9 benefits and disadvantages of a Hungary residence permit

9 pros of Hungarian residence permit

4. Access to high-quality European healthcare. Residents benefit from access to Hungary's healthcare system, which meets EU standards and costs less than in Western Europe or the US.

Residents of Hungary have access to both public and private clinics and are eligible for the European Health Insurance Card, which allows them to receive medical treatment in other EU countries, often free of charge or at a reduced cost.

Hungary is also a popular destination for medical tourism, particularly noted for its thermal springs and spa treatments.

5. Education opportunities. Hungary presents numerous education opportunities, including a variety of international schools and universities offering courses in English, German, and Hungarian. According to the QS World University Rankings 2024, five Hungarian universities rank among the top 1000 universities worldwide, including universities in Budapest, Szeged, and Debrecen.

6. Business opportunities. The Hungarian economy has shown resilience and growth, with a GDP growth rate of 4.6% in 2022.

Hungary is appealing for ventures in IT technology, manufacturing, and service industries. The ICT sector's gross value added (GVA) was estimated at about USD 20 billion in 2020, indicating that the digital economy accounted for at least 20% of Hungary's overall GVA, with an impact on at least 25% of the total GDP. 

The government supports startups, particularly in technology, biotechnology, and service industries. The government offers various incentives, including tax breaks and funding opportunities through programmes like the Hungarian Investment Promotion Agency.

7. Favourable tax regime. Hungary offers a competitive tax environment for both individuals and businesses. With a flat personal income tax rate of 15% and one of the lowest corporate tax rates in the EU, standing at 9%, the country is attractive for entrepreneurs and investors seeking tax efficiency.

8. Family reunification. The Hungarian residence permit supports family reunification, allowing permit holders to bring their family members to Hungary. This creates a supportive and inclusive environment for relocating families.

9. Pathway to permanent residency and citizenship. Holding a Hungarian residence permit opens the path to permanent residency after three years of living in Hungary, and after another eight years, one can apply for citizenship. This allows individuals to fully integrate into Hungarian society and enjoy the rights and privileges of EU citizenship.

Freedom of movement within Schengen area with Hungary residence permit

Holders of a Hungarian residence permit can travel to any Schengen country for up to 90 days within any 180-day period without the need for additional visas. They can also enjoy visa-free travel to several other countries in Europe, including Bulgaria, Serbia, and Romania.

For business professionals, this freedom means simplified international travel and the ability to attend meetings, seminars, and trade shows throughout the Schengen area with ease.

Visa-free countries with a Hungary residence permit

• Austria,
• Belgium,
• Croatia,
• Czech Republic,
• Denmark,
• Estonia,
• Finland,
• France,
• Germany,
• Greece,
• Iceland,
• Italy,
• Latvia,
• Liechtenstein,
• Lithuania,
• Luxembourg,
• Malta,
• Netherlands,
• Norway,
• Poland,
• Portugal,
• Slovakia,
• Slovenia,
• Spain,
• Sweden,
• Switzerland,
• Bulgaria,
• Cyprus,
• Romania,
• Montenegro,
• Serbia,
• Turkey (e-visa).

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Opportunity to obtain a Hungary Golden Visa 

Hungary offers various residency programs, including the Hungary Golden Visa, which provides a straightforward path to residency through investment.

The investment takes one of the following forms:

• buying local real estate units for €250,000+;
• residential property purchase for €500,000+;
• donation to a higher learning institution of €1,000,000+.

One of the attractive aspects of the Hungary Golden Visa is the opportunity to include family members in the application, specifically spouses, minor children, and dependent parents. 

The Hungary Golden Visa does not require investors to maintain a continuous physical presence in the country. The Golden Visa residence permit is granted for 10 years and can be extended once for the same period.

No physical residency requirement for Golden Visa holders

For most types of Hungarian residence permits, including those for employment, family reunification, and study, the holder must live in Hungary for over 183 days per year, if they want to extend their status after its expiration.

