Hungarian investment funds
Featuring a 30-year history of investment funds, Hungary offers a wide range of fund types to choose from. Learn about available opportunities in detail and explore the benefits of investing in Hungarian funds as a foreigner.
Available investment funds
Aggregate assets of Hungarian funds
The total net asset value of investment funds
The minimum investment for obtaining residency
The economy of Hungary at a glance
Major economic indicators. According to the World Bank, Hungary is regarded as a high-income country. The country’s total Gross Domestic Product is $222 billion, and the GDP per capita is $23,000, ranking 47th worldwide. Both indicators are anticipated to grow in the next few years.
Before 2022, consumer price inflation in Hungary averaged 3.3% per year, which was about 2.3 times less than Eastern Europe’s average. Years 2022 and 2023 showed a surge of inflation in Hungary, with average rates of 14.6% and 17.1%, respectively.
International economic relations. The country is open to global markets. In 2021, its total exports reached $141 billion. The total import was $139 billion, resulting in a positive trade balance of $2 billion. Leading trading partners of Hungary are Germany, Italy, and Romania in the EU, as well as the United States outside the EU.
Hungary promotes foreign direct investments: In 2022, the amount of invested capital reached €6.5 billion, which doubled to €13 billion in 2023. At the end of 2023, the Hungarian Government announced a new program for individual foreign investors called the Hungary Golden Visa.
Dynamics of the Hungarian GDP per capita compared to the EU average
The growth rate of the GDP per capita of Hungary is comparable to the average rate in the European Union. Source: International Monetary Fund
3 reasons to purchase Hungarian investment fund units
1. Positive forecasts for the economy
In the recent five years, the economy of Hungary increased from 69% to 74.7% of the EU average. Despite a slowdown and a slight decrease in Q3 2023, it is expected to grow by 2.5—3.5% in 2024.
2. Stable income of funds
Except for interest income, all other types of Hungarian fund gains, including property income, income from rent, and dividend income, showed a significant increase in 2010—2021.
3. Opportunity to obtain a Golden Visa
From July 1st, 2024, investors in the Hungarian real estate fund units can become residents of the country. To qualify, they need to purchase a fund unit share for €250,000 or more.
1. Positive forecasts for the economy
In the recent five years, the economy of Hungary increased from 69% to 74.7% of the EU average. Despite a slowdown and a slight decrease in Q3 2023, it is expected to grow by 2.5—3.5% in 2024.
2. Stable income of funds
Except for interest income, all other types of Hungarian fund gains, including property income, income from rent, and dividend income, showed a significant increase in 2010—2021.
3. Opportunity to obtain a Golden Visa
From July 1st, 2024, investors in the Hungarian real estate fund units can become residents of the country. To qualify, they need to purchase a fund unit share for €250,000 or more.
In the recent five years, the economy of Hungary increased from 69% to 74.7% of the EU average. Despite a slowdown and a slight decrease in Q3 2023, it is expected to grow by 2.5—3.5% in 2024.
Except for interest income, all other types of Hungarian fund gains, including property income, income from rent, and dividend income, showed a significant increase in 2010—2021.
From July 1st, 2024, investors in the Hungarian real estate fund units can become residents of the country. To qualify, they need to purchase a fund unit share for €250,000 or more.
Overview of investment funds in Hungary
The first Hungarian investment funds appeared in 1992 and were represented by securities funds. By the end of the year, their assets were about 0.2% of the GDP. Funds’ total assets doubled annually and rose from 0.24% to 4.27% of the GDP between 1992 and 2001. In 2010, aggregate assets amounted to 14.4% of the country’s GDP, and by 2022, this value reached 20%.
The number of investment funds in Hungary increased modestly but steadily in the first 10 years. The 2000s and 2010s saw a significant increase in the number of operating investment funds. By the beginning of 2001, there were 94 funds, while in 2021, this figure increased to 820.
Hungarian legislation allows investment funds to hold all kinds of assets, including cash and deposits, debt securities, loans, shares and other equities, investment fund shares, financial derivatives, and non-financial assets such as real estate.
Comprehensive Guide on Hungary Golden Visa
- Benefits of Hungarian residency
- Available investment options
- Requirements to applicants
- Step-by-step process
The number of investment funds in Hungary in 2010—2021
At the end of 2021, a total of 820 investment funds operated in Hungary
9 categories of investment funds in Hungary
1. Money market funds
Funds offer high liquidity, diversification, and returns above bank deposit rates. The capital is invested in short-term bonds and bank deposits.
