Dateline: Budapest, Hungary
I fall in love every time I come to Budapest. The city has some of the most gorgeous architecture in Europe, even if its awe-striking landmark building (pictured above) is filled with one of the most radical parliaments in the entire world.
Tree-lined streets with quaint shops and all sorts of exciting restaurants are easy to find in the city center. I’ve been spending my days between meetings eating $5 goulashes, $10 fish dishes, and even $3 hot dogs topped to the nines. Local beer and wine run as low as $1-2 per glass.
At night, drinks are cheap and nightlife is happening. Even brunch at the Four Seasons, located in an old palace that the government let become a ruin before it was renovated as a hotel, is quite reasonably priced.
I would certainly recommend checking out Budapest as a great city to live in (rather affordably, I might add) as a perpetual traveler. However, Hungary also offers several paths to obtaining citizenship.
I’m currently finalizing details on the country’s entrepreneur visa program for an exhaustive guide we’ll be releasing later this summer. However, the two fastest options for obtaining a Hungarian passport are through descent or by making an investment.
Hungarian citizenship by investment
This is one of the cheapest ways to get quick permanent residency in the EU without starting a business. If you are a person of means and don’t want to deal with hiring anyone, filing company tax returns, or dealing with visa renewals, you can simply buy Hungarian government bonds.
Now, it should be noted that if there is any government in emerging Europe that is a total disaster, it’s Hungary. No other country was as aggressive in going after the banks than Hungary.
Even if you have a populist view against banks, the fact that the government attacked them for handing out mortgages denominated in foreign currencies should be a little concerning.
The government has done a poor job managing its currency, the forint, which one local told me has “only” depreciated about 15% against the dollar and Euro over the last few years. The big question here is whether Hungary will adopt the Euro and give up its ability to destroy a currency it controls.
Fortunately, the government bond investment is denominated in Euros. The required investment was raised to 300,000 euros (up from 250,000 euros last year) plus about 50-60,000 euros in fees.
Once you make the bond investment, you may apply for permanent residency within six months and citizenship within roughly five years (as opposed to 7-8 for entrepreneurs).
While bond investors are currently required to learn Hungarian in order to be naturalized, it is suggested that special interests are working to eliminate that provision as we speak.
If you have a larger amount to invest, you might be better served buying real estate in Portugal or even “purchasing” citizenship in Malta. I don’t entirely trust the Hungarian government, but I wouldn’t say they are so bold as to outright confiscate foreigners’ bond investments, which means your sunk cost in this program is just the legal and government fees.
Hungarian citizenship by descent
We have spoken before about the so-called “Lucky Sperm Club” of those whose family tree entitles them to a fast, cheap, and relatively easy citizenship by descent.
Numerous countries throughout Europe allow those with a bloodline tracing back to the continent to apply for a second citizenship just by filling out a little paperwork. Sometimes, this paperwork can be endless and the process bureaucratic. In the grand scheme of things, though, it’s often worth it.
These cases usually take six months to two years to process, depending on the country and your particular circumstances.
Considering that Hungarian residency — not citizenship — would cost 50-60,000 euros in unrecoverable fees, the idea of paying $2,500 to a lawyer to get instant citizenship is dirt cheap.
And one citizenship by descent that almost no one talks about is right here in Hungary.
I spent yesterday grilling an immigration attorney here about the citizenship program available to those of Hungarian descent, and while I am still following up on some of the details, the program is quite interesting.
Similar to Italy’s citizenship by descent program, there is technically no limit on how far back into your family tree you can go to find a Hungarian ancestor.
For example, I mentioned to my attorney here that I have a friend whose last name is Almassy, and my lawyer was quite sure he could obtain Hungarian citizenship for my friend merely based on him having a Hungarian last name.
The difference between Italy’s program and the citizenship program in Hungary is that Italian ancestry can only be claimed so far back as Italy existed in its current state. That means that any ancestors from Venice way back when don’t count.
While most of the few new Hungarians obtaining citizenship through ancestry do so going back three generations, you could go back even further if you could establish a paper trail that connected each generation to the next… and all the way to you.
This can be a great way to get a second citizenship, even if your ancestors have lived in your home country for the last few generations.
With situation-based exceptions in Lithuania and Latvia, it’s rare to see a citizenship by descent program be so generous in its timeline.
Total legal fees to manage the process will be similar to other programs, so if you want to get started, expect to spend about $2,500.
The cost of obtaining Hungarian citizenship this way — or any other European Union citizenship for that matter — is incredibly affordable when you consider the true value of an EU passport. I actually think the Hungarian investor residency program trades at a discount to its true value simply because the government is such a mess.
Having EU citizenship entitles you to travel virtually anywhere. In many cases, it is better than US citizenship, even before you consider the freedom of movement to live and work anywhere in the EU.
The one issue I see with Hungary is that they have imposed citizenship-based taxation in the past. Unlike the United States, however, the provision did not apply to dual national Hungarian citizens who lived outside of Hungary.
If you think you have Hungarian ancestry and are prepared to make a small investment to start the citizenship process, you can contact us and we’ll see how we can help.