In contrast, the Hungary Golden Visa program does not impose a strict physical residency requirement on participants: investors are not required to physically reside in Hungary to maintain their residency status.

This flexibility is a great advantage for investors and entrepreneurs who need to travel frequently or maintain business in various countries. However, if they wish to obtain permanent residence or Hungarian citizenship later on, they will have to maintain a continuous physical presence in the country.

Hungary Golden Visa requirements

Requirements for investors and their family members. The main applicant must:

• be over 18;
• have a legal source of income;
• have health insurance;
• come from a non-EU or non-EEA country;
• have a clean criminal record;
• declare any illnesses or severe health conditions, if any.

The investor can add their spouse, minor children, and financially dependent parents to the application. 

Required documents. The following documents must be submitted by the applicant when applying for Hungary Golden Visa:

• copies of all applicants’ passports; the validity period must be at least 12 months;
• two passport photos for every applicant — not older than 1 month;
• health insurance for all family members;
• a written confirmation of intention to fulfil the investment condition;
• a copy of the marriage certificate, if applicable;
• copies of the birth certificates, if applicable;
• proof of the legitimacy of the income;
• CVs for each family member older than 18;
• detailed bank statements indicating a cash balance;
• a residence permit application form;
• a confirmation of investing.

Access to high-quality European healthcare 

Hungary's single-payer system was ranked 29th overall in the 2022 World Index of Healthcare Innovation. Hungary ranked 15th in Fiscal Sustainability, mostly due to its relatively low healthcare costs.

Universal healthcare. In Hungary, compulsory health insurance is funded through mandatory contributions. These contributions are automatically deducted from employees' salaries, and employers also make additional contributions on behalf of their employees.

The contributions cover a wide range of healthcare services under Hungary's National Health Insurance Fund (NEAK). While the insurance contributions fund the system, patients may still have to pay for some services or medications, but many basic services are free at the point of use.

Free healthcare in the EU. Hungarian residents can apply for the European Health Insurance Card (EHIC), which allows access to medically necessary, state-provided healthcare during a temporary stay in any of the 27 EU countries, Iceland, Liechtenstein, Norway, and Switzerland, under the same conditions and at the same cost as people insured in that country.

Private medicine is more affordable. Healthcare services in Hungary are much more affordable than in the US and Western Europe. With costs for dental treatments, elective surgeries, and other medical procedures often 40% to 70% lower than in Germany, France, or the UK, Hungary has become a popular destination for medical tourism.

Wellness industry. Medical tourism is quite developed in Hungary and has been growing in prominence over the years. Hungary is particularly popular for dental services, cosmetic surgery, and its medical spas and thermal baths. These spas are often located in scenic areas and utilise Hungary's thermal waters for health and relaxation purposes.

Education opportunities in Hungary and the EU

Higher education. Hungary has several universities and colleges ranked among the best in Europe, such as the University of Szeged, the University of Debrecen, Budapest University of Technology and Economics (BME), and Eötvös Loránd University. These institutions offer a variety of programs in English — for instance, the University of Szeged's bachelor's program in Computer Science.

Schools for children. For expatriate families, Hungary offers a number of international schools providing education in English and other major languages. These schools follow globally recognised curricula, such as the International Baccalaureate, ensuring students receive an education that allows them to transition easily to schools and universities in other countries if needed.

Education costs. The cost of attending international schools in Hungary can vary widely depending on the program. 

For younger children in international schools, tuition can range from about €6,000 to €10,000 per year. As children progress to elementary school, fees can range from approximately €9,000 to €15,000 per year. In secondary education, including middle school and high school, tuition fees generally range from about €10,000 to €20,000 per year.

Student mobility. Hungarian universities and colleges are part of the European Higher Education Area (EHEA), which ensures comparability in the standards and quality of higher education qualifications across Europe. This membership facilitates the mobility of students, allowing for exchange programs and opportunities to study in different EU countries under programs like Erasmus+.