Shares can be redeemed at any time without losing income, so such funds can be an alternative to bank deposits.
2. Bond funds
The capital is invested in bonds with maturity periods ranging between 6 months and 3 years.
Shares can be sold at any time, but this type is used to commit funds over the course of a year. Investments involve higher risk than in money market funds.
3. Equity funds
This type is used for long-term investments. Up to 80% of the portfolio is typically composed of various companies’ shares.
Risks are high: returns can be both significant and negative, depending on the market situation. To reduce risks and increase return, investments should be held for 5 to 7 years.
4. Mixed funds
These are a mix of bond and equity funds and may include shares of other funds. The returns may exceed those of government securities.
There are three categories depending on the risk: conservative, balanced, and dynamic. The term of funds range from 1 to 7 years.
5. Guaranteed or protected funds
These funds guarantee that by a specific date all the shares will reach a specific value. Some funds may also promise guaranteed returns.
Capital is invested in equity, bond, and index funds. To claim the guarantee, one needs to hold shares until maturity. Otherwise, significant losses are possible.
6. Derivative investment funds
To achieve a higher level of return, such funds hold derivative products — market products whose value depends on the price of another one. Risks highly depend on the price of underlying products.
These funds feature active portfolio management that allows responding to any market event.
7. Real estate funds
Most of the capital of such funds is invested in non-financial assets, including office buildings, residential and commercial property, and industrial parks.
Up to 20% of the capital accounts for other funds investing in the real estate market or exclusively in liquid assets.
8. Venture capital funds
Funds of this type finance start-ups facing high growth at their early stage.
The key feature is a higher level of risk along with higher expected returns.
9. Private equity funds
Such funds finance the acquisition of companies whose shares are offered exclusively to professional investors.
Fund shares cannot be redeemed within five years of the initial investment date.
Getting a Hungary residency as an investor in real estate fund units
Real estate funds in Hungary experienced significant capital inflows in recent years. To further develop the sector and attract foreign direct investors, the Hungarian government announced a Guest Investor residence permit for purchasing real estate fund units.
Requirements
Participation in the program is possible for applicants who meet the following conditions:
- are over 18;
- are non-EU and non-EEA citizens;
- have a clean criminal record;
- purchase health insurance;
- possess a legal source of income.
To qualify for residency, investors in real estate fund units have to purchase a share of at least €250,000. The chosen fund should be registered with the Hungarian National Bank and have at least 40% of its assets invested in residential real estate in Hungary.
The investment is proved by a share certificate issued under the applicant’s name with a 5-year validity period.
Family inclusion
The investor’s family can obtain residency together with the main applicant. Residence permits are available to:
- a spouse;
- children under 18;
- parents.
Permit validity and extension
Hungary residence permits by investment in real estate fund units are granted for 10 years. Golden Visa holders are not required to move to Hungary to maintain residency.
Applicants need to hold fund units for a minimum of five years. After that, the share can be redeemed, and the investment is returned.
The permit can be extended once for an additional 10 years. To qualify for an extension, the applicant needs to make a new investment in real estate fund units for €250,000 and provide the corresponding certificate.
Other program options
Except for the purchase of real estate fund units, the legislation offers two alternative investment options:
- acquisition of residential property costing at least €500,000;
- making a charitable donation of €1,000,000+ to an institution of higher learning.
The property purchase option will be available from January 1st, 2025. To extend a permit obtained under this option, the acquired property must not be sold, and its value must not decrease below €500,000.
If the property is no longer in the investor’s possession or costs less than €500,000, a new one should be purchased.
Residence permits granted for a charitable donation are extended without additional conditions.
Over the years, I have diversified my investment portfolio across various sectors. Recently, I decided to explore international opportunities, and, among others, my investment consultant advised me to look at the Hungarian real estate market, which was on an upward trajectory.
As I didn’t plan to buy property abroad, my choice was to purchase a share in a real estate fund. The fund I selected had an impressive track record, strategic asset acquisitions, and the potential for high returns. Additionally, the fund management team promptly answered all my queries and provided quarterly reports detailing the performance of my investment.
The fund has consistently performed well, even surpassing my initial expectations. The diverse portfolio, including commercial and residential properties, ensured a balanced risk-return profile.
