Real estate, business or bonds: guide on the investment opportunities in Hungary

7 benefits of investing in Hungary

2. Access to the European market. As an EU member, Hungary provides investors with access to the single European market. The market operates with almost half a billion consumers and offers associated regulatory and business advantages, including trade without customs duties within the EU.

3. Support for business. The government of Hungary implemented various subsidies to boost the competitiveness of local businesses. For example, entrepreneurs can get regional aid from local funds and VIP subsidies for investments, training, and job creation.

Hungary’s corporate tax rate is the lowest in the EU at 9%, compared to Austria’s 23% and Germany’s 30%. Companies that invest in R&D, SME, and job creation can get incentives of up to 80% of the corporate tax.

4. Advanced economic conditions. The country boasts a highly educated and skilled workforce, particularly in the engineering, IT, and manufacturing sectors. At the same time, labour costs are generally lower compared to Western Europe.

Hungary also has a well-developed infrastructure, including modern highways, reliable energy supplies, and advanced telecommunications networks, which support efficient business operations.

5. Strategic location. Hungary's central location in Europe makes it a strategic gateway to other European markets, providing easy access to the rest of the continent. Moreover, the country is at the crossroads of three major European transport corridors. This is particularly beneficial for logistics and distribution businesses.

6. Investment-friendly legal framework. Hungary has been a member of the EU for 20 years, so its legislation is fully harmonised with EU law. Companies can be established within one or two days using a simplified procedure, and the cost of company registration is lower than in many other EU countries.

7. Strong banking system. Hungary's banking system is among the most robust in Central and Eastern Europe. Its banks maintain a healthy liquidity reserve and strong capital adequacy ratios, which position them well to handle potential financial shocks​.

The largest Hungarian bank, OTP Bank, is a significant player in the Central and Eastern European region.

Features of the Hungarian economy

The Hungarian economy is open and increasingly diversified, benefiting from robust engagement in international trade, particularly with EU countries.

GDP and inflation. According to the IMF, in 2024, Hungarian GDP per capita reached a threshold of $23,320, ranking the country 48th globally. Within the EU, this value is comparable to those of Portugal and Poland. Hungary is classified as a high-income economy as per the World Bank.

In recent years, global factors such as the COVID-19 pandemic and the war in Ukraine tested the resilience of the Hungarian economy. However, economists anticipate it to get back on track within the next two years. Specifically, the GDP is set to grow by 2.5% and 3.5% in 2024 and 2025, respectively.

Inflation spiked to 17% in 2023 compared to 5% in 2021 but is expected to decrease to 4.5% in 2024 and to 4% in 2025.

Economic structure. Around 65% of the Hungarian GDP is accounted for by the services sector, with significant contributions from trade, tourism, and finance.

The second largest sector of the Hungarian economy is the industrial sector representing approximately 25% of the Hungarian GDP. Manufacturing in Hungary includes automotive, electronics, computer technologies, and construction industries.

Agriculture is the third-largest sector of Hungary's economy. It makes up about 3% of the GDP and encompasses traditional farming, high-value organic and specialty food production, and food processing.

Foreign trade. Hungary plays a significant role in global trade, ranking 35th in imports and 38th in exports worldwide as of 2022. Trade volumes are extensive, with exports and imports each accounting for roughly 80% of GDP.

Hungary exports cars, vehicles and parts for them, electric batteries, medicaments, and computers. Primary imports are petroleum gas, electricity, cars, and broadcasting equipment. Key trade partners in the EU are Germany, Austria, and Slovakia. Outside the EU, it is China.

Labour market. There are about 5 million working individuals in Hungary. The unemployment rate in the country is 4.2%, which is below the EU average of 6%. Employment is projected to increase by 3.5% from 2021 to 2035, with high-skilled non-manual occupations taking 40% of all job openings within this time frame. The average monthly wage in Hungary is €1,600.

Hungarian securities market

Investing in Hungarian securities, including shares and government bonds, is a viable option. 

Stock market. The Budapest Stock Exchange allows trading in various securities. Notable listings include MOL Group in the oil and gas sector and OTP Bank, which are significant players listed in the Fortune 500 Europe.

State securities. The Hungarian government issues bonds that appeal to investors with conservative strategies seeking predictable returns. These bonds, accessible to non-residents, come with tenors of 3, 5, 7, 10, 15, and 20 years, catering to different investment horizons.

Investment funds. There are various types of investment funds in Hungary: money market, bond, venture capital and private equity, mixed, guaranteed, derivative, and real estate funds. The total number of funds on the market is over 800, with assets above €260 million.

The Hungarian National Bank, MNB, is a regulator of the investment fund market. Most funds are registered at the MNB to ensure transparency and compliance with the law.

The most popular type is real estate funds, comprising more than 20% of the market. These funds invest in income-generating properties, such as commercial buildings, residential properties, and industrial facilities. They provide exposure to the real estate market without the need for direct property ownership.

Prominent real estate investment funds in Hungary include:

• OTP real estate fund;
• MKB real estate investment fund;
• Erste real estate fund;
• Raiffeisen real estate fund.

An investor can get a residence permit in Hungary after purchasing units of real estate funds. The minimum investment requirement is €250,000.

Investment in Hungarian real estate

Foreigners can buy real estate in Hungary without needing local citizenship or residency. To proceed, they must obtain permission from the authorities. Hungary offers a Guest Investor Visa, making it easier for investors to reside and manage their investments.

A lawyer typically assists in the purchasing process, handling the necessary permissions and communicating with the authorities on behalf of the investor.

Property price. The real estate market in Hungary has shown significant growth, increasing by around 20% every year since 2015, far outpacing the EU's average growth of 5%. 

