterprises, more than 50% of the foreign entity's or PE's capital, voting rights, or rights to profit, and if the corporate tax paid by the foreign entity or PE on its profits is less than the difference between the corporate tax that would be due in Hungary and the actual corporate tax levied on the profits.

Dividends are usually exempted from tax, except when CFC rules apply. Capital gains are taxed at a 9% rate. To learn more on Hungary corporate taxation, legal framework and tax treaties, check out incorporations.io/hungary.

This should not be construed as tax advice. Flag Theory | Passports.IO has access to a global network of qualified attorneys and accountants who can give you the proper advice for your particular circumstances. Contact us for further information.

  • Property tax Yes
  • Transfer tax Yes
  • Inheritance tax Yes
  • Net worth tax No
  • CFC law Yes
  • Tax residency days 183
  • Personal income tax rate 15%
  • Capital Gains tax rate 15%
  • Investment income tax rate 15%
  • Territorial taxation No

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Residency by Employment (Work Permits)
Residency by Entrepreneurship (Starting or Relocating your Business)
Residency by Investment in Real Estate or Securities
Residency by having sufficient means (Passive Income)

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