Business opportunities with a Hungarian residence permit

Hungary serves as a gateway to the vast European market, offering businesses access to over 500 million consumers. This strategic position makes Hungary a great base for businesses looking to expand their operations into Western and Eastern Europe.

Attractive investment policies. The Hungarian government has implemented policies aimed at attracting foreign investment and promoting entrepreneurship. These include competitive corporate tax rates — among the lowest in the European Union — and various investment incentives.

Industry-specific incentives. Incentives are available for industries such as film production, environmental protection, and technology innovation. These include allowances for costs related to property renovation and improvements.

Direct subsidies and grants. The Hungarian government provides direct cash subsidies and grants for strategic investments, especially those that create jobs and promote technological advancement.

Support for startups and SMEs. Hungary offers various grants and financial support programmes for startups and small and medium-sized enterprises, creating a supportive environment for business growth and development.

Simplified business procedures. The country has simplified procedures for business registration, property registration, and tax filing, reducing the bureaucratic burden on entrepreneurs.

Additionally, Hungary's membership in the EU ensures regulatory compliance and access to various EU business support programs.

Favourable tax regime for Hungary residents

Personal income tax. Unlike the progressive tax systems in many other countries, where rates can escalate up to 45% or more based on income levels, Hungary applies a single flat rate of 15% to all personal income.

Corporate tax. Hungary has one of the lowest corporate tax rates in the EU at 9%. This low rate benefits startups and international companies looking to maximise profits while operating within the EU, where the average corporate tax rate is around 22%.

Value-added tax. Hungary's VAT rate is 27%, aligned with EU norms. However, the country offers various VAT exemptions and reductions to 0%, 5%, and 18% for specific goods and services, such as basic foodstuffs, books, and medicines.

Development tax incentives. Companies investing in significant development projects can claim tax incentives for up to 13 years. These incentives can cover up to 80% of the tax payable in a given year, subject to specific conditions such as the size and location of the investment.

Capital gains tax. In Hungary, property sellers pay a capital gains tax of 15% on the income received from the sale. The taxable amount is calculated by subtracting the property's cost, expenses that increased the property’s value, and costs related to the transfer of ownership from the sale price. 

The taxable income depends on how long the property was owned: 100% in the first year, 90% in the second, 60% in the third, 30% in the fourth, and 0% from the fifth year onwards.

The inheritance tax and gift tax. In Hungary, the general rate for inheritance and gift tax is 18%. However, a preferential rate of 9% applies to residential properties. Lineal relatives of the deceased, such as children, siblings, and spouses, are tax-exempt.

Hungary has signed double taxation agreements with over 80 countries, including EU members, the US, and Canada, to prevent double taxation of income earned in one country by a resident of another.

Family reunification opportunity in Hungary

The family reunification visa in Hungary allows immediate family members of residence permit holders to join them. 

Eligible family members typically include:

• spouses or registered partners;
• minor children, including adopted children;
• financially dependent parents.

Requirements. Applicants will need to provide evidence of their relationship to the primary residence permit holder, along with proof of the primary holder’s ability to support them financially and provide adequate housing in Hungary.

Once approved, family members receive a residence permit that allows them to live in Hungary. Hungary offers various integration and support services for families relocating to the country. This includes language courses, employment assistance, and cultural orientation programs designed to help new residents acclimate to their new environment. 

Pathway to permanent residency and citizenship in Hungary

Permanent residency is the next step after obtaining a residence permit. For most residence permit holders, eligibility for permanent residency requires a continuous physical presence in Hungary for three years. 

The applicant must reside in Hungary for most of the year, generally allowing for short absences such as vacations or business trips. However, any single absence should not exceed four months, and the total time spent outside Hungary should not surpass a cumulative nine months within the three-year period. 

Hungary permanent residence is issued for life, but ID cards must be renewed every five years.

Hungarian citizenship is usually obtained by foreigners through naturalisation after continuously living in the country with a permanent residence for eight years. Applicants can travel from Hungary but spend no more than 45 days a year outside of the country.