A businessman and investor from Egypt
How to get a Hungary Golden Visa step-by-step
The Hungary Golden Visa program is to be launched on July 1st, 2024. The process of obtaining a residence permit will presumably take about six months.
1. Find an agent
Seek assistance from a qualified professional who can guide you through the steps to obtaining residency by investment in Hungary.
2. Pass a preliminary Due Diligence check
Your agent will conduct a Due Diligence check to determine whether there are any obstacles to obtaining Hungarian residency.
3. Choose the investment option
The investor needs to select the most suitable option depending on their goals and situation.
The property purchase option is unavailable until January 1st, 2025.
4. Obtain a Guest Investor Visa
The Guest Investor Visa is required to enter Hungary to invest. The visa is granted for a period of up to 6 months and obtained via an Embassy or Consulate of Hungary in the applicant’s country of residency.
If the applicant comes from a country with a visa-free waiver with Hungary, this step is skipped.
5. Travel to Hungary and fulfil the investment condition
The applicant needs to enter Hungary within the validity period of the Guest Investor Visa. No later than 93 days after the first entry with the Visa, one needs to fulfil the investment condition and apply for residency.
6. Apply for a residence permit
An application for a residence permit can only be submitted in the territory of Hungary. This can be done either online via the Enter Hungary portal or in person at the regional migration office in the applicant’s place of living in Hungary.
7. Get a residence permit card
Permit applications are processed within several days. Residence permit cards are sent to the investor’s address in Hungary, as indicated in the application.
It is also possible to receive cards in person at the migration office, but the applicant needs to prove that they cannot receive the documents by post.
Benefits of the Hungary Golden Visa
Visa-free travel within the Schengen Area
A low cost of living
Opportunities for tax optimisation
Access to high-quality healthcare and education
The ability to open accounts in European banks
Frequently asked questions
What is the best investment in Hungary?
Hungary offers a range of investment opportunities. Foreign nationals can purchase real estate, establish a business, and invest in the Hungarian exchange market.
Purchasing a share in a Hungarian investment fund is an option for those who do not want to actively participate in the investment process and want to have a well-balanced portfolio.
Purchasing real estate fund units in Hungary allows investing in the Hungarian real estate market without purchasing property. Additionally, starting July 1st, 2024, investors in Hungarian real estate funds will be able to obtain 10-year residency in the country.
Why is Hungary attractive to foreign investors?
Hungary promotes foreign direct investments: In 2022, the amount of invested capital reached €6.5 billion, which doubled to €13 billion in 2023.
At the end of 2023, the Hungarian Government announced a new program for individual foreign investors called the Hungary Golden Visa.
To qualify for residency, third-country nationals must make an investment in the Hungarian economy under one of the available options:
- purchase real estate fund units for €250,000+;
- buy residential property for €500,000+;
- donate to an institution of higher learning at least €1,000,000.
Residency is granted for 10 years and can be extended once for the same period. The investor’s family, including a spouse, minor children, and parents, can get residency together with the main applicant.
Why is Hungary good for investment?
Hungary is regarded as a high-income country with a stable economy. The country’s GDP per capita ranks 47th worldwide and reached the value of $23,000 by the end of 2023.
Despite a slowdown and a slight decrease in Q3 2023, the Hungarian economy is expected to grow by 2.5—3.5% in 2024.
From July 1st, 2024, foreign investors in the Hungarian economy will be able to claim residency under the Golden Visa program. To qualify, they need to invest in real estate fund units, buy residential property, or make a donation. The Golden Visa will be granted for 10 years.
Where to invest money in Hungary?
One of the investment options available to foreigners in Hungary is purchasing a share in an investment fund.
The Hungarian fund market offers a wide range of fund categories, including money market funds, bond funds, equity funds, mixed funds, guaranteed or protected funds, derivative investment funds, real estate funds, venture capital and private equity funds, and other funds.
All the investment funds differ in terms of assets, return potential, and risk profile.
Starting July 1st, 2024, investors in Hungarian real estate funds registered with the Hungarian National Bank will get an opportunity to obtain a 10-year residency. To qualify, one needs to buy a share for at least €250,000+.
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Our team assists international clients in navigating the process, minimising risks, and safeguarding their finances. Submit an application to discover strategies to secure your Hungary Golden Visa.