In 2024, the average apartment price in Hungary ranges from €2,040 to €2,690 per square metre, depending on the location. Prices in Budapest are about a quarter higher than nationwide, ranging from €2,430 to €3,560 per square metre.

Associated costs. Investors pay associated fees when buying a property. For new properties, they pay VAT at a reduced rate of 5%, which is normally included in the property price.

Buyers also incur expenses such as stamp duty, which is 4% for the price portion of up to 1 billion forints, or €2.6 million, and 2% for the exceeding amount.

Service fees for lawyers, realtors, and notaries can total up to 5% of the property price, with administrative fees generally not exceeding €320. Overall, associated purchasing costs can amount to up to 10% of the property price.

Taxes. Property taxes in Hungary are levied annually and can vary by region, often calculated either as a flat rate per square metre or as a percentage of the property's market value. Rental income and capital gains from property sales are both taxed at 15%.

Investors purchasing residential properties in Hungary worth at least €500,000 are eligible to obtain a 10-year residence permit under the Hungary Golden Visa program.

Examples of investment real estate in Hungary

Business investment in Hungary

In 2022, the total value of inward foreign direct investment in Hungary was approximately €98 billion, marking an increase from previous years.

The Hungarian Investment Promotion Agency, HIPA, was established to attract foreign investment. In 2023, the agency managed to secure investments worth €13 billion for 209 projects, effectively doubling the investment volume of the previous year.

According to the HIPA, the key business sectors in Hungary include:

• automotive;
• electronics;
• IT;
• business service centres;
• battery production;
• medical and biotechnology;
• food industry;
• chemical and packaging industries;
• logistics.

Hungary also has a growing startup scene, hosting around 2,900 startups. The startup environment is vibrant, with an emphasis on tech sectors such as AI, data analytics, cybersecurity, and fintech. The government supports this sector through business incubators and education programs aimed at nurturing innovation​​.

The Hungary Golden Visa — a program tailored for investors

The Hungary Golden Visa program offers non-EU nationals the opportunity to obtain a Hungary residence permit by investment in the country’s economy. Residency is granted to both investors and their families. The permit is issued for 10 years with the possibility to extend it once for an additional 10 years.

Investment options. The minimum investment amount is €250,000. Investors can choose one of the three options:

1. Buying units of a real estate fund. Investors can buy units issued by a real estate fund registered with the Hungarian National Bank. The minimum investment is €250,000+.
2. Residential property purchase. The minimum investment is €500,000, fees and taxes excluded. This option becomes available starting January 1st, 2025. Properties purchased before this date will not qualify.
3. Charitable donation. A minimum donation of €1 million is required. This non-refundable contribution goes to an institution of higher learning to support education, scientific research, and artistic or creative activities in Hungary.

To maintain residency, an investor must retain fund certificates or real estate for 5 years. After this period, they are allowed to sell the asset and recover their investment. The donation to an educational institution is non-refundable.

Requirements for applicants. To be eligible to participate, an investor must:

• be over 18;
• be a non-EU or a non-EEA citizen;
• have a legitimate source of income;
• have medical insurance.

Family members, including a spouse, children under 18, and dependent parents, can be added to the application. 

There is no residency requirement. The investor and their family may move to Hungary or choose to stay in the country of their residence and enjoy the benefits of the EU residency remotely.

Documents. The list of required documents includes:

1. Passport with at least 12 months of validity remaining.
2. Two recent 3×4 cm photos.
3. Health insurance.
4. Proof of the legitimacy of the income.
5. Bank statement showing a cash balance.
6. CV for each family member over 18.
7. Marriage certificate, if applicable
8. Birth certificates for children.
9. Residency application form.
10. Written confirmation of the intention to fulfil the investment condition — for the Guest Investor Visa application.
11. Confirmation of investment — for the Hungary Golden Visa application.

Residence permit extension. To qualify for an extension, the applicant has to meet one of the following conditions corresponding to the initial investment option:

• hold a fund share worth at least €250,000 at the time of claiming the extension;
• own the purchased property, ensuring it is valued at no less than €500,000; if the property was sold or its value decreased below €500,000, a new property should be purchased;
• if the initial permit was granted for a non-refundable donation, it is extended automatically upon request.

Getting a Hungarian passport with a Hungary Golden Visa

Individuals with Hungarian residency can apply for permanent residency after three years, provided they do not leave Hungary for more than 4 months in a row or more than 270 days in total. Permanent residency is granted for life, although the associated ID card must be renewed every 5 years.

After an additional eight years of residency, a foreigner may apply for Hungarian citizenship by naturalisation. During this period, it is crucial that they do not spend more than 45 days outside the country. The applicant must successfully pass an exam on basic proficiency in the Hungarian language and knowledge of the country's history.

Hungarian law allows dual citizenship, meaning an investor can obtain a Hungarian passport without renouncing their first citizenship.

Key points about Hungarian investment opportunities

1. Investing in Hungary provides significant benefits, including access to the vast European market, substantial business and tax incentives, and the opportunity for residency by investment in fund units and real estate.
2. There are various investment paths in Hungary, such as securities, business, and real estate investments.
3. The Hungary Golden Visa program offers non-EU nationals a pathway to residency by investment. This residency is valid for up to 10 years and covers investors and their families. The minimum investment is €250,000.
4. Applicants for a Golden Visa can choose from three investment options: acquiring property worth €500,000+, purchasing real estate fund units for at least €250,000, or making a charitable donation of €1+ million. 
5. Investors can obtain permanent residency after 3 years of living in the country under a qualifying permit. They become eligible to apply for Hungary citizenship by naturalisation after 8 years of living in the country with permanent residency. 

Frequently Asked Questions