Hungary offers a Guest Investor Program, allowing third-country citizens to obtain residence permits if they invest in real estate funds. These funds must be registered with the Central Bank of Hungary and offer various benefits and protections for investors.
Characteristics of Hungarian Real Estate Funds
Real estate funds in Hungary must be registered with the Central Bank and operate under the supervision of licensed fund managers. These funds can be open or closed-end and invest in assets such as real estate, shares in real estate companies, and securities.
Real Estate Fund Manager
The fund manager plays a crucial role in investment decisions and fund operations. They must obtain a license from the Central Bank and are responsible for managing the fund's assets, making investment decisions, and ensuring compliance with regulations.
Investment Certificate
Investors in real estate funds receive investment certificates, representing their share of the fund's assets. These certificates are issued by the fund and provide investors with rights to the fund's profits and assets.
Advantages of Real Estate Funds
Investing in real estate funds offers several advantages, including professional management of assets, diversification, and reduced administrative burden for investors. Fund managers handle investment decisions and property management, allowing investors to benefit from expertise and passive income.
Risk and Investor Protection
Real estate funds face liquidity risks, but regulations require them to hold a portion of assets in liquid form to ensure investor protection. Additionally, Hungarian law provides compensation mechanisms and investor protection funds to safeguard investors' interests.
Taxation
Real estate funds are not subject to corporate tax, but investors may be liable for tax on profits received from investment certificates. Dividends and capital gains are subject to withholding tax, which can be mitigated through double taxation treaties.
Conclusion
Investing in Hungarian real estate funds offers a pathway to residency through the Guest Investor Program. These funds provide a regulated and transparent investment vehicle for third-country citizens seeking to obtain residence permits in Hungary.
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