Citizenship by naturalisation requires proving a basic level of Hungarian language proficiency, a commitment to abide by the Hungarian constitution and laws, and a clear criminal record. 

Hungary allows dual citizenship, so foreigners don’t need to give up other passports unless their country of first citizenship requires it.

Hungarian citizenship grants the ability to work and reside anywhere within the European Union without restrictions. It also allows one to visit 171 countries visa-free, including the USA, the UK, Canada, Australia, Japan, and Singapore. Hungarian passport is ranked 33rd overall in the Immigrant Invest freedom of travel passport ranking.

Hungary for expats: why it is worth moving

Low cost of living. Compared to other European countries, Hungary offers a relatively low cost of living. Housing, food, and transportation are generally affordable, making it easier for expats to maintain a comfortable lifestyle. To be specific, the estimated monthly costs for a family of four are €2,220 without rent, and for a single person, they are €635 without rent.

Welcoming expat community. Hungary, particularly Budapest, has a thriving expat community, offering a supportive network for newcomers. There are numerous expat groups and activities that make integration smoother. In 2023, there were more than 400,000 foreign nationals living in the country.

Public transportation. Hungary has an efficient public transportation system, particularly in Budapest, which makes getting around the city and the country both convenient and affordable. A one-way ticket on local transport, such as a coach or a train, costs around €1, while the regular price for a monthly pass is €23. One litre of gasoline costs €1,6.

Safety. Hungary ranked 18th in the 2023 Global Peace Index. It is generally considered a safe country to live in, with low rates of violent crime, making it an appealing choice for families and individuals alike.

Rich cultural and historical heritage. Hungary has a vibrant culture with a rich historical background. Newcomers can immerse themselves in a unique cultural experience that includes music, festivals, architecture, and traditions.

Beautiful landscapes and nature. The country has a wide range of natural beauty, from the banks of the Danube River to the rolling hills of the countryside, the vast Great Plain, as well as numerous thermal spas and hot springs.

Food and cuisine. Hungarian cuisine, known for its flavours and spices, provides a delightful experience for food enthusiasts. Hungary is also famous for its wines, offering a unique gastronomic experience.

Cons of a Hungarian residence permit

1. Language barrier. Hungarian is known to be one of the most difficult languages to learn, posing a significant barrier for expatriates. While English is widely spoken in business and academic circles, navigating daily life and official procedures can be challenging without proficiency in Hungarian.

2. Bureaucracy and paperwork. The process of obtaining and renewing a residence permit can be complicated and bureaucratic. Applicants may face the need for extensive documentation, strict requirements, and slow response times from authorities, which can be frustrating and time-consuming.

3. Economic instability. While Hungary has a growing economy, it still faces challenges such as inflation and a changing job market. Economic fluctuations can affect job opportunities and living costs, which potential residents should consider.

4. Limited job opportunities for non-Hungarian speakers. The job market in Hungary can be competitive, especially for expatriates who do not speak Hungarian. While there are opportunities, particularly in international companies and specific sectors such as IT, engineering, and tourism, finding employment may be more challenging than in other European countries.

Key points about the Hungary residence permit advantages

1. Hungarian residence permit enables free movement within the Schengen area.
2. The Hungary Golden Visa program offers residency through investment. The Golden Visa program implies an investment of at least €250,000 and does not require continuous physical residence in Hungary. 
3. Hungary residence permit holders gain access to high-quality healthcare and education in the country.
4. A favourable tax regime for Hungary residents includes a flat personal income tax rate and one of the lowest corporate tax rates in the EU.
5. Hungary supports family reunification, allowing foreign residents to invite family members to the country.
6. Residence permit holders can eventually obtain permanent residency or citizenship in Hungary. For that, they need to live in the country on legal grounds for 3 and 11 years, respectively. 
7. Foreign residents in Hungary face certain challenges, including a language barrier, bureaucratic procedures for obtaining and renewing permits, economic instability, and limited job opportunities for non-Hungarian speakers.

Frequently Asked Questions